Tuesday, 25 May 2010

US high-tech arms to India stumble on safeguards

(Photo: courtesy Ajai Shukla)
The P8A Poseidon MMA ready for flight testing at Boeing, Seattle. The Indian version, the P8I, could be delivered without crucial electronics if India does not sign the CISMOA

By Ajai Shukla
Business Standard, 25th May 10

India’s marked shift towards American weaponry is, paradoxically, leading towards a flashpoint between New Delhi and Washington. Over the next three months, key American military platforms --- including the AH-64 Apache attack helicopter; the C-17 Globemaster transport aircraft; and the M777 ultralight howitzer (ULH) --- come to India for user trials. But New Delhi’s reluctance to sign two technology safeguard agreements demanded by the US could lead to India paying top dollar for American equipment that is divested of the cutting-edge electronics that makes it special.

With neither side giving ground, negotiations have stalled. Before meeting last week in Washington, the US-India Defence Procurement and Production Group (DPPG) --- which coordinates equipment transfers between the US and India --- quietly removed from its agenda a long-running discussion on the two contentious safeguards: the Communications Interoperability and Security Memorandum of Agreement (CISMOA); and the Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation (BECA).

Also threatened by this continuing stand-off is the transfer to India of crucial avionics, satellite navigation aids, and secure communications equipment that power two advanced American platforms that India has already bought: the P8I Poseidon multi-mission maritime aircraft (MMA); and the C-130J Super Hercules transport aircraft.

US law mandates that certain sensitive American electronics can only be transferred abroad after the recipient country signs the CISMOA and/or the BECA. But New Delhi treats all defence agreements with the US as political hot potatoes. Last year India reluctantly signed up for an End User Monitoring (EUM) Agreement with the US after extended negotiations that eventually kept American inspectors away from Indian military bases. Simultaneously, New Delhi flatly rejected a US proposal for a Logistics Support Agreement (LSA) that would have formally allowed US forces ready access to Indian logistics. The EUM agreement and the LSA faced vocal domestic opposition, notably from the Left.

Manohar Thyagaraj, a security analyst who studies the US-India strategic relationship, explains, "Foundation agreements such as CISMOA and BECA are required by US law for providing another country with the most advanced electronics on US weapons platforms. These agreements are common for all countries that receive US high technology and are not unique to India.”

The CISMOA signed between the US and Korea in October 2008 aims “to promote tactical systems interoperability” between the two armed forces by allowing the US Department of Defense to provide “Communications Security (COMSEC) Equipment” to protect sensitive data during communications. The Indian MoD is apprehensive about permitting the US to fit COMSEC equipment into the platforms that India buys.

If the stand-off over the CISMOA continues, India’s eight P8I Poseidon aircraft, which cost US $2.1 billion, will be delivered with a down-rated avionics suite, not the high-end electronics that make the P8I a leader in its class.

Talking to Business Standard, Egan Greenstein, Senior Manager for Business Development, Boeing Defence, explained, “The signing of the CISMOA would be essential for a high-tech system like the P8I. It is absolutely packed with sensitive technologies. The US wants to share these technologies with India but will make sure that they are suitably protected by the CISMOA.”

The growing distance between New Delhi and Washington on the CISMOA is causing frustration on both sides. A US official complains, “Both sides are just kicking the can down the road, hoping that someone, sometime will see the light and actually do something real about it.”

American vexation was officially conveyed during the visit of US Defence Secretary, Robert Gates, to Delhi in January when he urged Prime Minister Manmohan Singh; and Defence Minister, AK Antony; to sign the CISMOA and the LSA.

Addressing the press after his meetings in New Delhi, a chagrined Robert Gates pointed out, “These agreements have been laying around for quite a while… this is not some new requirement that has just emerged. [These agreements] are preponderantly in India’s benefit, because they give high-tech systems additional high-tech capabilities… are enablers, if you will, to the very highest quality equipment in the Indian armed forces.”

Since the US Defence Secretary’s visit Washington has written back, using concrete examples --- including the P8I and the C-130J aircraft --- to illustrate to New Delhi what capabilities it will pass up by refusing to sign the CISMOA and BECA.

The next discussion on these safeguard agreements is likely during the inaugural US-India Strategic Dialogue from 1st to 4th June, when India’s Minister of External Affairs, SM Krishna, meets US Secretary of State, Hillary Clinton, in Washington.

29 comments:

joydeep ghosh said...

This is blackmail by the US

Is there any guarantee that they will not attach bugs to these systems that will allow them to virtually know everything that IAF or IA does with these systems. Or will not share them with Pakistan, China.

