Arms Merchants Crowd Asia

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SPACE WIRE

 

Advantage India as global arms merchants crowd troubled Asia

 

NEW DELHI (AFP) Feb 05, 2003

Nuclear India's growing military needs have made it the jewel sought

by Western armaments firms but Delhi is now studying offers more

closely than imports it blindly ordered from its Cold War ally, the

Soviet Union.

Experts estimate that India's annual defence budget could soar by

five billion dollars to 20 billion dollars and that it would carry a

bulging purse of 100 billion dollars for military purchases spanning

the next decade.

 

"Among the developing nations, India's defence spending is the

largest apart from the United Arab Emirates and so India today is in

a position of strength to dictate terms," said former Indian air

force chief S.K. Kaul.

 

The comments came a day before the arrival of French Premier Jean-

Pierre Raffarin, who is likely to press India to buy 120 Mirage-2000H

jets worth eight billion dollars besides holding talks on the sale of

French Scorpene submarines.

 

"Every time a visitor comes, he comes as an arms peddler with a

delegation -- just like the British who came to hawk the Hawk," Kaul

said of Prime Minister Tony Blair who personally lobbied to sell the

British trainer jet to India tagged at 1.63 billion dollars for 66

units.

 

The Soviet Union was India's largest arms supplier, accounting for 70

percent of its military hardware, followed by France, Britain and the

United States.

 

Kaul and others said India's burgeoning foreign exchange reserves,

its new status as a nuclear weapons state and its growing military

needs made it vital that New Delhi sought counter-guarantees in long-

term arms contracts.

 

"Oman wanted spares of British-built Jaguar jets from us but Britain

did not allow it because we could have grabbed their market with

lower production costs, and so they are protectionist which India has

to fight now," Kaul said.

 

"India should not just have a buyer-seller relationship because after

money is made the seller forgets the buyer, who comes to grief.

 

"But if it is a commitment from both sides like manufacturing, buy-

back arrangements and offsetting trade then a long-term deal is

sustained and honoured," the former airforce chief said.

 

India's British- and French-built military assets and US-backed

defence projects suffered hugely due to Washington's sanctions on

India in retaliation for nuclear tests ordered by New Delhi in May

1998.

 

"France stood by us during the sanctions but since its commercial

interests in Pakistan are harmful to us we have to have quid pro quos

in place with them as well," a senior defence ministry source said.

 

India's nuclear rival Pakistan is France's third best customer after

Taiwan and Saudi Arabia, with sales between 1991 and 1997 accounting

for 1.5 billion dollars. Islamabad now plans to acquire French

stealth frigates being built for the Saudi Arabian navy.

 

"We are also coming out of contractual obligations with our ally

Russia and India will have now to insist on provisions on third-

nation sale, technology transfers and on glitch-free spare supply-

lines," the ministry official added.

 

Uday Bhaskar, deputy chief of the Institute of Defence Studies and

Analysis think-tank, conceded that India signed along the dotted

lines on military deals with the Kremlin as it had no other supply

source during the Cold War.

 

"India was really not as enabled as a buyer then as it is today...

Now the context has changed and India is more aware how much it can

get because of the decline of arms sales globally and because the

number of major buyers is now restricted given the fact that these

platforms are becoming as expensive and as large as they are.

 

"My sense is that the entire Indian effort is now geared towards

greater degrees of joint ventures an third-nation supplies and the

awareness of what the global market is all about is far, far more

than what it was 10 years ago," Bhaskar said.

 

Former chairman of India's Hindustan Aeronautics Ltd. (HAL),

Krishnadas Nair, said his company, which so far has made 1,200

aircraft, had proved that joint ventures were beneficial.

 

"We have had this buyer-seller relation for too long which has not

worked at all and HAL signed many many partnerships because I as its

chief had wanted durable relationships," Nair told AFP.