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New
Delhi, 04 June 2005
India
on Top
There
is jubilation at Karlskoga in Sweden as the Bofors
group is no longer on India's black list. The
employees are looking to the Bofors Defence (now
owned by United Defence) getting the 155mm gun
contract and supplies of 52 cal, that the Army liked
so much after the Kargil war. The gun has also
cleared the difficult trials for its upgrade. The
Congress will like that too. It was Olaf Palme who
clinched the deal with late Rajiv Gandhi in two
private meetings and the contract was good and the
gun proved to be a worthy buy. HDW too look for a
contract as they are out of the black list for
submarines.
India
is therefore the flavour of the times in the West.
It has become the darling country all of a sudden,
thanks to people like Manmohan Singh, Pranab
Mukherjee, MK Narayanan and Montek Alhuwalia. They
must have read Thomas Friedman’s book "The
Earth is Flat"! They will all be in USA in mid
June to drum up support for India's economy, a seat
in the UN and pitch for some defence wares and no
doubt to discuss Iraq with President Bush. Manmohan
Singh is to meet Bush on 19 Jun and may also address
the US Congress.
USA
is ready to outsource military services as it has
done its other services and we wonder why the Indian
Government is not biting –– with insurance
safeguards for those who volunteer. If India is a
true democracy they should be allowed to
participate.
There
is excitement in Washington and activity, as many
Indians will be on the bandwagon, NSG, IB and MEA
officials and some from MOD. These are interesting
times for the world as USA's military and the
coalition in Iraq are in a very precarious position
and USA may even resort to the draft for its Armed
Forces and that will be catastrophic.
Europeans
have become lazy and Europe is the sick man of the
world with France and Holland rejecting the EU
Constitution. USA will support Boeing against
Airbus, which it claims gets government subsidy.
Therefore India is in the news and in one day ––
June, 3, several reports in the world press,
extolling India and its potential were in the news.
Here are a few:
A
Race to the Top
By
Thomas L. Friedman
The
New York Times, June 3, 2005
Excerpt
–– Bangalore, India. “It was extremely
revealing travelling from Europe to India as French
voters (and now Dutch ones) were rejecting the E.U.
constitution –– in one giant snub to President
Jacques Chirac, European integration, immigration,
Turkish membership in the E.U. and all the forces of
globalisation eating away at Europe's welfare
states. It is interesting because French voters are
trying to preserve a 35-hour work-week in a world
where Indian engineers are ready to work a 35-hour
day. Good luck.
Voters
in ‘old Europe’ –– France, Germany, the
Netherlands and Italy –– seem to be saying to
their leaders –– stop the world, we want to get
off –– while voters in India have been telling
their leaders –– stop the world and build us a
stepstool, we want to get on. I feel sorry for
Western European blue-collar workers. A world of
benefits they have known for 50 years is coming
apart, and their governments don't seem to have a
strategy for coping.
One
reason French voters turned down the E.U.
constitution was rampant fears of ‘Polish
plumbers’ –– low-cost immigrant plumbers from
Poland taking over the French plumbing trade. This
became a rallying symbol for anti-E.U. constitution
forces. A few weeks ago Franz Müntefering, chairman
of Germany's Social Democratic Party, compared
private equity firms –– which buy up failing
businesses, downsize them and then sell them ––
to a "swarm of locusts."
Indian
Software, Service Exports on the Rise
By
Dinesh Sharma ––
CNET
News.com
Excerpt
–– “Revenue from the export of software and
from services sold to companies from outside India
(what's known as offshore outsourcing, from the U.S.
perspective), reached $17.2 billion during fiscal
2004–2005, according to the group, which is also
known as Nasscom. The jump represents growth of 34.5
percent over the previous year's revenue of $12.8
billion.
Rumsfeld
Warns China on Lack of Democracy
By
Carol Giacomo –– Reuters
Excerpt
–– “Rumsfeld drew a stark contrast between
China and India, the world's largest democracy,
which America is courting as a counter-weight to the
communist nation –– ‘We anticipate that the
relationship with India will continue to be
strengthened. With respect to China, it's not
completely clear which way they are going because
you have the tension I characterised between the
nature of their political system and the nature of
their economic system’."
India’s
Defence Purchase Equations
Submarines
The
real battle of the current Mahabharata (Congress Vs
BJP/NDA) has begun as the UPA government with the
Congress leading the charge is set to review the
defence deals that the BJP government had negotiated
–– for obvious reasons, and the clock is ticking
away. The Congress is thrilled that the HDW and
Bofors cases have fallen by the way side and are no
longer on the balck list. This is a huge win for Mrs
Gandhi as unneccesarily the names of the Gandhis had
been sullied and now bygones should be bygones
–– even Ottavio Quatrocchi will soon get some
respite –– so can the others. Last week the
Delhi High Court ruled that the Europe-based Hinduja
brothers did not cheat anyone while securing an
order for 155 mm howitzers from the Swedish company
Bofors for the Indian Army. The Hinduja brothers
–– Gopichand, Prakashchand and Gopichand ––
who reside in London and Geneva had been cleared of
corruption charges last year and now cheating so
there is jubilation in the Hinduja camp too.
