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Force Magazine

On a Positive Note

Indo-US defence trade is likely to get a bigger boost against a growing strategic relationship between the two nations

By Dilip Kumar Mekala

Puneet Talwar IDSA The United States (US) has emerged as the largest military equipment supplier to India in the last three years, leaving Russia behind. No surprises there, considering the long list of military aircraft like C-130J super Hercules, C-17 globemaster III, P-8I long range maritime reconnaissance aircraft joining the Indian forces during this time. However, all these above acquisitions followed the government to government agreements, a part of US Foreign Military Sales (FMS). Incidentally, the future of FMS in India seems to be not so vibrant, especially in these times of ‘Make in India’.

During a recent conversation off the record, a high placed official in the government, who is involved with defence acquisitions, told this FORCE correspondent that the option of FMS will be exercised only if there are no other worthy alternatives. The chances are even more bleak if there is an Indian company that can manufacture the product with a foreign partner indigenously. Speaking on the Ultra-Light Howitzer (ULH) programme specifically, the officer wondered, “Why should we choose an American product when there are two Indian companies that could give us the ULH?” That, too, for a much cheaper price!

Last year, BAE systems’ shut down the production line for its M777 howitzers, apparently resulted by the delays from the Indian government in placing the order. If the Indian government opts for this product now, it will have to pay an additional USD 240 million over the previously agreed amount. The government seems to be least interested in taking discussions forward presently. The former defence minister Arun Jaitley told in a written statement to the Parliament, “The case for procurement of Ultra-Light Howitzer (ULH) guns through US government has not progressed due to cost issues and because the vendor has not been able to come up with a proposal fully compliant to the offset requirement”.

Despite huge spending in FMS deals, and even with the offsets involved, the Indian defence manufacturing sector gained very little so far. There is hardly any significant technology that gets transferred in this arrangement. Furthermore, the export control system that is currently in place with the US puts “unreasonable restrictions on the use of the equipment”, according to the defence ministry source.

“The US has an export control system that ensures its technology doesn’t fall into the wrong hands. When President Barak Obama came to office, he realised that the system wasn’t updated since the Cold War and it is hampering us in a number of areas including defence exports,” said Puneet Talwar, assistant secretary, bureau of political-military affairs, United States, during a talk at Institute of Defence Studies and Analysis (IDSA) on December 3. He was heading a delegation to India to strengthen strategic cooperation between the two countries. Talwar has broad responsibility for the US’ international security relationship, provision for international security assistance, negotiation of international security agreements, and implementation of export control regime.

Indian Navy recently received sixth P-8I from Boeing
Indian Navy recently received sixth P-8I from Boeing

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