Saturday, December 17, 2011

A Rocky Russia-India Defense Union...upgraded Sukhoi-30 MKI aircraft deal...

A Rocky Russia-India Defense Union...upgraded Sukhoi-30 MKI aircraft deal...

India replacing China as the world’s largest arms importer should leave plenty of scope for Russian manufacturers. But the two sides don’t always see eye to eye....

With India replacing China as the world’s leading arms importer, Russian defense companies are increasingly counting on additional weapons sales to India to compensate for the precipitous decline in exports to China.

Until now, Soviet and Russian suppliers have provided about two-thirds of India’s military imports. Yet although Russia should remain India’s largest defense partner for at least the next several years given that the two countries have already signed billions of dollars’ worth of future arms deals, growing competition from Western companies and the increasing sophistication of India’s indigenous defense industry could lead New Delhi to buy fewer Russian weapons.

The Indian government has for years been seeking to increase the capacity of its defense firms to manufacture more sophisticated products on their own. As part of this process, Indian officials have successfully required Russian and other foreign firms to rely less on the sale of complete turn-key systems and instead consent to engage in the joint research, development, and manufacture of new defense technologies and systems. Indian negotiators often require that new contracts stipulate a significant transfer of defense technologies, and they also regularly insist that foreign governments agree to allow Indian firms to have a role in producing (under license), maintaining, and repairing the weapons.

One of the most prominent Russian-era Indian defense deals occurred in 1998, when the two countries established the Russian-Indian joint venture BrahMos Aerospace to co-develop and produce supersonic tactical cruise missiles. The BrahMos missiles incorporate advanced Russian technologies, which Moscow hasn’t made available to China or any other country, but are built in India. In June 2007, Indian ground forces began deploying BrahMos-1 missiles on a Tatra truck chassis. BrahMos Aerospace, meanwhile, is currently testing a naval variant, the BrahMos-2. Air- and submarine-launched versions of the missile are also currently under development.

But the two governments have in recent years reached other important arms deals, and have established a joint venture to research and develop a medium-lift transport aircraft for both their air forces. HAL and Russia’s United Aircraft Cooperation (UAC), a state holding company for Russia’s military and civilian aircraft producers that includes the Sukhoi and MiG corporations, will both invest $300 million in the joint effort to create a plane that can carry 18.5 tons of cargo up to 2,500 kilometers. They aim to manufacture their first all-weather medium transport prototype by 2017. The Russian Air Force intends to buy as many as 100 of the new planes to replace its Il-214. The Indian Air Force, for its part, expects to purchase at least 35 of the new aircraft, which will replace India’s aging fleet of AN-32 planes, which Russia is upgrading under a separate contract worth almost $400 million.

Yet despite such co-operation, the Russian-Indian arms relationship has experienced recurring problems, especially Indian criticism regarding the inferior quality of some imported Russian weapons. The most notorious bilateral defense snafu involved the Russia-Indian deal to renovate the Soviet-era Admiral Gorshkov and transfer it to the Indian Navy. After the fall of the Soviet Union, this former Soviet aircraft carrier, built in 1978, was berthed at the Sevmash shipyard in northern Russia while Russian officials debated what to do with the ship. The impoverished Russian government didn’t have sufficient funds to repair and upgrade the vessel.

In January 2004, the Indian government negotiated a comprehensive contract with Russia’s state-run arms exporter Rosoboronexport under which the Indian Navy agreed to purchase the carrier along with a complement of warplanes for the ship for $1.5 billion. In effect, the Indians received the hull of the 44,500-ton ship almost for free (priced as scrap metal) in return for purchasing from Russia new planes and helicopters for the carrier and for funding the ship’s repair and re-equipping at Sevmash, which was then thought to cost nearly $1 billion. The Russian government committed to train the ship’s Indian crew, provide logistics support, supply any new infrastructure required by the carrier’s new home port, and deliver various technical documents about how to operate and maintain the vessel.

However, it turned out that the Sevmash shipyard couldn’t meet the terms of the original contract, which stipulated delivery in August 2008. Most Russian analysts soon concluded that the original terms were unrealistic in light of the difficulty of the task and the underfinanced state of the Russian shipbuilding industry, which had been starved of funds during the Yeltsin and early Putin periods and had proved unable to attract many foreign orders or substantial foreign investment. Another complication was that the Soviet Union had built its aircraft carriers in Ukraine, but Russian defense firms lost access to these shipyards when the Soviet Union dissolved in 1991.

After months of hard bargaining, Russia and India renegotiated the terms of the contract. When Russian Prime Minister Vladimir Putin visited New Delhi in March 2010, the two governments established the new price for the carrier project and its complement of warplanes estimated at about $2.34 billion. The Russian Navy will conduct 18 months of sea trials with the carrier before transferring the ship to the Indian Navy by the end of 2012. The delivery date could of course slip further, and there are uncertainties whether all the 45 MiG-29K/KUBs intended for the carriers will be ready by then. The Indian pilots, meanwhile, are training to fly the MiG-29K by practicing take-offs and landings from Russia’s Admiral Kuznetsov, a “heavy aircraft carrying cruiser” whose small number of planes deny it the functionality of a full aircraft carrier.

