US Arms Export Agreements a Sticking Point for India
now INS Jalashwa
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Rumors are flying that India is set to sign a $2.2 billion deal with Boeing for 8 P-8I maritime patrol aircraft, and American companies are competing like never before in critical defense competitions like the $10+ billion medium multi-role fighter bid. The process of working through foreign defense sales is far more complex than simply winning competitions, or even establishing an industrial network within your target market. In societies with accountable governments, the arms trade comes under a number of key regulations, and government to government agreements that lay out key terms are critical in order to lay the framework for industrial cooperation and sales.
One aspect of arms sales regulations that’s quite common at present is restrictions on what a country may do with the equipment it buys. Prohibitions on second-hand sales without approval of the exporting country are routine inclusions, even by regimes that have no political compunctions about selling weapons to anyone. After all, as tech firms like Cisco and Sun found out during the dot-com crash, having your high-end hardware sold on eBay does terrible things to the bottom line. Many accountable governments have also been pushed into offering a second kind of restriction, however: restrictions on what the purchasing country can do with the equipment, even within its own borders. Any machine needs maintenance, which provides sufficient leverage to ensure cooperation. Even so, many countries like Indonesia and Chad are becoming restive. As international equipment options continue to broaden, some countries like Indonesia are even switching suppliers to ensure non-interference.
Indian Navy chief Admiral Sureesh Mehta recently expressed similar sentiments with respect to side agreements the USA is requesting, and whose absence is slowing down the growing military relationship between the 2 countries…
The agreements in question are the Mutual Logistic Support Agreement (MLSA), the Communications Interoperability and Security Memorandum of Agreement (CIS MoA) and the End Use Monitoring Agreement (EUMA). All contain restrictive clauses, but the EUMA appears to be most controversial.
India’s Comptroller and Auditor General (CAG) tabled a parliamentary report in March 2008 that criticized the LPD-14 Trenton/ INS Jalashwa “hot transfer”, for instance, despite the deal’s rock-bottom cost of under $40 million for an amphibious transport and landing ship whose capability is critical to India’s military and disaster-relief posture.
“Restrictive clauses raise doubts about the real advantages from this deal… For example, (there are) restrictions on the offensive deployment of the ship and permission to the (US) government to conduct an inspection and inventory of all articles transferred under the end-use monitoring clause of the LOA (Letter of Offer and Acceptance issued by the US government).”
An NDTV report quoted Mehta as saying that INS Jalashwa had no restrictions on deployment, but the navy chief took a firm position against any other deal or agreement that might impose such restrictions:
“The US may have this kind of (end user) agreements with everyone. I don’t believe in that. We pay for something and we get some technology. What I do with it, is my thing.”
Given the strategic focus the USA has placed on relations with India, and the scope of the opportunity, diplomacy and negotiations are underway to iron out these disagreements in a manner acceptable to both parties. An unidentified Indian official told NDTV that:
“[The Americans] are prepared to meet us more than halfway to address our concerns. There is no hard line on this. Perhaps we can give them guarantees or access to records [instead on on-site inspections]. We have sent a draft to the US and our embassy in Washington will now take the process forward.”