Whatever may be said, if these sysems cant be had with out CISMOA or BECA so be it.

South Korea does not have hostile countries surrounding it, which unfortunately is the case with India.

India cant risk its operational readiness in anyway, right.

whatever it may India should insist on these systems without the CISMOA or BECA.

PS. why are you not on Twitter

Anonymous said...

I don't understand the policy of the Indian government. They are paying all the money for high tech military gadgets and yet are not getting them as they have not signed the CISMOA, BECA, LSA. Then either they should stop buying from US or they should sign those agreements. We have already stooped down before the US by signing the Nuclear Deal where we unofficially agreed not to carry out any more nuclear tests, not to build any more military nuclear reactors, not to increase our nuclear weapon stockpile as going otherwise would lead to invalidation of the deal by the American side. We are also in the process passing the nuclear liability bill in the Parliament. The US though has still not reciprocated by removing our defense R&D institutions from its blacklist, nor has it agreed to share sensitive nuclear reprocessing technology with India. The US has also categorically stated that it does not have any intention of accepting India as a nuclear weapons state as mentioned in the NPT quite contrary to what was being propagated here in India, rather has stated it will continue to motivate India into signing the CBT and the NPT(as a non nuclear weapons country). We have stooped down even further by signing the EUMA, where even after buying the weapons at legitimate prices we cannot do whatever we want to do with them and the US has the right to physically inspect them. So why shy away from these new agreements, at least taxpayers' hard earned money would not be wasted. Or is it that even such downgraded American weapons are far better than what the Russians or the Europeans can offer?

Anonymous said...

It might be a simplistic view of things, but to me it looks like signing the deal first and looking at the fine print later.

Anyway, with zero chance of India initiating a conflict with either China or Pakistan no matter what the provocation, and Pakistan being happy to let its proxies bleed India, and China looking to solidify its economic growth, its unlikely that any of these weapons will be used in anger.

So more than military or strategic, this issue really is a legal issue, and would be of interest to lawyers and accountants.

ABHINABA said...

In future if Indian Netas sign all those agreement with U.S , India will become a new pet DOG of U.S ; so keep away from such sensitive U.S military hardwares.

Neel said...

Did Pakistan sign this contract with the US?

Then how did Pakistan (allegedly)provide an F-16 to China for reverse engineering?

On a separate topic, how can it be ensured that these systems dont come with Trojan horses? If Indian capabilities wont be able to detect it, it will certainly have to use outside help ( say Israel ) to identify such "bugs". Such an agreement will make that impossible. Thats possibly a reason why its being pushed by them.

AK said...

Why did India buy these hi-tech stuff if we were not ready to sign these safe-guards?

Seems like someone was making a lot of money on these deals. Shri Antony's brain or lack of it gets a raw deal for everything related to defence. Hail Antony.

Anonymous said...

Let me take a step back. In 2002, India purchased the first major US platform-12 AN/TPQ-37 weapon locating radars. Circa 2010, the Army Chief has warned that 2/3rd of the 12 radars are down at any given time due to Raytheon (the manufacturer) support issues. Keep in mind that these radars are not very high end equipment.

Circa 2010, we are being asked to sign end-user agreements and a whole lot of other commitments (CISMOA, BECA)for P-8I & C-130J platforms AFTER going through the FMS (Foreign Military Sales) route. Firstly, do you know what FMS is and how it hits India? FMS is an Indian govt order to the American Govt. The American Govt then assigns the order to any supplier it deems fit. Great scheme, right. Knock Knock!!! Wake up. The price you pay is MUCH MUCH more than those in the free market.

Case in point-the C-130J Super Hercules being purchased. Wikipedia gives the C-130J 2008 (year in which India placed the order) Flyaway cost at $62 Million. Further proof of cost:Canada signed a 16 C-130J deal for $1.4 Billion in 2008. India bought 6 C-130J for $1.059 Billion in 2008. Why did India buy the same aircraft at more than double the price? And please do not tell me that Indian C-130J's are better equipped. Canadian C-130J's are much more highly equipped. Btw-to put this into perspective, India paid the price of a C-17 ( a 4 jet 70 Ton heavy transport aircraft @$ 200M/aircraft) for a C-130J ( a 4 propeller 12-15 Ton aircraft which the rest of the world buys at $60-70M but India buys @$190M). Ajai Ji-Your comments on this purchase and whether you feel India should have bought the C-130J at a C-17 price?

