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9 THE HINDU THURSDAY, JULY 24, 2014
NOIDA/DELHI
COMMENT
I
n Libya, militias armed with shoul-
der-launched missiles are battling
for control of the countrys main air-
port. In Africa, the entire Sahel region
is awash with weapons that include
portable air defence systems leftover
fromthe ouster of Muammar Qadha.
Then theres Syrias civil war, in
which thousands of soldiers have de-
fected and set up new battalions that
have shot down military helicopters
and jets. And in Iraq, the al-Qaeda
breakaway group that has taken huge
swaths of territory seized weapons de-
pots all along the way.
The world is pockmarked with vola-
tile hot spots stretching from West
Africa to Central Asia a wide arc where
commercial ights and airline passen-
gers could potentially be at risk from
ground-based weapons. Although
counter-terrorism and weapons ex-
perts say the skies are largely safe, the
downing of Malaysian Airlines Flight
17 illustrates the dangers inherent in
any ight over unstable territory
where sophisticated weapons might be
available to militants.
OnTuesday, those risks were under-
scored by the U.S. Federal Aviation
Administration, which told American
airlines they were prohibited fromy-
ing to the Tel Aviv airport in Israel for
at least 24 hours following the explo-
sion of a rocket red from Hamas-
ruled Gaza in the latest war between
Palestinians and the Jewish state.
The FAA has also prohibited ights
inLibya, northernEthiopia, NorthKo-
rea and the eastern Ukraine Crimea
region, and prohibited ights below a
certain altitude in Iraq and Somalia.
Some 50 to 60 countries around the
world possess radar-guided high-alti-
tude missile systems like the one that
shot downthe Boeing 777, according to
John Pike, director of military infor-
mation website GlobalSecurity.org.
Smaller weapon threat
A much smaller weapon that poses a
more immediate threat are the hun-
dreds of thousands of portable missile
systems in circulation called MAN-
PADS, which can strike targets ying
as high as 15,000 feet, Pike and others
said.
Countries on the FAAs prohibited
list that likely possess the kind of mis-
sile that brought down the Malaysian
jet are North Korea, Israel and Ethio-
pia, Pike said. But those countries have
armies that are incontrol of their arse-
nal.
The FAA has another list of places
that it says pose a threat to U.S. air-
craft, including Mali, Congo, Kenya,
Yemen, Egypts Sinai Peninsula, Syria,
Iran and Afghanistan.
Of those places, Pike said, only Iran,
Egypt and Syria possess sophisticated
air defence technology, with Libya in
question.
The notion that a complex system
like this could fall into the hands of
irregular forces, who could turn
around and start using it, well, the
world that doesnt work that way,
Pike said. Its just too complicated.
Withsomany armed conicts across
the world, it is unrealistic to expect
airliners to avoid all these places, said
BrianJenkins of the Rand Corporation
think tank.
If there were to be a rule that sim-
ply said commercial airlines cannot or
should not y over any country where
theres an ongoing conict, he said,
we would be removing a huge amount
of territory. AP
In international ight, volatile
conicts abound
T
here has been a concerted at-
tack on India from the usual
suspects in recent days even as
it was entering into negotia-
tions to formally accede to the Nuclear
Suppliers Group. As if on cue, Janes In-
telligence Review carried out a (non)-
expos of an Indian military nuclear fa-
cility in Karnataka. As exposs go, it was
lame even by Janes standards. The na-
ture of the facility and locationhave been
publicly available since 2010. Yet, this
new expos was carried by all main-
stream print news outlets and predict-
ably sensationalised with everyone
feigning alarm and anxiety. This manu-
factured outrage culminated with a sanc-
timonious editorial in The New York
Times that was remarkable for the sheer
incoherence of its own arguments. As the
designated chief of the non-proliferation
ayatollahs (with blinkers) and represen-
tative of a motley anti-India group in the
U.S. that is shrinking ever so rapidly, this
too was on expected lines.
