Don’t miss the latest developments in business and finance.

Us Sees India As Arms Market

Image
BUSINESS STANDARD
Last Updated : Jan 28 2013 | 12:54 AM IST

They represent the best names in the business. They have a reputation for being tough, lean and mean. But even for this formidable 10-member defence industry team, the visit to the US last month was "like the shock of taking a dip in a very deep, very cold lake", because it was such a new, exhilarating experience.

The delegation was led by Atul Kirloskar, managing director of Kirloskar Oil Engines Ltd and chairman of the CII national committee on defence. The team comprised representatives from such private and public sector defence manufacturers like Bharat Electronics Ltd, Larsen and Toubro, Hindustan Aeronauticals Ltd, Tata Infotech and Tisco.

The visit was their first experience of trying to do business with behemoths of the US military industry - Lockheed Martin, which is one of the biggest contributors to President George W Bush's election campaign, Raytheon, Northrop Grumman, Boeing and United Defense.

More From This Section

A US-India defence industry seminar at Washington DC attracted not just the best and biggest in the US defence industry, but also heavyweights in the state department such as Douglas Feith, under secretary of defence, Lt Gen Tome Walters, director of the Defence Security Co-operation Agency and Lt Gen Lawrence Farrell, CEO of the National Defence Industrial Association.

The team's trip was momentous because for the first time they understood, first hand, what heights defence co-operation between India and the US could touch - and more importantly, the limits to this co-operation.

Transfer of missile, nuclear, satellite-launch vehicle, chemical, biological and high technology was out, they were told clearly. Such technology as was offered to India would have to be subject to "no third party transfer" - so the export of the technology was out, except for dual use items, which would require a licence for export.

The US could, at short notice, rescind contracts for technology offered to India if there was any change in the regional security scenario (read sanctions if India and Pakistan went to war). And there was a strong hint that the US would like to continue seeing India as merely a market for selling US manufactured products ("why reinvent the wheel" was the argument).

However, the team found a huge potential for co-operation in areas like military aviation, electronics and radar communication, electronic warfare equipment and military vehicles, which do not attract any export control regulations.

On this visit, the Indian team also discovered that the US system was so entrenched it could give the Indian bureaucracy a run for its money any day and realised how mandarins could become force multipliers for industry - for they also found, for the first time, the Indian government a willing and aggressive backer of their plans to make inroads into the US defence manufacturing industry market.

Indian excitement was also fuelled by good, wholesome greed: no Indian industry can imagine spending the kind of money that the US does on research and development. And with 26 per cent FDI in the defence sector, Indian defence industry could do with some dollar investment.

Although it is too early to count the rupees and paise earned by industry through co-operation with the US in defence, even the task of identifying areas of synergy could lead to a gentle deflowering of Indian defence industry's innocence.

Also Read

First Published: Jun 12 2002 | 12:00 AM IST

Next Story