The Challenge of India for Western Defense Firms
2013-10-07 By Robbin Laird
India is a key country in shaping 21st century strategy for the U.S. and Europe.
India is important in and of itself, but also as a counterpart to the rise of China as an authoritarian global power.
As the world’s largest democracy, India is in many ways a natural ally of the West.
But Indian traditions also provide limits to such a natural alliance.
The close relationship between the Soviet Union and India continues into the 21st century with Russia playing a key role in the aerospace business, and the keen hope by the Russians of taping Indian intellectual capital and investments to shape 21st century weapons systems. These systems range from aircraft to missiles to a range of dual-use capabilities.
The problem for the West is that Russia remains more of a rival than a natural ally in shaping stability for the next decades, and Arctic opening could accentuate the rivalry.
But there are a number of aspects of the Indian system, which create challenges as well.
First, there is the well-known problem of HOW long it takes to make defense procurement decisions and then to implement them. The example of the Hawk trainer aircraft is instructive.
It took a very long time from selection to delivery of BAE Systems Hawk trainers to India.
Second, there is the key problem of the nature of the defense manufacturing system in Indian aerospace, which has been largely divided between their Soviet-Russian generated infrastructure and their Western generated infrastructure.
The challenge is to build an aggregated infrastructure with a modern skill set to build 21st century systems. This is very difficult to do if one remains facing in two directions with regard to aerospace and its commitments.
And in a report from McKinsey, they had their own take on the infrastructure challenge by highlighting that there the Indian government needed to put in place some needed support efforts:
(There is a need) especially (for) talent availability, infrastructure and sound regulation (for the growth of the defense industry). India will have to build its stocks of aerospace and defense expertise: although India is one of the world’s largest producers of engineers (about 350,00 per year), only 4,000 or so are aeronautical experts.
Third, associated with the desire to hedge one’s bets is the security of the supply chain. Western 21st century defense systems are quite different from 20th century systems. They no longer are an aggregation of parts but a melding of subsystems.
To build subsystems within an integrated 21st century aerospace final product requires not only security of supply but protection of intellectual property.
This is why China is certainly not a preferred partner by the West (even leaving aside political considerations) but India will find it difficult to be building “fifth generation” Russian systems and participating with the West in terms of modernization aerospace platforms and strike systems.
The reason is simple: security of supply and protection of the information operating within the Western production system.
Nonetheless, the major challenge is the strategic environment and threat itself.
Building new systems is not enough; building the right systems, training with them and ensuring mission success if the only outcome worthy of a defense sector.
Spreading production capabilities around among global partners is not going to gain a strategic advantage.
Secretary Wynne brought this George Kenney quote to my attention which captures the unique dynamic of buying the right defense systems:
“Airpower is like poker. A second best hand is like none at all. It will cost you dough and win you nothing.”
And the key rival to India clearly is rebuilding its military capability to enhance its ability to project regional power and to engage globally where possible.
And the PRC certainly is shaping its ability to export systems to draw partners into its global production network.
Dealing with missiles as key threats means as well the ability to bring offensive and defensive weapons together into as integrated a whole as possible is a key challenge for dealing with the Second Nuclear Age as well. For the United States and its Pacific partners, the F-35 and Aegis are key elements of the synthesis under way to deal with these challenges.
The PRC will be faced with dealing with this.
The Pacific powers plus the United States is the reactive enemy against which the PRC will deal? This means that for India, this interaction will create a shaping function as well for the strategic environment within which India will operate.
(We are publishing our look at this dynamic next month with Praeger Publishers entitled Rebuilding American Military Power in the Pacific
It will be crucial for India to develop the strategic thinking to deal with this interactive environment to build the systems able to deal with the 21st century and its dynamics.
Looking at defense production simply from a 20th century workshare perspective will leave India in the wake of 21st century developments.
The West certainly could do more to shape a breakthrough environment with India.
The challenge for the United States is an export control regime, which has not caught up to the 21st century.
As I wrote earlier:
As the U.S. draws down its defense investments and sequestration makes it difficult to prioritize investments, the major US companies are looking to global exports as a key source of revenue and profits. One can not go to a major air show without senior company executives claiming significant growth in the international market as one way for them to deal with the uncertainties of DOD investments and the absence of strategy.
Sadly, foreign customers are just not that interested U.S. equipment as end items, especially when faced with the necessity to deal with ITAR and other regulations breaking down every component inside those end items. The kinds of allies working with the United States, whether in Europe, Asia, the Middle East or Latin America, expect to participate in the production process and to part of the overall evolution of the product. They expect to be part of the production cycle and to benefit industrially from buying any U.S. products.
Arms sales are no longer about things as end products. They are about participation in processes to build 21st century systems.
Additionally, there could be breakthrough approaches which would show the commitment of Western states to getting it right in India.
For example, the French government could go to the Indian government and Air Force and commit to buy a number of Rafales off of the Indian final assembly line.
Currently, the French government is reducing its own buy precisely at a time when they seek to gain the final approval of the Indian government to the sale. This is an odd approach.
A better one would be to commit French Air Force personal to the new line in India and guarantee the quality of the plane coming out of the factory and put that commitment in blood: we will fly this aircraft as part of the French Air Force (FAF).
The Indian planes will be cheaper than those produced in France and certainly the FAF is desperate for more aircraft.
In other words, the Indian challenge is fundamental and certainly not simply a case of the West not giving India what it wants. There is significant change required on the Indian side as well.
But the West needs to do a better job of shaping an understanding of what such change would achieve both for India and the West.
For a look at the problem as seen from the Indian perspective see the following: