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Arms and the market

Defence sales will always be murky. One can only take steps to mitigate corruption. The real issue is: does the gun shoot straight? Chanakya writes.

columns Updated: Feb 16, 2013 23:19 IST

If war is hell, then arms buying is its purgatory. At least that is the case in India. Buying a major weapon in this country has become a guaranteed source of political breast-beating and public outrage.

More worryingly, it has made weapons purchases a bureaucratic obstacle course, taking so long that the arms in question are often out of date by the time shipments begin.

Unfortunately, the right attitude in India should be to accept that defence will always be a messy business. The priority should be less on who made how much and more on whether India got a shield or sword that is true and fast.

This sounds horribly cynical, but it is a necessary yardstick in a country that lives in a tough and dangerous neighbourhood.

Under this priority, India has actually done well. The Bofors howitzer was considered the mother of all defence scandals — and its shadow is one reason why the honest but hopelessly indecisive AK Antony holds the defence portfolio today.

However, by all accounts, it is an excellent piece of artillery. The same goes for the Sukhoi fighters and, industry sources tell me, the AgustaWestland chopper.

There is an inconvenient truth about arms procurement: it will always be vulnerable to dung in its face. Buying a weapon is a different ball of wax than a commercial purchase.

Consider an airliner and a fighter. The specifications of a fighter are things an air force would prefer not to be in the public domain. Then there is the difference in the buyer-seller relationship.

In the defence business both are likely to be partly State-owned or controlled. Many arms makers are monopoly producers. The buyer certainly is.

Militaries are much more concerned about capabilities than costs. An airline could consider an airplane that is 95% as good as its competitor but is 50% cheaper.

An air force can’t: that 5% difference could be the difference between victory or defeat. The airliner can balance it out in the ledger.

That doesn’t work on the battlefield. An airliner knows what machines its competitors have on offer. An air force has to try and guess what the other side will be using 20 years hence.

Then there’s the miasma of technical parameters and details that surround modern weaponry, much of which is now more about electronics, networking and software than it is about engines and machometry.

The result is a highly distorted, politicised market in which national security opacity merges with non-market pricing.

And it is also why applying Gandhian principles to defence buying is nonsensical. Banning middlemen was impractical: one might as well force every housewife to go to the mandi. Blacklisting arms firms for financial impropriety is foolish.

Many firms are the sole producers of this or that widget in the world. India’s recent blacklisting has crippled chunks of the country’s weapons systems. Stick to fines or tossing out personnel. Bring in the jailors when a jawan dies
because of a company’s failure.

It would be nice to buy weapons at fixed prices. The US’s Foreign Military Sales (FMS) system does that. But it can’t work in India. This is another source of muddle when it comes to arms purchases in India: an inevitable multiplicy of defence goals given India’s present strategic evolution.

Fixed price purchases run counter to the ambitious offsets policy that India is trying to put into place. Offsets — essentially local sourcing requirements — are seen by New Delhi as stepping stones to developing a real indigenous defence industry.

Which is fine, but one can’t factor this policy into a fixed price list. It’s a Hobson’s choice: the best way to buy arms clean means you will never make them at home.

Defence should not be assumed to be a cesspool forever. It would be an impossible policy anyway: oppositional politics and a hard-nosed media won’t allow it.

The game should not be to make arms buying as pure as snow. It should be to mitigate corruption and reduce suspicion in the general public.

Announce a set of penalties that do not go into the self-defeating terrain of blacklists. Even evaluating if it makes sense to break a contract halfway should be considered. The services should not be forced to accept a weapon that failed to meet the grade just because television anchors want it so.

After every major arms purchase, New Delhi should issue a paper explaining the entire process that tells why, if any, changes in contract were introduced along the way.

It can never be a wholly frank document, but it should try to at least ensure there is no information vacuum that others can fill.

Last but not least, the services should be allowed to speak a lot more openly about their views on the weapons they use rather than leaving it all to the ossified defence ministry.

The lesson of Kargil was that young officers in uniform have the greatest credibility of all with the public.