Revision as of 20:48, 22 November 2016

Stages of signing a military contract; Graphic courtesy: [From the archives of India Today]

Stages of signing a military contract; Graphic courtesy: [From the archives of India Today]

Purchases for Defence: India

Army chief warns against govt-to-govt deals with US

Josy Joseph

Times of India May 25, 2010

New Delhi: For the first time since India began bigticket defence purchases from the US through gover nment-to-government route, a senior member of the security establishment has red-flagged them, calling attention to the serious pitfalls of it.

In an unusual reflection of Army’s frustration with its past FMS (foreign military sales) purchases from the US, Army chief General V K Singh has written to defence minister A K Antony, cautioning the government about the troubles with FMS.

Over the past few years, the Indian defence establishment has been using the FMS programme of the US government to carry out major defence acquisitions.

In these non-tender purchases, the US government procures the equipment on behalf of the Indian government from its military companies, and takes a commission for the services rendered through Pentagon’s Defense Security Cooperation Agency (DSCA).

The purchase of AN/TPQ-37 firefinder weapon-locating radars for the Army in 2002 was the first major deal that India did with the US under FMS in several decades. Ever since, India has been buying several major defence systems regularly, and the total contract value of US systems bought under the FMS deal runs into several billion dollars.

The Army chief ’s letter of caution comes at a time when the two sides are in the final stages of finalizing two major FMS purchases — one for the Army and the other for the IAF. The Army is proposing to buy 145 ultra light howitzers worth about $647 million, mostly for deployment along the China border, while the IAF is planning to buy 10 C-17 transport aircraft at a cost of over $2.2 billion.

Singed by the troubles with past FMS contracts, the Army top brass is now discussing the possibility of hiring corporate lawyers well versed in international negotiations and contracts to come on board for scrutinizing the upcoming contract for howitzers, authoritative sources said. These lawyers would ensure that the past troubles are kept away, source said.

Gen Singh is believed to have pointed out to Antony Army’s trouble with maintenance of a dozen weaponlocating radars bought from the US firm Raytheon. At times, up to two-thirds of the radars have been in want of maintenance, Army sources said.

Gen Singh’s letter to Antony is an unusual step, and was “forced by the troubles we have with maintenance of the radar systems”, an Army source said.

India has been using the non-tender, FMS route to buy big-ticket defence items from the US since 2002, when the radars became the first items to be bought under the scheme in recent memory. Over the past eight years, the military has carried out a host of acquisitions through the route. Among them were the $2.21 billion purchase of eight Boeing P-8I maritime reconnaissance aircraft, $962 million deal for six C-130J Hercules transport aircraft for IAF and $88 million for USS Trenton and accompanying helicopters for the Navy.

The IAF is currently in the final stages of negotiations for purchase of $2.2 billion worth 10 C-17 aircraft and the Army is finalizing the purchase of howitzers.