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Saturday, 28 February 2015

From Today's Papers - 28 Feb 2015

China moots pact with India, Lanka
Beijing, February 27
China today proposed trilateral cooperation involving India and Sri Lanka for regional stability as the new government in Colombo sought to re-balance its ties with China, preferring to follow a “non-aligned” policy.
“China is open-minded about trilateral cooperation between China, India (and) Sri Lanka”, Chinese Foreign Minister Wang Yi said during a joint press conference with Sri Lankan counterpart Mangala Samaraweera.
“I want to say both India and Sri Lanka are China’s cooperative partners in South Asia”, Wang said.
Samaraweera is the first Sri Lankan official to visit Beijing since president Mahinda Rajapaksa’s defeat in polls this January. China made significant investments in Sri Lanka during Rajapaksa’s tenure, raising concerns in India.
Samaraweera’s visit to China will be followed by new Sri Lankan President Maithripala Sirisena’s next month.
The two ministers had a lengthy talk focused on the new political alignment in Sri Lanka following the fall of the Rajapaksa government. Samwarweera, however, did not comment on the trilateral proposal by China.
Wang said China wanted progress in relations among all three countries, including ties between New Delhi and Colombo.
“We believe that China and India may leverage their respective strength in playing a positive role in helping Sri Lanka advance its social development,” he said.
“I believe sounder interaction and pursuit of common interests among the three countries is in the best interest of the three countries and also in the best interest of regional peace, stability and prosperity”, Wang replied to a question.
He also said China and India stay in contact over a large number of regional and global issues.
“We would certainly like to have consultations with the Indian side regarding pursing trilateral cooperation in future or cooperation involving more parties”, Wang said. — PTI
Militarising for future
The approach is right but no clarity on costs

The Modi government has so far made the right noises about India's defence preparedness after a tepid decade that saw more tender cancellations and CBI probes than actual orders. The decision to scrap plans to make conventional submarines in favour of the harder-to-detect nuclear ones could be a game-changer for the Indian Navy. Though not equipped with nuclear missiles, these submarines don't come up for air and can therefore remain undetected for months. The government also wants to source stealth technology enabled fighters from Russia called the PAK FA which will eventually be developed into a Fifth Generation Fighter Aircraft currently produced only by the US.  If Russia accepts the request, these fighters will be much more lethal than any counterpart in India's extended neighborhood.
Both platforms will not come cheap. The cost of constructing six conventional French submarines has shot up to over Rs. 5,000 crore per piece and they are still hobbled by delays. It is anyone’s guess what the final cost of the much superior nuclear submarines will be, especially because of India’s limited capabilities in this arena. The Russian stealth fighter PAK FA is still being flight tested and there is no clarity on costs. The engine, avionics and weapons suites are under development. The maintenance cost of these fighters will also be very high as compared to the planes they are supposed to replace.
In both cases India will heavily lean on Russia though the government is bound to market them as made-in-India products. Vladimir Putin had to intervene to end the endless cycle of escalating costs for INS Vikramaditya, a much simpler platform than nuclear submarines and stealth fighters.  Russia, like all high-end weapon producers, will extract a price for India's eagerness for equipment Pakistan can only dream of and for China to sit up and take notice. Defence analysts have consistently pointed out gaps in India's defence preparedness.  They should now give a rational assessment of the costs involved and whether the Indian citizen should be expected to finance it against demands from sectors providing security of a different kind but equally important.
India placed orders worth Rs 83,858 crore for military purchases from 2011 to 2014
NEW DELHI: India have spent big from the 2011 fiscal year to the last fiscal year on the Army, Air Force and Navy for procuring arms, weapons and other defence-related systems.

Defence minister Manohar Parrikar said the three services have placed orders worth Rs 83,858 crore. During this period, India's own defence sector earned Rs 69 crore by export of military hardware.

According to the Parrikar, the IAF placed orders worth Rs 55,406 crore to foreign companies between 2011-12 and 2013-14 while the Navy and the Army placed orders worth Rs 25,454 crore and Rs 2,998 crore respectively.

Replying to questions in the Lok Sabha, the defence minister also said that foreign direct investment amounting to Rs 24.36 crore has been received after government opened the defence industry for private sector.

"The expenditure on capital acquisition in respect of orders placed on Indian vendors and foreign vendors during the period 2011-12 to 2013-14 was 53.9 per cent and 46.1 per cent respectively," he said.

Giving details of efforts by the government to strengthen the domestic defence industry, he said a total of 144 companies have been issued licences and letters of intent for manufacture of military hardware in the last 14 years.

He said 29 joint ventures and FDI proposals have been approved while noting that the procedure for "buy-and-make (Indian) and make" categories of acquisition over "buy (global)" category to encourage Indian defence industry.

READ ALSO: Govt approves making of 7 stealth frigates, 6 nuclear subs

As per the new FDI policy in defence, foreign investment upto 49 per cent has been allowed through FIPB (foreign investment promotion board) route and beyond 49 per cent, with the Cabinet committee on security.