Assault on credentials
Nevertheless, it is important to dis-
mantle the uneasy arguments of this con-
certed assault on Indias credentials. The
rst proposition that must be taken issue
with is the propagation of a falsehood
that Pakistan and its reckless build-up of
nuclear stockpile is somehow driven by
Indias posture. While Pakistans care-
less impulse may be a result of more than
one central factor, it is important to un-
derstand that this may have a lot to do
with its suspicion of American inten-
tions. The oft-quoted argument is that
Pakistan seeks to equalise the conven-
tional mismatch with India through a
misguided reliance onnumbers of strate-
gic and tactical warheads. The irratio-
nality and illogic of this behaviour has
been proven by the fact that a country
like North Korea has deterred both the
U.S. and South Korea with explosions
that may not even have been nuclear.
Pakistans vertical proliferation has no
mooring to Indias strategic programme
only to its own paranoia. The question
is what fuels this? There is no denying
the fact that Pakistan was able to obtain
nuclear immunity for its sub-conven-
tional activities against India with even
10warheads. It may well be the fear of the
U.S. that motivates its build-up today.
One motivator is the pressure the U.S.
has been applying on Pakistan (without
success due to the China factor) to sign
onto the Fissile Material Cut-off Treaty
(FMCT), which will forever cap the Pa-
kistani arsenal. Contrary to what the
commentary would have us believe, the
FMCT, instead of curbing ssile materi-
al, has demonstrably accelerated Pakis-
tans programme. So much for awed
logic. The second is the fear of the Amer-
ican Plan B, which involves the seizure
and conscation of much of Pakistans
nuclear arsenal. The former has driven
Pakistan to enrich their extant stockpile
of radioactive material to weapons grade
at breakneck speed. The latter has en-
sured that Pakistan is rapidly weapon-
ising its ssile stock, in order to disperse
and complicate any such weapons sei-
zure plans. These facts are well under-
stood in Washington policy circles. The
exposs and op-eds of the past weeks are
for most just another edition of Aesops
fables.
The second issue has to be the demon-
strated lack of understanding of the real-
ity that shaped the landmark civil
nuclear agreement between the U.S. and
India. This nuclear deal was based onone
clear principle that Indias military
programme would irrevocably be sepa-
rated from the civilian programme. This
was not an optimal solution for India or
for the P5, but like all international
agreements it was based on arriving at an
outcome that would benet all parties
and enhance the global order. Interna-
tional Atomic Energy Agency (IAEA) Di-
rector General Mohammed El Baradei in
an op-ed in the Washington Post, speci-
cally welcomed the deal without reserva-
tion, his rationale being either we begin
nding creative, outside-the-box solu-
tions or the international nuclear safe-
guards regime will become obsolete.
This is now accepted wisdom. The IAEA
has gained unprecedented access to In-
dias nuclear facilities. India has accepted
additional protocols this June, and has
strengthened its own export laws. Signif-
icantly, the same journals and reports
conrm that Indias own arsenal has re-
mained stable over the period with no
increases despite the turbulence in the
neighbourhood. The benets of bringing
India inside the non-proliferation tent
are therefore vast, visible and tangible.
While these editorials and reports may
very well have got their facts and num-
bers right, the analysis is so convoluted
that the facts they quote cease to be rele-
vant. The argument goes that India needs
tosignthe FMCT, the CTBT, and agree to
mutual weapons reduction with China
and Pakistan, since it is the nuclear deal
with the U.S. that has set the cat amongst
the pigeons. Here then is some measure
of reality. India is already providing ac-
tive support to the FMCT negotiations
it is a work in progress, not yet a concrete
treaty. It has been Pakistan that has been
blocking the work at the conference on
disarmaments negotiations.
Additionally, Indias signature on the
CTBT is explicitly linked to a similar U.S.
and Chinese commitment. As long as
they do not ratify these two treaties, In-
dia has a voluntary unilateral moratori-
umon testing. What is holding up Indian
accession is U.S. and Chinese accession.
Experts in Beijing claim that Chinas
expansion and modernisation of its nu-
clear forces is being driven by the ill-
advised and deeply destabilising with-
drawal of the U.S. fromthe Anti-Ballistic
Missile (ABM) treaty. This has nothing
whatsoever to do with India.
India, therefore, is rst being made the
whipping boy for the failure of the Amer-
ican non-proliferation lobby in their own
country and then it has to accept blame
for the complex relations the U.S. shares
with Pakistan and China that is driving
these Asian allies to increase their arse-
nals. Can we get real, please?