And what happens when we face the AN/TPQ 37 issues after paying Maruti Swift price for a Maruti 800? Here's the best part-India cannot hold anyone to account (see the An/TPQ-37 public domain announcement by the Army chief). India can at best ask the US Government to provide spares/services, which the US Govt would pass on to the vendor (Boeing) and we can buy services/spares at a "fill-in-the blank" price. Who fills in the blank? Boeing/Raytheon. India can "protest" that the price is very high, but then, what good has Indian "protests" come to historically is left to your judgement.

Great, isn't it!!!! No, things are not that gray, you sign all papers and you get "co-operation". Stuff gets serviced at low rates and promptly. Kind of like what Canada, Britain & Australia get today.

Oh yes-I almost forgot the P-8I, Cost to India-$220 M/aircraft for a total of $2.1 B for 8 aircraft. Cost to US is approx $150M/aircraft (Check up the wikipedia & search on google). And the icing on the cake (this is not 100% confirmed as of now, though) Indian aircraft won't come with MAD (Magentic Anomaly Detector) that the US planes would come with. It would be a "scaled-down" version of the US version.

Russian problems like delays in technology transfer (T-90), quality issues (Mig 21 spares) and faulty cost estimations (Gorshkov) probably sound sweeter now.

It happens only in India!!! Long live greased palms and public sector inefficiency to come up with any weapons platforms!!!!

Tats

Ra said...

Instead of signing such agreements with anyone, India should be in a position either to go for indigenous R&D or go for Tejas/FGFA type of cooperative developments.

Humbum said...

Just sign it. We know you want it. Just sing it.

Brownian Motion said...

I'm not sure I understand fully. How do we know that the downgraded equipment that the P8I will now come with doesn't have Trojans or other shady spyware stuff on it?

@ Joydeep ghosh - are you serious that S. Korea doesn't have hostile countries around?

Exactly what are India's reservations with these agreements? Shuklaji, your article doesn't actually make that clear...

Brownian Motion said...

Shuklaji, what exactly are India's reservations with the agreements? What specific clauses? How have others dealt with it? Is it uniform for everyone? Your article doesn't make this very clear ...

What guarantees that the downgraded equipment currently being supplied (on the P8I say) doesn't have Trojans or other spy stuff on it already?

Richin said...

Dear Ajay,

Was wondering if the Indian government has clearly stated the clauses that are not in line with our expectations?

Personal opinion: In a way, this openness of the US (about clarifying sensitive issues before finalizing deals) is something I appreciate and it is rather evident even in business deals with Americans whereby suppliers and procurement folks always like to “clarify” deliverables before proceeding.

However, I foresee frustration and friction between US and us thanks to the differing negotiation styles (since culturally, we tend not to bring up sensitive issues, considering it impolite to offend partners) however, in business, from the little experience I have had, I believe it is best to have as much clarity and transparency as possible before signing on the dotted line

joydeep ghosh said...

Anonymous 22:55

I salute you, but pls can you pt these words in the ears of North Block

joydeep ghosh said...

@anonymous 22.55

By the Way, do you have any problem if I call you Tathagat

Though you are right about the MAD on P8I as well as 12 AN/TPQ-37, but
you said

'India bought 6 C-130J for $1.059 Billion in 2008.'

its actually $962 million though still very high price

@ Ajai sir

can you pls clarify on this price difference, between Indian, US and Canadian planes

Anonymous said...

As far as I know the LSA is to give logistics support to the US military. The CISMOA is to promote interoperatbility and communications at a tactical level with the US systems.

Since India neither is going to support US campaigns in theaters close to India or is it going to fight alongside the US, why should be sign these arrangements and give signals to the contrary to our friends and foes alike ?

Anonymous said...

Another great argument in favor of greater efforts towards indigenous product development and manufacturing.

Or at the very least, an argument in favor of staying far away from US equipment. First you pay a kings ransom in dollars to get these items, then you pay a prince's ransom in self respect to keep these functioning, then you devote half of your manpower to make sure that the electronics are not happily transmitting all of your data to friendly american receivers.

This should be a good wakeup call for everybody in power who make indigenous products jump through a thousand hoops before finally rejecting the system as being not capable as a F-22.

You have to learn to walk before you can sprint. Unfortunately the argument being used is, "no point reinventing the wheel". Well walking and running aren't exactly the latest and greatest human achievement, people have been walking and running since at least a million years, but everyone still has to learn walking and then graduate to running. Nobody says, "no use learning to walk, its been done before".

We aim to be an "Aerospace Power", a "Blue Water Navy", a "Super Power" etc etc. Now how many Super Power status countries have gotten there with imported weapons and fascination with brochures?

