Indian jet purchase hangs on nuclear deal

Posted in India | 12-Apr-06 | Author: Siddharth Srivastava| Source: Asia Times

Siddharth Srivastava is WSN Editor India.
NEW DELHI - India's announcement that it plans to make one of the world's largest military aircraft purchases, one that could exceed US$10 billion, could be linked to the fragile Indo-US nuclear technology and supplies deal.

The Indian Air Force (IAF) announced last week that tender bids will be invited for 126 fighter jets this month. If the purchase goes ahead it will be the biggest weapons purchase India has made. Bids will be sought from the makers of six jets - the F-16 and F-18 of the United States, France's Rafale, Sweden's Gripen, the Eurofighter Typhoon, and Russia's MiG-35.

At the very least, the timing of the announcement is curious, coming when the Indo-US nuclear deal, which was signed last month and which New Delhi has pushed despite considerable domestic opposition, is being vehemently opposed in the US Congress. Reports suggest the Indian government might drop the US fighters from the list if the nuclear deal fails to make it.

The influential Russian daily Nezavisimaya Gazeta reported that the nuclear deal is linked to purchase of the US F-16 and F-18 fighters. The newspaper suggests the jet deal revolves around US attempts to push Moscow out of the Indian arms market.

While US Secretary of State Condoleezza Rice has been personally arguing the nuclear case on Capitol Hill, the ranking Democrat on the House International Relations Committee, Tom Lantos, as well as senior Democrats on the Senate Foreign Relations Committee, Joseph Biden and John Kerry, have said they were strongly inclined to support the agreement. But overall, the situation seems grim for the proponents of the deal.

The US Congress must pass special legislation allowing waivers to India for US non-proliferation laws, but key lawmakers have indicated opposition to the deal.

It remains to be seen how India will react if the nuclear pact fails to pass or is delayed at the US Congress. Indications are that New Delhi will not be happy.

Prime Minister Manmohan Singh has a political stake in the deal. He had to take on the leftist parties, crucial coalition partners, as well as the opposition, and risk hurting the sentiments of Indian Muslims who tend to loathe the US because of its stand on Iran's nuclear program and its policies in Afghanistan. In this context, New Delhi will expect Washington to give the deal the full push. Recently, on a visit to Haryana, the prime minister promised the state a new nuclear power plant.

Sounding a tough note, Foreign Secretary Shyam Saran, back in India after canvassing for the Indo-US deal in Washington, said the pact was "delicately balanced" and any "substantial changes" or "revisions" to it were unacceptable to India. New Delhi hopes the US Congress will implement the pact as agreed, he said.

On a more strident and somewhat undiplomatic note, Saran said: "We have preserved all our basic positions. We have preserved our basic interests. Why are we always so worried about screws being tightened on us, as if someone can come and turn the screws on us and we just lie back and be screwed?"

While the US had pressured India to take a strong stand against Iran on its independent nuclear program, as a condition for the nuclear pact, there are indications New Delhi may peg big-ticket business decisions and purchases on the nuclear pact. To complicate the issue further, the announcement on the jets was made as the government grapples with allegations that commissions were paid to middlemen in a recently concluded deal for submarines, which was supposedly passed on to some close to the establishment.

Meanwhile, the US is trying to impress India with its military wares. The Pentagon expects India to start purchasing as much as $5 billion worth of conventional military equipment.

Indeed, relations between India and the US recently have gone beyond the nuclear deal, and New Delhi has been trying to keep Washington in good humor. US-based Boeing a year ago won a $6.9 billion order for 50 aircraft from Air India, the country's public airline. Boeing faced stiff competition from France's Airbus, but a personal intervention by US President George W Bush and Manmohan sealed the deal.

With the Indian government showing commitment to its reform process as evidenced by the recent handing over of the management of the Mumbai and Delhi airports to private firms, the opening of retail to foreign direct investment is also a matter of time. It is again US firms, notably Wal-Mart, that are eyeing and pushing for the opening of India's huge retail market valued at more than $250 billion.

Washington has been emphasizing the business aspects of the relationship between the two countries, one being the $100 billion nuclear-supplies market that opens up if the nuclear pact goes ahead. And there is a bid to double trade to $40 billion in three years.

Defense is a crucial aspect. India's defense relations with the US have remained hobbled by the sanctions-ridden foreign policy followed by the superpower toward India until recently. A recent US Congress study says Asia accounted for the bulk of Russia's arms-sale agreements in 2001-04, rising to nearly 82% of its total deals worldwide. By contrast, only 26% of US arms deals were in Asia during the same period. The bulk of US deals, 66%, were in the Near East, including sales to Saudi Arabia, Egypt, Oman, Israel and the United Arab Emirates. Washington has been looking to even the imbalance.

India and the US inked a 10-year defense agreement in June, titled the "New Framework for the US-India Defense Relationship". It is vast in scope and envisages a broad range of joint activities, including holding multinational operations, strengthening the two militaries to promote security and defeat terrorism, and improving capacity to take on the proliferation of weapons of mass destruction.

The announcement about the fighter jets comes in wake of the massive modernization and acquisition exercise of the Indian armed forces, which has seen India overtake China as the largest defense purchaser among developing nations. The US Congress study said that over the past four years, China has purchased more weapons than any other nation in the developing world, but India surpassed China in total purchases in 2004, agreeing to buy $5.7 billion in arms. India's immediate requirement is estimated to be more than $15 billion.

In October, India signed one of its largest defense deals to acquire technology from France to build six sophisticated Scorpene submarines. The contract is estimated to be worth $3.5 billion. This month, New Delhi cleared military procurements worth an estimated $1.5 billion from its public defense enterprises.

Nearly $1 billion of that is for 20 Jaguar ground-attack jets and an equal number of Tejas light combat aircraft for the IAF from state-run Hindustan Aeronautics Ltd (HAL). The IAF inducted 40 Jaguars from Britain in the early 1980s, which was followed by the indigenous manufacture under license of another 108 such fighters by HAL. In a bid to hasten decision-making, the cabinet has also doubled the financial powers of the defense minister in clearing purchases up to $40 million.

Other nations continue to be aggressive in chasing arms deals with India. In the past few years, Israel has overtaken France, the United Kingdom and other countries to become the second-largest defense supplier to India, with the value working out to be close to $1 billion for each of the past three years. As part of a $1.1 billion deal signed with Israel, the IAF will get the first of three Phalcon airborne early-warning systems by the end of next year.

Russia has managed to retain the position as India's biggest defense partner, notching more than $1.5 billion in each of the past three years because of the deeply entrenched relations between the two countries that go back to the 1960s. But its position is under severe threat.

Regardless of other implications, the IAF wants more firepower. Its fighter-aircraft fleet consists mostly of vintage Russian MiGs. The IAF has said it also plans to buy 80 attack helicopters for counter-insurgency operations.

While there is a risk the US may lose out because of difficulties over the nuclear pact, India is mounting the pressure, although subtly for now.

Siddharth Srivastava is a New Delhi-based journalist.