India has, for the first time, agreed to permanently host military units belonging to a foreign power. A watershed in this country’s military history, the implications of the defence agreement signed recently with Singapore are profound.
Not only does it herald the modernisation of India’s military establishment, but it also demonstrates that defence — traditionally the most jealously guarded and isolated state domain — can be fused with commerce. Properly managed, the interplay between the two can rejuvenate India’s ailing defence sector. Ironically, opening this secretive world and redefining what is ‘sensitive’ will herald a new era for productive international cooperation.
A small step for dynamic little Singapore — whose military units are scattered around the globe from Australia to the US — the agreement is a giant step for India’s relatively opaque, inflexible and bureaucratic defence sector. The agreement follows several joint exercises and it was thanks to Singapore that India got its first peek at the dreaded F-16, which forms the backbone of Pakistan’s strike wing. Now, India will lease to Singapore a base and other facilities at Kalaikunda to station the F-16’s most modern version. The IAF will have unparalleled access to equipment and operational plans and be able to engage in mock combat with the F-16s.
Benefits for India go beyond the tactical. The treaty positions Singapore to become the primary investor in India’s defence sector. It opens the possibility of replicating in the defence sector, which was closed till now, the impact that the Comprehensive Economic Co-operation Agreement (Ceca) signed just two years ago had on the economy.
<b1>Instigated by the search for capital to rejuvenate India’s fraying infrastructure, Ceca marked a radical change in mindset. With it India reintegrated itself into the global economy by granting ‘pre-establishment’ — the right for Singaporean enterprises investing in India to be treated on par with local firms. Levelling the playing field and removing restrictions on the flow of capital had dramatic consequences. The agreement made Singapore the syringe for investment into India, making 9 per cent and higher growth possible. It was sorely needed to free Indians from economic misery and build the infrastructure necessary for modern life. It also made Singapore the springboard for Indian firms seeking a global market. Unlike India, Singapore has free-trade treaties with all the major economies, which is why nearly 3,000 Indian companies have set up shop there.
India has lavished massive funds on defence, unlike infrastructure. Despite this, India has failed to translate aspirations of building a high-tech indigenous and self-sufficient arms industry into reality. Indeed, the story of home-grown weapons systems is one of profligacy and design failure.
The supposedly state-of-the-art Light Combat Aircraft (LCA) is decades behind schedule, and research and development costs have multiplied. The LCA will not go into production until at least 2010, to be manufactured at a very low rate of some ten planes a year for two decades. At that rate the lca will be obsolete before the last one is delivered to the IAF. The Arjun Main Battle Tank is still not operational 30 years after the programme began. It is too big for India’s current tank transporters and so far the army has committed to buying less than 150 units — making it impossible to recoup more than a tiny fraction of the development costs. Even the Guided Missile Development Programme initiated in 1983 records more failures than successes. Only two IGMP projects — Prithvi and Agni — have been deployed while several others including two surface-to-air systems and an air-to-air missile are still in the development stage more than 25 years later. They will never be anything more than technology demonstrators.
India’s military establishment is now willing to cast off its cloak of secrecy and misplaced notions of autarky in an attempt to repeat the changes that transformed the private sector. As part of this plan, India recently allowed foreign investors to acquire up to 26 per cent of the equity in defence firms. There were few takers because there is no mechanism for the investor to ascertain how these companies perform.
The Indo-Singaporean agreement offers a partial solution. By choosing to expose its defence establishment, India hopes that visibility will engender in Singaporeans the confidence to invest. But this may not be inducement enough. Nor will monetary investment alone benefit India. What is required is an infusion of new thinking, organisation and technology — which Singapore is ideally positioned to provide. Investors will only risk capital if they are permitted to actually have a say in how their money is spent.
This may require further negotiations. Singapore’s unparalleled record of ground-breaking treaties with India indicates that if given the chance it could transform India’s ailing defence establishment. Doing so would strengthen the sinews linking India to Southeast Asia and give a new dimension to providing security — the primary obligation of any state. Contrary to popular perception, being open about defence will actually enhance our security.
Deep K Datta-Ray is working with the Ministry of External Affairs.