(Samir Saran is vice-president and Ab-
hijit Iyer-Mitra is programme coordina-
tor at the Observer Research
Foundation.)
Knowing Indias nuclear credentials
The civil nuclear deal, hinged on one clear principle that Indias
military programme would irrevocably be separated from the civilian
one, was based on arriving at an outcome that would benet all
parties and enhance the global order. Picture shows the Jaitapur
nuclear power project site. PHOTO: VIVEK BENDRE
Manufactured Western outrage ignores the reality that under the landmark 2005 India-U.S.
agreement, the IAEA has unprecedented access to Indian nuclear facilities
Samir Saran and Abhijit Iyer-Mitra
New Delhi is already
providing support to FMCT
negotiation; its signature
on the CTBT is linked to
similar commitments by
the U.S. and China
W
hen Finance Minister Arun Jaitley
kept the FDI cap in defence at 49
per cent, he said: Our assessment of the
market is that the 49 per cent FDI limit in
the sector would be a signicant step in
establishing domestic defence market.
The public opinion and Parliaments
opinion in India is ready to accept the
proposal that I have made.
Mr. Jaitley was alsoinconsonance with
the policy sentiment that has evolved
within the government over many years.
As far back as in 2004, key economists
argued before the Planning Commission
that 100 per cent FDI in high technology
would enable India to reduce or limit its
technology imports; in2008, the National
Manufacturing Competitiveness Council
constituted by former Prime Minister
ManmohanSinghhad recommended FDI
to facilitate technology transfer and en-
hance manufacturing in strategic sectors
like aerospace; four years back, the Com-
merce Ministry had recommended 74 per
cent FDI (a recommendation that re-
mains despite the exit of the United Pro-
gressive Alliance government). But
former Defence Minister A.K. Antony
had vetoed this, deeming it politically
unwise.
Opposition from industry
With elections in key States set to take
place later this year, it would appear that
Mr. Jaitley also preferred to play cau-
tious. The chorus of opposition fromkey
industry bodies like Confederation of In-
dian Industry (which supported a liberal
FDI cap only to back down later), and
Federation of Indian Chambers of Com-
merce and Industry would have helped
Mr. Jaitley in his decision. FICCI, seen as
the embodiment of the 1960s era state
protection, warned that Indian industry
would lose out, foreign companies would
dominate the sensitive and highly strate-
gic defence market, and no signicant
technology transfer would take place. It
even brought out a laundry list detailing
its views on defence FDI. It said a higher
FDI should lead to full platforms being
produced withminimumcapitalisationof
$100 million; the proprietary technology
canbe indigenised and further developed;
the foreign partner will undertake to
source 50 per cent to 70 per cent of com-
ponents/subsystems by value from Indi-
an vendors; the technology received
should come without restrictions on its
global exploitation and; no retrospective
law should be applicable to restrict tech-
nology exploitation.
The list underscored the sad fact that
when it comes to defence, Indias private
and public sector industries lack tech-
nology, expertise and skills. India lags far
behind the West, Japan, South Korea and
Taiwan in the Technology Standing In-
dex. A 2011 global study by the Martin
Prosperity Institute of the University of
Toronto measured 82 nations on tech-
nology, innovation, human capital and
other measures of economic competitive-
ness, with the focus on Research and De-
velopment, scientic and research talent
and innovation. Israel topped the list fol-
lowed by Sweden, Finland, Japan and
Switzerland. The U.S. gured sixth; India
was 38. India placed 36 in terms of scien-
tic and engineering researchers per cap-
ita and 26 in terms of patents per capita.
But the report card is not all that poor.
Technologies such as composites or y by
wire have been painfully built up (owing
to U.S. sanctions) over many years, en-
tirely through indigenous effort in places
like the Defence Research and Develop-
ment Organisation.
Some technologies owing from the
Kaveri engine programme have been
transferred to the private sector and
these are being exported in the form of
aerospace components. But the Kaveri
engine itself failed to deliver the required
thrust for the LCA Tejas ghter and had
to be dropped, its place taken by the Gen-
eral Electric engine.
India is a world leader in ship design
and building but is poor in electronics,
sensors and naval weapons. To date, the
Army lacks a carbine considered essential
for close quarter battle. Trials are on to
select, fromamong ve foreign vendors, a
suitable assault rie. The Ordnance Fac-
tory Board is working on a improved
variant of the three-decade-old Bofors
howitzer. The list goes on.
