America’s Indian Rebuff

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America’s Indian Rebuff

India’s decision not to buy the F/A-18 or F-16 is a big blow to the United States. Will it hurt broader ties?

It’s surprising and hurtful when your new best friend turns round and pokes you in the eye. But that’s essentially what India has just done to the United States, with a major arms deal the source of the affront.

Remember this was meant to be the strategic partnership with an air of historic inevitability about it: India and the United States, the world’s two biggest democracies, linking arms to help manage the rise of China, a country seen more as a rival than a partner in both Washington and New Delhi.

The relationship had been on the up and up until, at the end of April, India delivered a surprising snub. Neither Boeing nor Lockheed Martin, the two US defence primes bidding for a lucrative Indian Air Force (IAF) contract, had even made it onto the selectors’ shortlist, the Indian government announced, with France’s Dassault and the European EADS consortium winning through at their expense.

For the United States it was a double-whammy: both a commercial and a strategic reverse. The deal is for 126 fighter jets worth $11 billion, and, as the biggest defence export tender currently open anywhere, it was a painful one to watch slip away. Perhaps more importantly, India, through its decision, placed a value on its strategic partnership with the United States, and that value, we now know, isn’t so high as to give the US a leg-up in this kind of open contest. 

The United States wasn’t anticipating failure. President Barack Obama visited India in November to lobby on behalf of the US entrants, and India had only recently signed up to buy US-built reconnaissance and transport aircraft, as well as clinching a ground-breaking civil nuclear deal with Washington in 2008. The US ambassador to India, Timothy J. Roemer, made no attempt to hide his country’s ‘deep disappointment’ at India’s choice and promptly resigned, it was widely assumed, in utter dismay.

Why, then, would India elect to burn the fingers of its US partner? The answer is that while it would be naive to suggest that the awarding of major arms contracts isn’t a political decision, it’s certainly a technical decision as well. And technically, Boeing’s F/A-18 Super Hornet or Lockheed Martin’s F-16IN just didn’t light any fires amongst the IAF top brass—an assessment that stunned US analysts, who thought that the Super Hornet, in particular, was a strong contender. ‘There was surprise in India at the extent of the US disappointment,’ says Rahul Roy-Chaudhury, head of the South Asia programme at the International Institute of Strategic Studies. ‘But the Indian mindset was that this deal wasn’t about cementing relationships, it was about getting the best deal. The Indian view is that the Americans should have offered better aircraft.’

The Americans also fell down on technology transfer, an essential concession nowadays when selling defence kit to developing but politically powerful countries like India, and they failed to iron out their prohibitive end user agreements, which the IAF find pretty tiresome to deal with. ‘If the US had really reformed its processes and said to the Indians, “You’re our partners, you’re our equals,” then the F-18 would have had a very strong chance,’ reckons aviation analyst Richard Aboulafia, who is vice president at the Teal Group. ‘That’s the approach the Europeans took—they came and said, “We need you.” I hope this is a rude awakening for (the US defence sector).’ The memory of the United States’ refusal to export critical aircraft parts to India during the 1999 Kargil conflict with Pakistan also still rankles in Indian political-military circles. The new plane is to be India’s front-line fighter, and some Indian decision-makers don’t yet trust the United States enough to buy such a core capability from them.

All the US can do, Aboulafia says, is take this defeat on the chin. India still has tens of billions to spend on upgrading its military and it remains an indispensible strategic partner. For its part, New Delhi has made a clear statement that it can be a US ally, but never a client.