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Author: Udayan Namboodiri
It certainly seems so from the British reaction to the MMRCA decision. India's dense plans for military might has revived the armaments industries of the richie rich countries and their economic revival plans seem indexed to India's strategic vision
Nothing about the weaponry trade is transparent. With a Defence Minister holding the aura of St Anthony it becomes easy to peddle the consensus that the medium multi-role combat aircraft deal, which was reportedly sealed last week in favour of Frances Dassault Rafael, was transparently conducted. But, even if it is conceded that the Raksha Mantralaya has become the last redoubt of bureaucratic honesty, let us be under no illusion that the global arms industry has changed its ways.
The arms trade is evil, not just for the dangerous things it deals with. Corruption is factored into every step of procurement, whether for ships or planes or battle tanks or night vision goggles. Its an exceptional business where the customer is never king. The political clout of the supplier and his government, helped with oodles of bribery and sleaze, lubricates each and every transaction. There is virtually no scope for the buying country to take informed decisions on which ship or gun is best suited to its needs.
The variables involved are quite watery for instance nobody knows what the profit margin on each unit is. David Cameron, the British Prime Minister, this week sought to pacify angry MPs in his Parliament saying he would make every attempt to get the Indians change their minds.
His display of desperation bears out the fact that the future well being of the British economy depends on the Eurofighter Typhoon being chosen over the French Dassault Rafale. One of the crucial give-aways in his remark is the gap between the cost and the sale price of each of these planes.
Only 126 planes would be sold, of them just 18 directly and the rest are to be manufactured in India. Britain is only one of five countries in the consortium which theoretically entitles it to the profits from just 25.20 planes. It becomes clear therefore, that this is no ordinary business with a 20-30 per cent markup. The profits must be huge indeed.
Whether Dassault bags it or Eurofighter, the moolah wouldnt stop at $ 18.04 billion which the Ministry of Defence has reportedly allocated for the planes. The final bill? Well, there will be no final bill. We will keep paying for the MMRCA, as we do for all defence products we import, over the entire life cycle of the plane. Nobody would raise an eyebrow because its about the defence of the realm.
Every time our government finalises a deal for a plane or ship, its only a sign let the games begin. The toughest part of the negotiations begin from that point and its a hush-hush affair. The MMRCA budget does not include the offset agreement, which is yet to be firmed up and entails extra outgo of unspecified amounts, maybe a cool $5 million per plane. Besides, there are innumerable little secret clauses which ordinary people never get to know about. Crucial blueprints are not released without extra payment, vital spares not included in original agreement and so on. Then, about a decade down the road, the planes would come up for upgrade and at that stage, because India would be stuck with the planes, the government of the day would have no option but bend to please. For the original equipment manufacturer, it means a second killing.
In 1987, had not a radio journalist in Sweden broken a story about kickbacks in the Bofors deal, the people of India would never have known that their Prime Minister had betrayed an agreement he had signed with his Swedish counterpart, the late Olaf Palme, about excluding middlemen. Now, 24 years later, we would be extremely naïve to suppose that the Prime Minister of Britain was only being stupid when he assured his detractors in Parliament that it was yet possible to snatch the cake before the French got a bite into it. Of course, Dassault rushed to the media with a statement saying how proud it would be to be associated with IAFs upgrade, but the Indian Governments equivocal attitude, leaving it to the world to clutch at straws for knowing its mind on the status of the agreement, raised much suspicion.
The ignoramus Indian press grabbed only the red herring. Some British MP linked the continuance of DFID aid to India with the Eurofighters acceptance, and headlines were created over a non-story. The real issue did the British PM make his statement on the basis of firm inputs that certain quarters in the Indian government were still open to influence was overlooked. Cameron was quoted as saying: Its not unheard of for a L-2 (second choice, in this case Eurofighter) being selected. Ill do all that I can.
Either way, MMRCA would soon drop out of news cycles. The magnitude of whats round the corner can only be guessed from this observation by Rahul Bedi, the India correspondent of the respected London magazine, Janes Defence Weekly.
