Learn from way Pak, China handled US

THE heavy lifting for Prime Minister Modi’s visit to Washington has already been done. The state visit will be a largely ceremonial event that will put its stamp on decisions already taken after considerable legwork.

If India wants to take advantage of licence-production scheme, it must work on ways by which technology can be absorbed.

Among these decisions are the agreement on licence-producing the General Electric F414 turbofan jet engine, the purchase of 31 General Atomics MQ-9 armed drones, the inaugural INDUS-X dialogue involving both governments and industry to put in place an ambitious defence co-development and co-production process. There will, no doubt, be decisions on sensitive issues that are unlikely to emerge in the public domain.

At the heart of it all is the US-India Initiative on Critical and Emerging Technologies (iCET) finalised by National Security Adviser Ajit Doval and his US counterpart Jake Sullivan on January 31 in Washington DC. Its grand aim is to intertwine US and India’s security, technology and trade relationship into a strategic global partnership. Defence technologies here will only be the icing on the larger Indo-US cake.

In the 1950s and 1960s, the US helped modernise Indian agricultural and engineering education and introduced the study of management. India benefited from the Green Revolution, but to this day, vast numbers of engineers and doctors from premier US-shaped institutions migrate to America.

Most of the efforts to get US technology in the 1980s floundered over restrictions relating to India’s nuclear and missile programmes. An ambitious effort to have the US to assist India in making the LCA Tejas was cancelled after the nuclear tests of 1998.

Another attempt was made in 2012 through the Defence Technology and Trade Initiative (DTTI) to promote co-development. But the initiative took up either low-end products, which floundered, or ambitious high-end stuff, like co-developing jet engines and acquiring aircraft carrier technology, that never took off. All this was done despite visible efforts of the US to accommodate India by designating it a ‘Major Defence Partner’ and then granting it the Strategic Trade Authorisation Tier-1 (STA-1) status to ease transfer of dual-use technology.

So, we now come to an even more ambitious phase where India has put all its eggs in the US basket by deciding to produce the GE F414 turbofan engine for the LCA Mk2 and the AMCA, which are at the design or prototype stage.

GE is unlikely to transfer its key technologies and Congress will have its own views on the process. As it is, at present, India lacks the R&D base through which it could absorb the technologies effectively. It may be simpler to buy the engine off the shelf, as licence production could raise the costs per engine five or six times.

Licence-manufactured Su-30MKI cost Rs 100-150 crore more than the imported ones. And we got little by way of technology from Russia for the 272 Sukhois that we have assembled in India. Recall, too, that in 2014, Dassault refused to provide warranties for the Rafale aircraft made by HAL.

As the global technology leader, the US is understandably very cautious in exporting its technologies. Ask the Australians, who are getting to understand US export controls, such as the International Traffic in Arms Regulations (ITAR). This covers virtually all advanced defence- or security-related technology in ‘defence articles’, ‘technical data’ and ‘defence services’ coming out of the US. According to a study, the ITAR ‘disincentivises cross-border research and development’ even between the US and its allies and the only country to get preferential treatment under the ITAR is Canada. The “small yard with high fences” is as much applicable to China as it is to, say, Germany, the UK, China and India.

There is no problem if India goes into this with its eyes open. But references to ‘100 per cent technology transfer’ are misleading. India would be advised to keep on working on its own engine projects and if it wants to take advantage of licence-production arrangements, it needs to work on ways through which technology can be absorbed. This is not something that can happen overnight, but requires systematic and hard efforts.

The problem is systemic. India is unwilling to spend money on R&D. Its expenditure currently amounts to just about 0.7 per cent of its GDP, whereas the US spends 2.9 per cent and China 2.1 per cent. One reason for this is that the Indian corporate sector is reluctant to spend money on R&D, unlike other countries where the corporates take the lead. The current Indo-US effort seems to understand this and is, therefore, seeking to march lockstep with the Indian and American private sectors from the outset.

Here, it is also important to understand the context of the current US outlook. Despite its enormous military and economic capacities, there is a certain lack of American self-confidence with regards to China. Washington is circling the wagons with its allies and technologies even as it seeks to work out a new modus vivendi with China.

We are bound to face the pressure of “if you are not with us, you are against us” kind of thinking in the US. This will not only involve pressure to follow Washington’s lead on policy issues but also promote what is called ‘interoperability’ in the military.

At the end of the day, New Delhi has to understand that just as it is pushing India’s interests, Washington will secure American interests. And at this time, the US considers itself in a war of sorts with China. Given the asymmetry, the US is the weightier party as compared to India. This may not be an issue if we could take lessons from the way Pakistan and China handled the US. Hopefully, the Modi team has a similar strategy in mind.