Rafale said...

Saw a report by Shiv Aroor on HT.
that the Army chief had questioned
the logic of buying weapons from the USA . it also highlighted that some radars bought from Raytheon are not functioning due to lack of maintenance support by that company.

sandeep said...

Ajai Sir ! heard nothing regarding LCH on your blog

Chada Singh said...

I don't know but i think its better for india to do what paks do. Look at them they are getting 8/9 P-3C (completely refurbished...almost new), with the latest gadgets all for 900 million. Money seems to have gone to the heads of indians.

Is there any point in spending money on these systems anyway? Russia has been very good to india but indians give it no loylaty and are now looking for new masters....but these new masters prefer to treat you as third class.

NJS said...

Really a good point ajai,
india know US will not supply key technologies without signing in these agreements,india is becoming MR.Late in each and every thing to take decisions . making every thing late is not a proudable one .

Broadsword said...

Sandeep:

I had done the story a couple of months ago, when the first flight had taken place. Go back and read it in the archives.

This flight was not the first flight... it was the 20th or so! This was the "tamasha" inauguration.

General Point regarding India paying more for systems:

I'm afraid you can't compare a deal that the Canadians do with another that India does for the C-130J. The cost of the platform, typically, is just 50% of the deal cost. Then there are simulator facilities, spares backups, initial training costs, in-service support, spares inventories, etc etc etc.

Plz compare apples with apples, not with oranges.

The question of Trojans:

Of course, theoretically, one could have a Trojan in any system. But I think that any foreign company would be VERY careful about putting a Trojan into any system that India is buying. We have good ways of detecting Trojans and, if a Trojan is ever detected in an Indian platform, that is the end of the Indian arms relationship.

You want to risk that?

Unknown Soldier said...

Manohar Thyagaraj, explanation that CISMOA and BECA is “common for all countries that receive US high technology and are not unique to India” is partially correct. It is only applicable to those countries that are under the US security and nuclear umbrella i.e. about 30 odd countries as of now.
In addition, there are countries like Pakistan which is a MNNA ( Major Non NATO Ally). It gives USA the same rights over Pakistan as it has with countries under the American military umbrella. These special rights that USA enjoys is because it is responsible for their security and thus enforces its own obligations and those of its allies through such agreements.
However India is not under the security umbrella of the US. It is a strategic partner. Thus it is under no obligation to follow whatever the US demands. A strategic partnership is built on the principle of equality. Thus, a strategic partner is to be treated as an equal, at least on paper.
Signing of the CISMOA and EUA is discriminatory. Why should our radio sets interoperate with US equipments and why should we manage our frequency spectrum as dictated by the US? The US can have the best encryption devices under the sun but our SAG will not be impressed. What we do with the equipment for which we have paid the full price is our business. The right of ownership has to be transferred in full. It will be humiliating to allow US personal to inspect our equipment at our military bases.
If the US delivers the P8I without crucial electronics for what ever reasons it may have than India should pay a lot less than the full version price.

Ravi said...

Its is extremely frustrating to see where we lie in terms of defence capabilities. So how many more years of suffering this indignity to be on mercy of others for systems that we can use to defend ourselves and deter others?

Sachin Khandelwal said...

Hmm.. This is indeed an interesting “introductory” article. It was always along the lines one fears in trying to be “ally” of US: one may just land up becoming a “slave” because if in time of crisis the US strategic community decides that India should not be aggressive it simply has to sabotage the “high tech” equipment by jamming it. There have a few press reports of such occurances in the past. Unfortunately the devil always lies in the details. So if one was thinking of shopping in the US supermarket to become a major power.. think again.. one may just land up becoming a US surrogate ,for eg. Look at the strategic disaster lollipop PM has done in with respect to our reaction (or rather a complete lack of it) to 26/11, angering Iran, projecting Pakistan as a must-become friend (“or else we cannot become a major power”), slack modernisation process, lack of R&D (its allowance is much below required to be a major power), and most importantly complete lack of strategic thinking or what should I say attitude”. Returning to the immediate context of signing the confidentiality agreement, surely your article is only an introduction to the issue. I think this issue needs to be spelt out in a very detailed manner to bring out the merits of signing vs. the pitfalls.

Anonymous said...