Foreign vendors are more than willing
to sell or collaborate. But a straight sale
means India resorts to another import 20
years down the line when the equipment
in question has become obsolete. Collab-
oration does not necessarily result in
state-of-the-art technology coming to In-
dia. Foreign MNCs that have joint ven-
tures in India are clear that the 49 per
cent cap on FDI is not unattractive.
Helicopter maker Sikorskys India head
Air Vice Marshal (retd.) Arvind Walia
said: Forty nine per cent FDI is a wel-
come step but if it goes to 51 per cent and
beyond, it will help build technologies
here, train local talent and skills. Foreign
vendors will bring in new business prac-
tices. Higher FDI limits will give us the
exibility to take a call and provide the
best solution.
Others admit it could bring in foreign
rms that wish to take advantage of In-
dias lower cost labour base and of course,
49 per cent equity translates into a larger
share of prots. Small and medium en-
terprises could benet here as they are all
looking to get into the global supply chain
but lack capital and technology. The only
point is this technology may not be of the
high-end variety.
As a senior executive ina multinational
defence major in India described it: For-
eign rms need to be in control since it is
their technology, developed often at con-
siderable cost, and therefore the need to
protect their intellectual property. This is
non-negotiable.
The result is that the movement to-
ward FDI has been slow and halting, with
the Defence Ministry blamed for being
reluctant to shake off old mindsets and
attitudes. Security considerations also
seemed to have weighed heavily on the
government. Domestic private industry
was allowed into defence only in 2001
when the realisation (nally) dawned on
the government that the public sector,
with its low levels of productivity and
virtually no Research and Development
vision, would not be able to deliver a self-
sustaining military industrial base. There
followed a slew of other measures.
In 2003, the Defence Procurement
Procedure was amended to include the
Buy and Make category to allow Indian
industry to build equipment through
technology transfer; in 2006, an offsets
policy was introduced in projects of Rs.
300 crore and above; in 2008, Indian in-
dustry was given rst preference in li-
censed production contracts; in 2011,
private shipyards were allowed to enter
naval shipbuilding; in 2012, foreign ven-
dors were encouraged to tie up with Indi-
an small and mediumenterprises.
Other steps followed. In 2013, Indian
companies were given rst preference in
various categories of defence production.
A Technology Perspective and Capability
Road map was also unveiled to give Indi-
an industry advance intimation of the
militarys future requirements. Small and
Medium Enterprises were targeted for
nancial help. Indigenisation directo-
rates were set up by each of the three
services to indigenise spare parts and
small equipment.
Short of expectations
But results fell far short of expecta-
tions. Amit Cowshish, former Financial
Adviser (Acquisitions) in the Defence
Ministry, wrote recently: The policy for
providing assistance to the small and me-
dium enterprises was drafted by the De-
partment of Defence Production
sometime in 2006 or 2007, but it was
never promulgated. Consequently, no al-
location was ever made under the afore-
said budget head since it was created. The
Directorates of Indigenisation continue
to function independent of each other
and without linkage with the overall in-
digenisation effort. Suggestions to intro-
duce outcome budgeting for these
directorates were treated withinthe MoD
with total indifference.
The end result was confusion, and, of
course, no progress in procurement. It
has led some industry insiders to suggest
that India scrapthe DPPand returntothe
good old days when all deals were gov-
ernment-to-government. At least it en-
sured the services got the equipment they
wanted in the desired time frame. That
would be wishful thinking but the last
word on FDI in defence is still awaited.
Mr. Jaitley said If I can get technology,
capital and manufacturing at 51 per cent
Indian ownership. Thats the challenge.
(Surya Gangadharanis chief editor, De-
fence and Technology Magazine and a
strategic affairs commentator.)
Searching for the ideal FDI in defence production
NAUTICAL MILES BEHIND: India is a world leader in ship design and
building but is poor in electronics, sensors and naval weapons. Picture
shows the indigenously developed warship INS Chennai in 2010.