Earlier
on 4th March 2005, the Delhi High Court Special
Judge Aruna Suresh had closed a case of corruption
against HDW (Howaldswerske), the German submarine
manufacturer. This judgement and order totally
absolved HDW of any wrong doing in the 1980's in
connection with the supply of 4Type 209/Gabler
design submarines to the Indian Navy and once again
opens the door for this company, along with its
partner, MAN Ferrostaal AG to cooperate with India
in its naval submarine and modernisation programme.
It
may be recalled that the Union government had banned
all dealings with HDW and put the company on its
black list after the public outcry over the
submarine scandal in which hefty commissions were
allegedly paid to powerful arms merchants, including
former senior naval officers. It was the Indian
Ambassador in Germany who inadvertently blew the
whistle, when he inquired from MEA Delhi if
commissions were to be paid for the 6th and 7th
submarines too. It is well known that commissions
are paid world over as a SOP. India on the other
hand had made agents illegal and now have reversed
the decision. This practice will be hard to break.
HDW
submarines, of the Shishumar (Type 209) class had
been in operation in the Indian Navy for a couple of
decades now and Mazagon Docks continues to handle
their maintenance. HDW have now offered the latest
Type 214, from HDW/MAN Ferrostaal, which are
equipped with the Air Independent Propulsion (AIP)
system and a sophisticated range of weapons and
sensors. The manufacturers also claim that they can
offer this version with missiles at prices more
favourable than those that India has currently been
offered by other countries. Consequently, the 6
Scorpene submarine procurement deal from France,
appears to be in trouble as the price has escalated
and the MESMA system has not been proved. Defence
Minister Pranab Mukherjee had also stated that there
were some problems with the Scorpene deal and it was
being looked into. Last heard the media had reported
that new bids had been called for.
The
BJP Government had negotiated the Scorpene deal when
George Fernandes was the Defence Minister.
As
part of the Indian Navy's ambitious submarine
programme, Project 75, the government had approved
the construction of 24 submarines in 30 years.
Currently, the navy operates 12 Russian and four HDW
submarines. In the first part of the project, the
Navy had wanted to upgrade its HDW submarines with
powerful missiles. The HDW submarine has eight
21-inch torpedo tubes that can fire the AEG-SUT
Mod-1 wire-guided, active/passive homing torpedo,
with a 250 kg warhead.
According
to the Navy, the best way to upgrade HDW submarines
was to fit them with Klub class Russian missiles,
which had a range of over 300 kms and were cost
effective. This upgradation, involved lengthening
the submarine –– a major modification which HDW
were capable of doing. However, HDW was blacklisted
towards the end of the 80s, after allegations of
massive kickbacks. It may be recalled that on 11th
December, 1981 the Indian government signed the
agreement with HDW under which two HDW 209 class
submarines were to have been built in Germany, and
the company was to supply kits for two other
submarines, to be assembled at Mazagon Docks,
Bombay. As per the agreement, HDW was to train
Indian personnel in assembling the submarines, and
were to have opened a consultancy service in Mumbai
for the Navy.
Addressing
Indian fears of further inordinate delays in the
acquisition programme, officials of HDW,
speaking on conditions of anonymity, mentioned that
they could present a proposal to the Indian
Government within 4–6 weeks. In their opinion,
Mazagon Dock (MDL), Mumbai, would require barely six
months to gear up to start manufacturing the new
Type 214 vessels. They based this confidence upon
the demonstrated capability of MDL to independently
maintain and refit the earlier Type 209 Shishumar
class HDW submarines, two of which were built at MDL
itself.
155mm
Guns
NYT
on 3 June had released an item that in South Africa
a Schaibir Shaikh Agent for CSF THOMPSON (now THALES),
had bribed the Deputy President Jacob Zuma for
supplies to the South African Navy and a deal with
Malaysia possibly for the G 5 155 mm guns to be
supplied by DENEL. India was to follow suit with
DENEL and now MOD had frozen all deals with DENEL
for some wrong doing in anti material rifles supply
in 2003.
F-16
Fighters
Following
the Bush administration's offer to India to supply F
16s/F 18s, the USA had given the nod to supply F-16
fighter aircraft to Pakistan. The US Defence
Security Cooperation Agency head Air Force
Lt-General Jeffrey Kohler had said that Islamabad
had proposed to buy nearly 75 F-16 (Falcon) fighter
aircraft. Kohler said that Pakistan had also
inquired about buying 11 used F-16s. A team of
executives from Lockheed Martin's F-16 assembly
plant in Fort Worth, Texas, is now due in Islamabad
to discuss the proposed sale, he said, adding that
he had held arms-sales talks with Pakistani Defence
Ministry officials last month.
India
will do well to look at the offer of assembling
F-16s in India as it can come cheap. USA is getting
some 3000 JSF 35s for $50 million per piece and 400
F-22s at $70 million per piece. India missed the
offer of the F-5 plant, which earlier the USA threw
away –– it should now bargain for the F-16 plant
and with Indian and Israeli help the aviation
industry can take leaps ahead.
India
is the flavour of the times and Indian leaders
should look at the opportunities with open minds and
ride the tide as it rises for India. USA is awash
with money despite its deficits and India can dip
into the till easily. USA is willing to cooperate.
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