US-India Defence Cooperation: Constraints, opportunities, and solutions

With Prime Minister (PM) Narendra Modi on the cusp of making his first formal state visit to the United States (US), Washington and New Delhi are likely to embark on an ambitious journey to forge a comprehensive defence relationship. This visit is likely to witness the signing of at least two major defence agreements—the transfer of the General Electric (GE)-built F414 jet engine technology to power the Hindustan Aeronautical Limited (HAL)’ Light Combat Aircraft or Tejas Mk-2 fighter jets. Apart from the jet engine deal, India’s Defence Acquisition Council (DAC)’ issued a clearance to buy 31 MQ-9B armed drones manufactured by General Atomics (GA) for all three Indian armed services. These two big-ticket contracts will be the immediate concrete takeaways from Prime Minister and US President Joe Biden’s summit meeting. However, the devil is in the detail, with reports indicating that the US could transfer as much as 80 percent of GE’s jet engine technology by value. Eleven key technologies associated with the F414 are likely to be transferred. If true, this development is an incredible milestone in US-India defence relations. The other positive development is India’s eventual purchase of 31 MQ-9B Unmanned Aerial Vehicles (UAVs). An earlier decision by the Ministry of Defence (MoD) to restrict India’s contract to only 18 drones would have driven up the unit price of each piece, rendering it less viable than the current buy of 31 drones pegged at US$3 billion. In addition, to these potential big-ticket announcements following the summit, there could be more agreements signed. The US Defence Secretary Lloyd Austin who was in New Delhi earlier this month in the run-up to Modi’s state visit did reach at least a tentative agreement with his counterpart Defence Minister Rajnath Singh on supply chains, a roadmap for deeper US-India defence industrial cooperation, a “Security of Supply Arrangement” and a “Reciprocal Defence Procurement Arrangement”.

An earlier decision by the Ministry of Defence (MoD) to restrict India’s contract to only 18 drones would have driven up the unit price of each piece, rendering it less viable than the current buy of 31 drones pegged at US$3 billion.

Nothing, however, is certain until the fine print is carefully evaluated in any agreement. Indeed, Minister of External Affairs S. Jaishankar downplayed exaggerated expectations or excessive optimism observing: “We will have to wait and see specifically what we are able to close out by the time the Prime Minister arrives”.

Constraints

Although defence cooperation has assumed a level of centrality in US-India defence ties, there are some constraints that extend beyond the substantive gains that are predicted to crystallise during PM Modi’s visit to the US. The foremost from an Indian standpoint are resources that New Delhi can expend in purchasing American military equipment and hardware in the future. Hard currency is scarce and finite and India’s democratically elected civilian leaders whether led by the current Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) government or its successor Indian National Congress (INC) led United Progressive Alliance (UPA) are unlikely to spend more on defence to meet the expectations of the American policymakers and defence corporates. A whole range of domestic priorities which both present and future governments believe are necessary for them to deliver in the form of public goods and secure their electoral fortunes, will likely fetter or at least place objective limits on the resources they can spend on purchasing American weaponry.

Opportunity and solution

A potential solution to meet some of Washington’s expectations that New Delhi will buy more American military equipment, which has already been proposed during US-India Track-2 and Track-1.5 engagements, is to source more defence hardware by implementing an arrangement along the lines of the Lend-Lease Act (LLA) that the US instituted during World War II to militarily aid its allies such as the United Kingdom and the erstwhile Soviet Union (SU), which could not pay Washington in hard currency for the military supplies it provided. An LLA-like arrangement would require that India make non-cash payments. This could come in the form of India giving access to select Indian bases to American warships and refuelling and logistics support for US military aircraft. Additionally, India could provide Maintenance, Repair and Overhaul (MRO) access, which Defence Minister Rajnath Singh urged his counterpart DS Austin during the latter’s visit to New Delhi to prioritise for India to become a major military logistics hub that meets the requirements of not just the Indian armed forces, but equally the US military. India can service and replenish American naval vessels free of cost to cover the costs incurred by India for procuring US-origin weaponry. Nevertheless, an LLA-like agreement would require the US to be concessional to the extent that the payment might not be made in full, but meet only 75-80 percent of the cost of American weaponry or military hardware supplied to India. To be sure, the original LLA ended up being far more generous to America’s allies in that it turned out to become a “gift”, New Delhi should be aware, it can expect no such generosity from Washington.

India can service and replenish American naval vessels free of cost to cover the costs incurred by India for procuring US-origin weaponry.

Assuming an LLA-like arrangement is not satisfactory because it might end up giving the US leadership far too much discretion in waiving the dues of the recipient or beneficiary state such as India, a hybrid model can be worked out by which India could make partial payments in hard currency and repay the remainder or balance by way of providing the US military free MRO, refuelling, replenishment and access to select Indian naval bases and facilities. This arrangement for the US military can also be extended to the Indian Air Force (IAF) and Indian Army (IA) run facilities. The visit of Modi to Washington D.C., which is now underway, promises to be a harbinger of a major transformation in US-India defence ties. Even if New Delhi’s expectations are only partially met from the visit, it would go a long way in consolidating the defence relationship between the world’s two largest democracies.

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Kartik Bommakanti is a Senior Fellow with the Strategic Studies Programme at the Observers Research Foundation

• International Affairs
• Defence and Security
• India
• USA and Canada
• Defence agreements
• F414 jet engine technology
• Military aid
• Modi's visit
• MQ-9B armed drones
• Supply chains
• US-India

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