By Shankkar Aiyar Published: 07th June 2015
There is nothing official about it. Not yet.
On May 7, two days before the Victory Day Celebrations in Russia, two warships of the People’s Liberation Army Navy—Linyi and Weifang—crossed into the Black Sea via the Bosphorous triggering raised eyebrows.
On the face of it, the Jiangkai II class (054A) guided missile frigates were part of the Chinese contingent attending the celebrations. The two warships—berthed at Novorossiysk—were also scheduled to take part in the first Sino-Russian joint exercise in the Mediterranean. The coincidence of the showcasing of the frigates hasn’t escaped informed comment. If the buzz is to be believed,
China wants to sell frigates to Russia—low cost options for Russia, to replace older vessels and continue with its defence programme.
It is early days for outcomes. This being Russia and China, opacity rules —there may or may not be any public confirmation. There is no disputing the audacity of the aspiration. There is no denying the rise of Made in China arms either.
Earlier this year, China emerged as the third largest arms exporter of the world, dislodging Germany. Research by the Stockholm International Peace Research Institute reveals that arms exports from China have shot up 143 per cent in five years.
Since 2010, China has exported arms to 35 countries, including Pakistan, Iran, Venezuela, Tanzania, Sudan, Sri Lanka, Nigeria, Thailand and most recently a missile defence system to Turkey. The value of the deals isn’t very high, not yet. What is remarkable is the range of arms—air defence systems, drones, artillery, missiles and ships—that China exports.
There is a method in its market expansion. In South Asia—Pakistan, Bangladesh, and Myanmar—the idea is supremacy and containment of India. In Latin America, it is about expanding trade and bagging mega projects. In Africa, where it exports to 18 countries, it is about access—commodities, labour and markets.
Interestingly, China’s transition—the largest importer between 2005 and 2009 to the marquee of top exporters—is rather recent. Although indigenisation was always on the agenda —and Tiananmen and Taiwan Straits crises underlined the imperative—the real big push came in 2006 when the Communist Party of China decided to integrate civilian and military capabilities. The focus was to acquire—and the operative definition is access and acquire—technology to innovate. The aim was to bring down import costs, create scale and to raise resources through exports to fund research and defence spending.
Compare this with the Indian experience. India too had recognised the need to integrate civilian capabilities and the need to make in India as early as in 2003. The big elephant was the absent private sector. The thesis then was that private sector couldn’t be trusted although India was importing from private foreign companies. In 2004, the Vajpayee regime appointed a committee under Vijay Kelkar to draw a blueprint for renaissance.
The Kelkar Committee submitted its first report in April 2005 to the new UPA regime. Believe it or not, the report was never made public—even the Chairman of the Parliamentary Standing Committee on Defence was denied access. The Kelkar Committee Report is yet a secret document!
The report—which drew out a new architecture for defence production —recommended a swathe of changes, including autonomy and corporatisation of Ordnance Factories, listing of defence PSUs to raise resources, opening up to private sector and creation of a partnership model with private companies.
The recommendations itself were parcelled into do, discuss, debate and committee zones. Typically convenient cherry-picking prevailed. Result: Ordnance Factories are yet a mess, acquisitions are tardy and the offsets regime is enveloped in a dense fog. Yes, FDI cap has been relaxed to 49 per cent but with caveats and issues of technology transfer persist.
In 2015, India is the largest importer and ranked 22 among arms exporters.
The virtue of decision and action is best reflected in the spend-trend. SIPRI’s trend indicator value shows that China’s imports have been driven down significantly. Studies (courtesy Dr Sam Perlo-Freeman/SIPRI) show that between 2010 and 2014, the total volume of China’s imports was 42 per cent lower than in 2005-2009. The savings were deployed on domestic arms procurement and R&D.
In India, in stark contrast, between 2005 and 2015, allocations under the capital account in defence budget have risen from Rs 34,375 crore to Rs 94,588 crore. Between 2005 and 2014, the country imported armoured vehicles, engines, sensors, naval weapons, missiles and air defence systems besides aircraft and ships. Many of these items India can and should be making at home—creating jobs and propelling growth.
India lost a decade. The difference is really in the evolution of strategic thinking—in China and in India. China aligned national security and economic growth. India must do so too!
Make In China: Now, Warships for Russia? -The New Indian Express