Yet despite India’s continuing interest in acquiring the carrier, Russian analysts fear that problems with the ship and other past arms deals will hurt Russia’s ability to compete for new Indian government defense orders. In July 2009, President Dmitry Medvedev described the Gorshkov affair as a “very difficult experience” in the Russian-Indian relations. He warned that: “The ship must be finished. Otherwise there will be serious consequences.” A few weeks later, the Indian government’s Comptroller and Auditor General concluded that India would have been better off buying an entirely new carrier rather than accepting Russia’s “gift” of a free ship. “At best, the Indian navy would be acquiring, belatedly, a second-hand ship with a limited lifespan by paying significantly more than what it would have paid for a new ship,” the auditor office stated in its annual report.

The K-152 Akula-II class “Nerpa” (Chakra) nuclear attack submarine that India is now leasing from Russia for ten years proved equally problematic. Under the lease contract, India provided hundreds of millions of dollars to finish construction of the Nerpa at Amur Shipyard in return for ten years’ use of the ship and Russia’s training of the Indian crew. The Nerpa was scheduled to join the Indian Navy as the INS Chakra in 2008, but production delays along with the accidental release of toxic Freon gas from the ship’s automatic fire suppression system in November 2008, which killed 20 people and injured many more, delayed the transfer until 2010.

Most recently, reports have emerged about India’s problems producing the 1,000 T-90 main battle tanks that New Delhi purchased under license from Russia in 2001 after the indigenous “Arjun” tank ran into production problems. At the time, India also bought 300 of the tanks outright, becoming the first export customer for the T-90s, which have been in service with the Russian Army since the mid-1990s. Indian Minister of State for Defense Pallam Raju has said that India’s indigenous manufacture of the T-90 tanks represented an “important milestone” for India’s attaining military self-sufficiency. As of this month, the factory had manufactured only about 150 of the expected 1,000 T-90 tanks. Indian sources cite Russian impediments in transferring the technology and the Russian-built assemblies needed to build the tanks. Russian sources have denied this claim,and instead speculated that Indians were trying to shift blame away from the failures of some of the Indian sub-contractors to meet their contract obligations.

But such difficulties haven’t stopped Russia, which is determined to keep its largest client, offering India even its most sophisticated military technology while trying to meet Indian demands to transform the bilateral relationship from that of buyer-seller to one based on the joint production and marketing of Russian-Indian weapons to third countries.

As a result, the two countries are engaged in the joint development of a multi-purpose fifth-generation “stealth” fighter. Although the definition of a “fifth-generation” fighter is imprecise, it’s generally agreed to have stealth (low-observable) characteristics, making the aircraft almost invisible to conventional radar. In addition, fifth-generation warplanes possess advanced integrated weapons, avionics, and navigation control systems that use state-of-the-art technology, such as artificial intelligence, to achieve enhanced maneuverability and network centric warfare capabilities.

In October 2007, Sukhoi Corporation, which had been seeking a foreign partner for five years, and India’s state-owned Hindustan Aeronautics Limited (HAL) signed an intergovernmental agreement for the joint development and production of a stealth fighter whose development costs could exceed $10 billion. Thus far, only the United States produces fifth-generation planes.

The Russian and Indian variants of the common aircraft program are being developed with different specifications and timelines to meet the needs of both countries. For example, Russia would like to begin mass producing its T-50 prototype in a few years since it’s designed to compete with the U.S. F-22 and F-35, which are already in service or about to enter service in a few years. In contrast, the Indian government, whose air force already has superiority over Pakistan and perhaps China in South Asia thanks to it Su-30MKIs, is willing to wait until the end of this decade to allow for testing different design elements and components on its variant of the plane before also committing to produce several hundred planes.

Differences have also emerged over the relative work shares of the two countries. In addition to each side naturally wanting a larger share, the Russian parties have been reluctant to allow Indian firms to develop some of the plane’s most modern and sophisticated components. The participation of the Indian side in the project is expected to increase over time. India will contribute about 30 percent of the total project design, including composite components with the stealth function and some avionics, cockpit displays, and electronic warfare systems.

In Russia, the Sukhoi aircraft corporation has already developed and publicly showed off several of its T-50 prototypes that have been produced under this Advanced Front-Line Aviation Complex (PAK FA) project. The T-50 is the first warplane entirely designed and built in the history of the Russian Federation and is supposed to fulfill multiple roles, including that of an air superiority plane and as a tactical bomber.

Although they want a different design, the Indians have followed the T-50 flight tests with interest since they will be using some of its technology and designs in their own plane. In contrast to their defense industrial ties with China, Russian defense analysts worry less about the potential of India’s defense industry to present much competition in third-party markets. Indeed, several recent joint defense research and development projects envisage a Russian-Indian effort to sell their joint products to other countries’ armed forces.

As Manmohan Singh travels to Russia for meetings with Putin and Medvedev, it’s clear that defense ties between the two are not necessarily a defense match made in heaven. Still, as the announcement this week that India has firmed up an order for the purchase of 42 of Russia’s upgraded Sukhoi-30 MKI aircraft shows, the two sides still have plenty of ways they can help each other....

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