PHOTO: VIVEK BENDRE
Foreign vendors are more than willing to sell or collaborate but this does not necessarily bring
state-of the-art technology to Indias military hardware
Surya Gangadharan
A straight purchase by
India of foreign weaponry
means another import 20
years down the line when
the equipment in question
becomes obsolete
G
iven recent German indignation about the National Security
Agency, it has been easy to overlook the fact that for decades the
German government has cooperated extensively with the NSA on
surveillance activities. But after a high-level meeting in Berlin this
week, this long-standing but veiled cooperation may have a rmer legal
and political base.
The two countries past partnership became so extensive that they
even developed a special logo for their joint signals-intelligence activity,
known by its initials, JSA. It shows an American bald eagle against the
colours of the German ag, next to the words Der Zeitgeist, or the spirit
of the age.
Like so much else we know about the NSA,
the details about its activities in Germany
come fromEdward Snowden, the former NSA
contractor now living in Moscow. He provided
a trove of secret documents to Der Spiegel,
which published more than 50 online last
month.
German anger about American spying boiled
over recently with the expulsion of the CIA
station chief in Berlin. The Germans were
furious when they discovered that the CIA was
paying a walk-in German agent, adding to
their anger that the NSA had tapped
Chancellor Angela Merkels cellphone.
In an attempt to heal this feud, White House
chief of staff Denis McDonough met Tuesday
in Berlin with his German counterpart, Peter
Altmaier. A senior German official told me his
government was very satised with the
meeting, especially McDonoughs proposal to
develop guiding principles for cooperation
on intelligence matters. While not a formal
no-spy pledge, this agreement might
reassure Germans that their rights would be
respected.
The NSAs relationship with Germany dates
back to a 1962 pact with the
Bundesnachrichtendienst, or BND, as
Germany calls its federal intelligence service.
According to a January 17, 2013, NSA
document summarising the relationship: In
the past year, Germany displayed both
eagerness and self-sufficiency in transforming its SIGINT activities and
assumed greater risk in support of U.S. intelligence needs and efforts to
improve information sharing within the German government, with
coalition partners, and NSA.
Perhaps most striking, given German public rage at U.S. snooping, the
NSA summary credited its German partner for helping to reduce
privacy obstacles: The BND has been working to inuence the German
government to relax interpretation of the privacy laws over the long
termto provide greater opportunity for intelligence sharing.
The senior German government official affirmed that the intelligence
partnership has been very extensive and said we are very happy with
this cooperation. He didnt dispute U.S. estimates that the NSA has
helped disrupt over 50 terrorist plots, including over 20 in Europe. But
the official cautioned that to gain German support for continued
partnership, the U.S. must be more open about its intelligence activities,
and avoid actions that violate the rights of German citizens.
The problemwe face in Germany is not about intelligence collection
anymore, but about public sentiment. The public is extremely upset,
and the German government has to take this into account, the official
said. Pressed about why the German government hadnt been more
honest with its public about the extent of past cooperation, the official
said its a very bad moment to say its all right, after the Snowden
revelations.
Germany had felt the ball was in Americas court, post-Snowden,
and was waiting for the U.S. to set a new framework, the official said.
Tuesdays meeting seems to have sent the message that Merkel wanted
to hear.
Merkel and other German supporters of continued cooperation will
have a political battle ahead. When Der Spiegel published the Snowden
documents, an accompanying story summed up why many Germans
were upset: No other country in Europe plays host to a secret NSA
surveillance architecture comparable to the one in Germany.
The Der Spiegel documents describe the extensive collaboration. In
addition to the day-to-day collection, the Germans have offered NSA
unique accesses in high interest target areas, noted the January 2013
summary. Another document explained that during a January 2012
meeting, a senior German official sought NSAs assistance with
intercepting Skype transmissions. A third document describing a
planned BND visit in May 2013, just over a month before Snowden's
leaks began appearing in the press, noted that top BND officials
continue to express a desire to increase CND [Computer Network
Defense] engagement with the NSA.
Cooperation between the two countries spy services is deeper than
previously believed, as Der Spiegel put it. The U.S. and Germany are
now attempting to rebuild the partnership so that it is more transparent
and, perhaps, develops a more solid political base. 2014.
Washington Post.
Rebuilding a spy
partnership
WORLD VIEW
The U.S. and
Germany are now
attempting to
rebuild the
partnership so
that it is more
transparent and,
perhaps, develops
a more solid
political base
DAVID IGNATIUS