Why
India chose to disappoint the
US By Trefor Moss
India's procurement of 126 multi-role
combat aircraft has been one of the most eagerly
anticipated defense deals in years, and not just
because of its US$11 billion value.
The
selection was always going to be interpreted as an
expression of New Delhi's evolving strategic
outlook, and to some in Washington, which has
built an increasingly close alliance with India
driven by a mutual wariness of China, a win for
either Boeing or Lockheed Martin, the two US
contractors competing for the contract, seemed
assured.
But the Americans were wrong to
think that friendship alone would unlock the door
to India's defense dollars. At the end of April,
the Indian government announced that neither US
firm had even made
it onto the final short list,
with Dassault of France and the European EADS
consortium winning through at their expense.
Having made plain that the US was "deeply
disappointed" by the outcome, the US ambassador to
India promptly resigned, citing personal reasons
that seemed barely to mask his frustration that
American lobbying had failed in spite of President
Barack Obama's personal appearance in New Delhi
last November.
Lockheed Martin's F-16 was
perhaps always an outsider to fulfill India's
requirement: Pakistan already operates the
aircraft, and this counted against it right from
the start. But the Americans thought, not
unreasonably, that Boeing's versatile F/A-18 Super
Hornet, backed up by industrial offsets from
General Electric as well as Boeing itself, was a
strong claimant.
Unfortunately, the Indian
Air Force's technical evaluators didn't see it
that way. They felt that the newer French and
European fighters performed better in India's
often challenging operating environments. The
Europeans also went further on technology
transfer, while the US's end user agreements
struck India as needlessly prohibitive.
"The Air Force was focusing on getting an
aircraft that would be superior, and the American
aircraft on offer just didn't cut it," says Rahul
Roy-Chaudhury, the senior fellow for South Asia at
the International Institute of Strategic Studies.
"There was surprise in India at the extent of the
US disappointment ... The Indian mindset was that
this deal wasn't about cementing relationships, it
was about getting the best deal. The Indian view
is that the Americans should have offered better
aircraft."
Both sides are left with the
sense that the other might have attached more
value to their alliance in order to make the
fighter deal happen. For the US, that the Indians
were unduly blase in ejecting both US aircraft
from the competition; from the Indian perspective,
the Americans should have dug deeper and
demonstrated their commitment to the Indian
relationship by putting together a much stronger
package.
"I hope [the Americans] learn
from this," says aviation analyst Richard
Aboulafia, vice president at the Teal Group. While
maintaining that the Super Hornet was as strong
technically as the other competitors, Aboulafia
suggests that the Americans' complacency lost them
the deal. "If the US had really reformed its
processes and said to the Indians, 'You're our
partners, you're our equals,' then the F-18 would
have had a very strong chance. That's the approach
the Europeans took - they came and said, 'We need
you'. I hope this is a rude awakening for them."
Aboulafia points out that the US also
failed to overcome the "unfortunate legacy" of its
refusal to export critical aircraft components to
India during the 1999 Kargil conflict with
Pakistan. India needed cast-iron guarantees that
nothing like this would ever happen again, and
these were not forthcoming.
Much has been
read into India's refusal to do the US any special
favors in this case, with some commentators
applauding what they see as a return to India's
traditional non-aligned roots and a rejection of a
US-India strategic bloc. But by opting for a
European aircraft, India is not seeking to avoid
aligning itself with the US. India clearly is
aligning itself with the US, but as a partner
rather than a client; it also sees the US as one
of several key strategic partners, rather than the
only ally that counts.
India's strategy,
above all, is to spread the risk. It has already
signed significant contracts with the US for
military surveillance and transport aircraft, as
well as civil nuclear development. Russia, once
India's principal arms supplier, also missed out
of the multi-role fighter deal, but is jointly
developing a fifth-generation fighter with India.
France recently secured a $20 billion
contract to build civil nuclear reactors in India
- an agreement which may count against Dassault in
the final round of the fighter contest if New
Delhi truly is determined to spread its largesse.
Partnership with France is already secured,
whereas the selection of EADS' Eurofighter would
give four more countries - Germany, Italy, Spain
and the United Kingdom - a vested interest in the
modernization of India's military-industrial base.
Political considerations will now dictate
which of the two finalists secures the contract,
and also when a deal is announced. The
government's corruption woes are such that it
would be far too sensitive to announce a major
contact award in the next few months, perhaps
pushing back a final decision until 2012.
The stakes for EADS and Dassault could
hardly be greater. A Eurofighter win could
potentially propel the aircraft to further success
in other Asian markets which have shown an
interest in acquiring it - such as Japan,
Indonesia and Malaysia - while the fortunes of
Dassault's Rafale, which has only Brazil as a
significant export customer so far, would be
similarly transformed. For the US, there is
everything reason to be optimistic about the
defense relationship with India, despite this
setback. The Indian Air Force has already ordered
six C-130J transport aircraft from Lockheed
Martin, and eight P-8 multi-mission aircraft and
10 C-17 transport planes from Boeing; it will
probably come back for more of all three types
within the next few years.
But the biggest
opportunity could be in encouraging India to buy
Lockheed Martin's F-35 Lightning II, a
fifth-generation fighter that would be a
capability leap beyond any of the aircraft under
consideration this time around. Such a deal would
be fraught with difficulties - not least how to
involve Indian industry (as offset rules demand)
in the construction of an aircraft that is far
beyond its current technical capability - but the
US has perhaps a decade to figure out how to get
around them. India will certainly require a
fifth-generation fighter as China makes progress
towards acquiring one, and its prospects of
successfully developing a fifth-generation fighter
with Russia are mixed at best. The US certainly
has a big incentive to learn the lessons of its
recent setback.
After absorbing the
initial disappointment, the US will put India's
rebuff behind it and refocus on making the
strategic relationship with India a cornerstone of
its foreign policy in the Asian region. In this,
it will find a willing partner, though India's
assertiveness in rejecting the US aircraft will do
it no harm as it strives to make that partnership
an equal one.
Trefor Moss is a
freelance journalist who covers Asian politics, in
particular defense, security and economic issues.
He is a former Asia-Pacific editor for Jane's
Defense Weekly.
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