In just the next three to four years India will spend $30 billion upgrading its military hardware. By 2022, India is poised to spend another $50 billion. Now, $80 billion is a huge amount of money. Lots of supplies will continue to be Russian because they are an old and reliable partner. For logistical reasons its easy to replace Russian equipment with new Russian equipment. But Indias advance warning capability, radar, reconnaissance and strategic capability hardware is likely to be American. An implicit provision of the nuclear deal was the payback factor.
The entire $80 billion, plus another minimum $20 billion in unofficial payment, would go to a clutch of companies located in five or six richie rich countries. Up to 2008, their trade was growing at an annual rate of 4 per cent, but after the visitation by the single biggest economic catastrophe since the Great Depression, the weaponry companies, much like vast sectors of the economies they are based in, found themselves in big trouble. They looked up to their governments for help. Result: Barack Obamas salesmanship trip to India; Camerons liberty with insightful quotes; Sarkozy inviting an Indian Army band to play at Champs Elysees on the occasion of July 14.
After World War II, the Marshall Plan, or European Recovery Plan, was rolled out by the Freddie Truman administration in Washington to help rebuild a war-devastated Europe. Some $ 13 billion in economic and technical assistance was distributed among eight countries, which won for America permanent leverage in European affairs. Western Europe regained its old prosperity and has not stopped saying thank you to Uncle Sam since.
The Marshall Plan in todays terms works out to $100 billion, maybe even $125 billion. In contrast, India is to hand out over the next ten years some $100 billion among six countries at most. Divided up, each of the supplier countries, which includes Britain, stands to benefit more from the great Indian shopping spree for tanks, planes, ships, submarines, heavy guns and light guns, coffins, radars and jackets than they did under the Marshall Plan.
Whats for the poor of India in all this? MMRCA, three aircraft carriers and dozens of gizmo-fitted other ships and tanks later, India would remain a nation of half-starved, illiterates. Fattening the worlds already rich through excitable threat perceptions is set to become a national cause. An American President, Dwight D Eisenhower (1951-60) made a historic observation in a speech on April 16, 1953, Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
It is time the land of Buddha and Gandhi terminated this mad policy of reviving the world's weaponry industry.
The writer is Senior Editor, The Pioneer
Is India running a Marshall Plan?
It certainly seems so from the British reaction to the MMRCA decision. India's dense plans for military might has revived the armaments industries of the richie rich countries and their economic revival plans seem indexed to India's strategic vision
Nothing about the weaponry trade is transparent. With a Defence Minister holding the aura of St Anthony it becomes easy to peddle the consensus that the medium multi-role combat aircraft deal, which was reportedly sealed last week in favour of Frances Dassault Rafael, was transparently conducted. But, even if it is conceded that the Raksha Mantralaya has become the last redoubt of bureaucratic honesty, let us be under no illusion that the global arms industry has changed its ways.
The arms trade is evil, not just for the dangerous things it deals with. Corruption is factored into every step of procurement, whether for ships or planes or battle tanks or night vision goggles. Its an exceptional business where the customer is never king. The political clout of the supplier and his government, helped with oodles of bribery and sleaze, lubricates each and every transaction. There is virtually no scope for the buying country to take informed decisions on which ship or gun is best suited to its needs.
The variables involved are quite watery for instance nobody knows what the profit margin on each unit is. David Cameron, the British Prime Minister, this week sought to pacify angry MPs in his Parliament saying he would make every attempt to get the Indians change their minds.
His display of desperation bears out the fact that the future well being of the British economy depends on the Eurofighter Typhoon being chosen over the French Dassault Rafale. One of the crucial give-aways in his remark is the gap between the cost and the sale price of each of these planes.
Only 126 planes would be sold, of them just 18 directly and the rest are to be manufactured in India. Britain is only one of five countries in the consortium which theoretically entitles it to the profits from just 25.20 planes. It becomes clear therefore, that this is no ordinary business with a 20-30 per cent markup. The profits must be huge indeed.
Whether Dassault bags it or Eurofighter, the moolah wouldnt stop at $ 18.04 billion which the Ministry of Defence has reportedly allocated for the planes. The final bill? Well, there will be no final bill. We will keep paying for the MMRCA, as we do for all defence products we import, over the entire life cycle of the plane. Nobody would raise an eyebrow because its about the defence of the realm.
