Clear-cut Signal to Defence Vendors in India and Overseas

The Indian Minister of Defence, A.K. Antony, today reiterated that by banning few foreign original equipment manufacturers (OEMs), the Indian Government had sent a ‘clear-cut signal’ to the vendors in India and overseas that all acquisitions will be above board. The Indian law and also the Defence Procurement Procedure are very clear that any company found indulging in ‘malpractices’ would be banned/blacklisted.

Addressing a press conference after the inauguration of the Eigth Defexpo 2014, the Defence Minister said that such actions may have created ‘some delay’ in the defence acquisition process, but mentioned that it was helping ‘streamline’ the system itself. “Anybody found guilty, we will be very strict”. Unlike in the US and the UK where a company found committing malpractices had to pay huge financial penalities, in India, it was blacklisting and banning them. “We are in the process of cleaning up the system. We may not have succeeded 100 per cent, but we are in the process. There is no political decision in the acquisition process, but all done on merit. If there is any prima facie evidence against any company, it would be referred to the Central Bureau of Investigation (CBI) or other agencies. We are acting on complaints.”

As regards cancellation of the AgustaWestland helicopter deal, he assured “we will find alternatives for the helicopter programme.” Assuring that while the government would speed up not only the process of defence procurement, but also indigenisation, he said that there would be no compromise on transparency.

ALL MAJOR ACQUISITIONS IN 2014-15

On the delay in acquiring the Dassault’s Rafale combat jet under the medium multi-role combat aircraft (MMRCA) programme, Antony clarified that there is no ‘inordinate delay’ and that the issue of life cycle support cost is being discussed, before it goes to the Cabinet Committee on Security. Another reason, he attributed, is that all major procurements of the armed forces will happen only in the next financial year, including the MMRCA, as 92 per cent of the defence budget had already been utilised.

The second tranche of C-130J acquisition (additional six aircraft), he said, was also taking time due to financial paucity. Highlighting its necessity, he said that there is huge demand from the military and the paramilitary forces for the platform as India is short on heavy-lift air capabilities. The relief operations in Uttarakhand, where the aircraft was deployed, and in other operations had indicated the capabilities of C-130J Super Hercules.

DIVERSION FROM CAPITAL TO REVENUE EXPENDITURE

Agreeing that the government had no alternative but to divert nearly 7,900 crore from the capital expenditure to the revenue expenditure to meet the inevitable requirements of salaries and maintenance costs, he said that all acquisitions will take place in the next year. “There is no surrender from the defence budget, gone are the days of surrendering.” Stating that it would be ‘humanly impossible’ to clear all the acquisition programmes in a year, he added that the armed forces had been asked to prioritise and ‘prioratisation cannot be left to the political leadership’.

SEA CHANGE IN DEFENCE INDUSTRIAL PRODUCTION

Concurring with a foreign journalist that the Indian defence industry had not delivered, Antony said that would dramatically change in the coming years. “A sea change is taking place,” he said and added that import would be the last priority. “Defence acquisition would take the route of ‘Buy Indian’, ‘Make Indian’ and ‘Buy and Make Indian’. In the next five to 10 years, we will be able to not only produce for domestic consumption, but for the export market. India imported up to 70 per cent of its requirements and this would change to 40:60 in India’s favour,” he said and remarked “right now, it is not a happy situation.” Artillery modernisation had been delayed, but “things are now moving.” The indigenisation process would bear results soon and put enormous faith in the defence public sector undertakings (DPSUs). “Do not underestimate the DPSUs.”

ACCIDENTS A MAJOR CONCERN

On the issue of regular accidents in the Indian Navy costing lives and equipment, the Defence Minister said, ‘It is a matter of serious concern” and the Indian Navy is taking corrective action and have been advised to follow strictly standard operating procedures. The assets of the Indian Navy have substantially increased and in the last 10 years the Indian Navy has come to be among the most powerful and advanced navies of the world. Many countries were keen on having seafaring exercises with India as the Navy was equipped with the most modern platforms and many more in the pipeline.

CEASEFIRE VIOLATIONS, MAJOR TEST WILL BE IN SUMMER

Asked about the continued ceasefire violations on the Indo-Pakistani border, Antony said the violations had come down post the meeting of the two Director Generals of Military Operations. “We are in a volatile and dangerous surroundings and our armed forces are on a 24 x 7 vigil.” However, he said, one had to keep one’s fingers crossed as the actual test will be in summer, nonetheless the Indian forces are ever prepared.

ROLE IN AFGHANISTAN

The Defence Minister clarified that India had no ‘military role’ in Afghanistan but was concerned with the fallout after the withdrawal of the US forces from Afghanistan. “We are taking steps, but I cannot tell you what those steps are.”