The Sukhoi deal and after

INDIA AND RUSSIA have finally signed the deal for both purchase and manufacture under licence in India of Sukhoi-30 MKI fighter jets. One of the costliest defence deals, the Sukhoi fighters already raised a controversy when a previous agreement was signed in 1996. The question raised even then was - does the Indian Air Force (IAF) need these fighters? It was certainly not the first on its priority, as the Advanced Jet Trainers (AJTs) were. But the then Government went ahead and clinched the deal with Russia and the present regime has expanded and deepened the Indo-Russian collaboration on this front. Apart from the outright purchase of a fleet, India has contracted for the licensed production of about 140 Sukhoi-30 aircraft by the public sector Hindustan Aeronautics Ltd. (HAL). The whole deal is worth about $3 billion, to be spent over the next 15 years or so. As a result, the Sukhoi will be the IAF's mainstay for the next two decades and more. Is it the right decision? Was there a choice? Only the IAF can answer, though it is bound to argue that the failure of the HAL to come out with the LCA gave it little choice.

This deal raises several issues. Even during the 1996 agreement, there was speculation of the involvement of middlemen. Of course, the Defence Minister, Mr. George Fernandes, has asked the Central Vigilance Commissioner to look at all the defence deals struck in the past 15 years - starting from the Bofors days. So, the CVC is likely to scrutinise all these deals and come up with his findings. This is something that needs to be sorted out one way or another. The second question relates to the sale of the same Sukhoi aircraft to China. Moscow has argued that they are not the same and that the fighters to be supplied to India will be upgraded versions, with greater sophistication. There were also complaints of the use of secondhand equipment in the initial supply of Sukhoi fighters following the 1996 agreement. This must be clarified by the Defence Ministry. A third question relates to whether Sukhoi-30 MKI is really the multi-role aircraft/fighter that the IAF needs. When the Government decides to go in for such a major purchase and production programme, it has to be fully justified.

An equally debatable issue is whether India should go in for licensed production of the fighters by the HAL, when it cannot sell them to a third country. While going in for a $3-billion deal, India should have bargained for either exports or at least supply of some components and equipment to Russia for the production of this version. If the HAL is going to produce just 140 or 150 aircraft for the IAF, what will be the economy of scale? This has always been the problem with both the HAL and the Russian deals. Without an advantageous economy of scale in production or a collaborative arrangement with Russia, what will be the return on the huge investment in the production facilities at the HAL. It can only add to the overheads and make the HAL a white elephant the country can ill-afford. The foreign policy of the country also prohibits the sale of defence items to some countries, which remain the main potential buyers. It is time for the Centre to revise its industrial policy and open up some areas of defence production to the private sector. Perhaps a private partner could have secured a better deal from Russia even for the Sukhoi fighters. Again, a disturbing element is the over- dependence on Russia or sourcing of defence equipment from it. The comforting feature of the deal, however, is that the Centre has dramatically stepped up investment in the defence sector. It must soon clinch the AJT deal with Britain. But the sudden spurt in defence spending has also sparked fears of a renewed arms race in the subcontinent.

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Section  : Opinion
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