Ajai Ji,
US will assuredly put a Trojan Horse and Indians will not be able to detect them. That is a certainty. They will put them in areas that are inaccessible. Another thing, I am not too sure the Canadians when purchasing C-17's and other Boeing aircrafts do not opt for training, spare parts, etc. I honestly believe that these prices are high and unique to India.
The comments of all authors are extremely interesting. There are very few that mention the gradual stranglehold that the US is exercising - similar to a vassal state without the privileges of an ally.
The impact of these patterns of business and related politics should be clear to all and sundry. USA is not anymore the land of its Bill of Rights and founding constitution but those that are willing to pick any reason for creating conflict and keep the world busy.
These very agreements can be used to effectively create tensions leading to wars on pretexts of non-compliance.
The more agreements we sign the more vulnerable we become as a nation.
Plz do not take it as trivial.
I hope you print what I write.

Anonymous said...

There are three misleading specious sophist arguments here.
(1) These aircrafts are loaded with sensitive technologies that no other nation possesses.
(2) These agreements are signed by everyone and the technologies shared by the US. What is the status of those nations that share? Are they NATO allies/states with US bases/vassal states.
(3) There is nothing in these agreements that may be construed suspicious or dangerous for India - it is all above board and upfront.
How far it is from the truth and actuality remains to be seen.
Time will tell.
And that does not mean a "Yea" for the agreements - On the contrary it means a resounding "Nay".

Anonymous said...

@joydeep ghosh

Thanks for your salute. As long as no action is being performed here, may i suggest none of us deserve one.

Regarding price-Rest assured that $1.059 Billion is the exact amount being forked out by India for the 6 C-130J's. I would not have given you the number if i was not 100% sure.

@Ajai Ji-I agree that unit costs typically are 50% of the platform costs. The math still does not work out. Here's why

6 C-130J's @62 M= 370M
10 Year support @37M/year=370M

Adding this up we get 740M and we are paying 1059M, a difference of 319 M. And does anyone in the world pay a 10 year servicing cost up-front with the aircraft? NO.

I do not agree that the aircraft for Canada would cost less than Indian aircraft. The set-up costs would differ, but what exactly are we talking about the set-up here. Simulators-IAF is not gonna buy simulators for operating a 4 propeller transport plane. Any IAF pilot can second me here. Infrastructure, yes. But are we talking air-conditioned hangars here? Haha. No. We are probably talking about 2-3 hangars and related minimal set-up at Ghaziabad. We are not planning to assemble/manufacture the plane here. Training-yes, probably 2 sets (6+6) of IAF transport pilots would be trained by Lockheed for month or two-Would that be very expensive-No, as long as IAF isn't sending rookie pilots over. You would need to buy tooling and perishables (spares). A turbo-shaft engine isn't difficult (or complicated) to service. Minimal costs all the way.

P.S: Let me state here that a typical "steady state" aircraft (Steady state denotes an aircraft which has typically more than 500+ examples throughout the globe and is being produced currently) costs less than 10% of its cost price to maintain each year IF THE MAINTENANCE IS TOTALLY OUTSOURCED TO THE MANUFACTURER. Which is not the case given the extensive aircraft manitenance capability IAF has. We would at most, be buying spares and performing all maintenance ourselves.

Another data point: UAE Air Force bought 12 C-130J's in late 2009 for $1.3 Billion. Now, UAE is also a first time customer for the C-130J and they approx paid HALF of what India paid a year later (assuming a 6% y-o-y price escalation for the C-130J). And UAE typically signs full aircraft maintenance deals with the aircraft manufacturer.

Who the heck cares right? As long as the working Indian slugs his you-know-what to pay taxes which are then mis-appropiated by the politicians and middlemen.

As i said before- It happens only in India!!! Long live greased palms and public sector inefficiency to come up with any weapons platforms!!!!

Tats

Anonymous said...

It is NOT a buyer's job to study seller's laws, regulations and treaties ESPECIALLY when the platforms involved are MERE tactical equipment.

It is the supplier's job to be aware of and EXPLICITLY STATE their OWN country's laws, permissions and pre-requisite agreements required before hawking their wares.

India agreed to buy the platforms for n-deal but NOT to be forced into signing away its sovereignity disguised into treaties(CISMOA, EUM.....). If they can't sell without CISMOA then should quote price minus cost of cismoa-covered-equipment OR we can reject to buy those platforms altogether.

Agreed that these sovereignity-surrendering treaties like cismoa were not specifically designed for india but who says they only want to tie our hands only but not of other nations too ????

Eminenz said...

While Cyber Security and Information Security (CS and IS) is all set to be introduced as a subject in higher and secondary education in the country, the government plans to hire around 5,000 information security experts who would impart training to create a larger dependable force of cyber experts across the country, top Government sources said.