Every time our government finalises a deal for a plane or ship, its only a sign let the games begin. The toughest part of the negotiations begin from that point and its a hush-hush affair. The MMRCA budget does not include the offset agreement, which is yet to be firmed up and entails extra outgo of unspecified amounts, maybe a cool $5 million per plane. Besides, there are innumerable little secret clauses which ordinary people never get to know about. Crucial blueprints are not released without extra payment, vital spares not included in original agreement and so on. Then, about a decade down the road, the planes would come up for upgrade and at that stage, because India would be stuck with the planes, the government of the day would have no option but bend to please. For the original equipment manufacturer, it means a second killing.
In 1987, had not a radio journalist in Sweden broken a story about kickbacks in the Bofors deal, the people of India would never have known that their Prime Minister had betrayed an agreement he had signed with his Swedish counterpart, the late Olaf Palme, about excluding middlemen. Now, 24 years later, we would be extremely naïve to suppose that the Prime Minister of Britain was only being stupid when he assured his detractors in Parliament that it was yet possible to snatch the cake before the French got a bite into it. Of course, Dassault rushed to the media with a statement saying how proud it would be to be associated with IAFs upgrade, but the Indian Governments equivocal attitude, leaving it to the world to clutch at straws for knowing its mind on the status of the agreement, raised much suspicion.
The ignoramus Indian press grabbed only the red herring. Some British MP linked the continuance of DFID aid to India with the Eurofighters acceptance, and headlines were created over a non-story. The real issue did the British PM make his statement on the basis of firm inputs that certain quarters in the Indian government were still open to influence was overlooked. Cameron was quoted as saying: Its not unheard of for a L-2 (second choice, in this case Eurofighter) being selected. Ill do all that I can.
Either way, MMRCA would soon drop out of news cycles. The magnitude of whats round the corner can only be guessed from this observation by Rahul Bedi, the India correspondent of the respected London magazine, Janes Defence Weekly.
In just the next three to four years India will spend $30 billion upgrading its military hardware. By 2022, India is poised to spend another $50 billion. Now, $80 billion is a huge amount of money. Lots of supplies will continue to be Russian because they are an old and reliable partner. For logistical reasons its easy to replace Russian equipment with new Russian equipment. But Indias advance warning capability, radar, reconnaissance and strategic capability hardware is likely to be American. An implicit provision of the nuclear deal was the payback factor.
The entire $80 billion, plus another minimum $20 billion in unofficial payment, would go to a clutch of companies located in five or six richie rich countries. Up to 2008, their trade was growing at an annual rate of 4 per cent, but after the visitation by the single biggest economic catastrophe since the Great Depression, the weaponry companies, much like vast sectors of the economies they are based in, found themselves in big trouble. They looked up to their governments for help. Result: Barack Obamas salesmanship trip to India; Camerons liberty with insightful quotes; Sarkozy inviting an Indian Army band to play at Champs Elysees on the occasion of July 14.
After World War II, the Marshall Plan, or European Recovery Plan, was rolled out by the Freddie Truman administration in Washington to help rebuild a war-devastated Europe. Some $ 13 billion in economic and technical assistance was distributed among eight countries, which won for America permanent leverage in European affairs. Western Europe regained its old prosperity and has not stopped saying thank you to Uncle Sam since.
The Marshall Plan in todays terms works out to $100 billion, maybe even $125 billion. In contrast, India is to hand out over the next ten years some $100 billion among six countries at most. Divided up, each of the supplier countries, which includes Britain, stands to benefit more from the great Indian shopping spree for tanks, planes, ships, submarines, heavy guns and light guns, coffins, radars and jackets than they did under the Marshall Plan.
Whats for the poor of India in all this? MMRCA, three aircraft carriers and dozens of gizmo-fitted other ships and tanks later, India would remain a nation of half-starved, illiterates. Fattening the worlds already rich through excitable threat perceptions is set to become a national cause. An American President, Dwight D Eisenhower (1951-60) made a historic observation in a speech on April 16, 1953, Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
It is time the land of Buddha and Gandhi terminated this mad policy of reviving the world's weaponry industry.
The writer is Senior Editor, The Pioneer
Is India running a Marshall Plan?