The defence minister said Indian private sector industry has also been allowed to receive maintenance transfer of technology (MToT) in "buy (global)" cases.

He also said that an online system of receiving application for issue of no-objection certificate for export of military stores has been introduced besides formulating a defence export strategy.

Parrikar said during the last four years, NoCs for export of goods which are in the nature of military stores have been issued for many countries including Algeria, Nigeria, Bosnia and Herzegovina, Sri Lanka, Paraguay, Japan, Afghanistan, Spain, Nepal, Belgium, Malaysia, Norwat, Romania and Port of Spain.

The NoC has also been issued for supply of such goods to Vietnam, France, UK, UAE, Bangladesh, Ghana, Sweden, Germany, Saudi Arabia, Thailand, Egypt, Brazil, Burkina Faso, Israel, Republic of Korea, Macau, Oman, Tunisia, Kazakhstan, Uruguay, Canada, Russia, Tajikistan and Singapore among others, Parrikar said.

He said Indian defence sector earned Rs 46.08 crore by exporting military goods in 2011-12, Rs 5.62 crore in 2012-13 and Rs 17.74 crore in 2013-14.

READ ALSO: Global arms majors keen on Modi's 'Make in India' thrust

The defence minister said in the last four years, orders have been issued debarring six firms along with their allied and subsidiary firms from business dealings with the defence ministry for a period of 10 years.

He said allegations of kickbacks and commissions are dealt with as per provisions of defence procurement procedure (DPP) and wherever necessary, the cases are referred to the appropriate agency including the CBI.

Replying to another question, he said a proposal to procure medium multi-role combat aircraft (MMRCA) from French firm Dassault Aviation was under consideration and no agreement has been signed yet.

India has been holding talks with Dassault for the nearly $10 billion deal for 124 Rafale fighter jets.

To a separate question, Parrikar said six Scorpene submarines are currently under construction at Mazgaon Dock Ltd, Mumbai, in collaboration with DCNS of France.

He said no proposal has been received from Japan government for construction of submarines.

"The defence acquisition council has constituted a core committee in December 2014 to identify suitable Indian shipyards for construction of submarines indigenously which is required to submit its report within three months," he said.
Ahead of secretary-level talks: Army chief warns India to expect matching response

As Islamabad and New Delhi prepare for foreign secretary-level talks, army chief General Raheel Sharif has warned India that Pakistan will give a ‘befitting’ response to any provocation along the Line of Control (LoC) and the working boundary.

“Let there be no doubt that any provocation along LoC and working boundary will meet a befitting response,” the military’s chief spokesman quoted Gen Raheel as saying during a visit to areas affected by Indian firing along the working boundary near Sialkot on Thursday. The statement came just ahead of a crucial visit to Pakistan by India’s foreign secretary, who is due to arrive on March 3.

The army chief termed repeated ceasefire violations by India in the recent past “an attempt to distract Pakistan from its campaign against terrorism” and stressed that such actions would have a negative impact on regional stability. According to Inter-Services Public Relations Director General Maj-Gen Asim Salim Bajwa, Gen Raheel also cautioned India that the entire Pakistani nation is united in defence of the motherland.

The army chief also met troops stationed along the working boundary and the residents of adjoining areas, and paid tribute to their resilience.

Pakistani and Indian forces stationed along the LoC and working boundary have regularly exchanged fire over the past few months and have accused the other side of starting hostilities. The border clashes are expected to come up for discussion during the Indian foreign secretary’s visit.

Speaking at her weekly news briefing, Foreign Office (FO) spokesperson Tasnim Aslam said all issues, including the longstanding Jammu and Kashmir dispute, are likely to be discussed during the meeting between the two foreign secretaries.

“We welcomed the Indian initiative. At this stage, I would not like to speculate on what the exact agenda of the talks will be,” she said. “However, whenever Pakistan-India dialogue resumes, we expect all matters would be on the table for discussion, including Jammu and Kashmir, Siachen, water resources, confidence building measures, people to people contacts and trade matters,” Tasnim added.

She pointed out that Jammu and Kashmir had been on the UN Security Council’s agenda. “We have been discussing the Kashmir issue bilaterally. The process, however, has to be result-oriented,” she said.

The Indian foreign secretary’s visit is expected to help resume the stalled peace process, which New Delhi has been reluctant to revive since Narendra Modi came to power.
India’s Military In Crisis
The defence budget of India—the world’s largest arms importer—has more than doubled over the past decade from Rs 80,500 crore to Rs 229,000 crore for the financial year 2014-15.

Yet, the defence forces are critically short of arms, and men and women at arms.

The army, navy and air force are short of officers by 17% (7,989), 17% (1,499) and 3% (357) respectively, according to latest data tabled in the Lok Sabha. Consider the arms deficits in the three services:

–The Indian Air Force (IAF) is short of 272-306 fighter aircraft (as this IndiaSpend report explains) and 56 medium transport aircraft.

–The Indian Army needs about 3,000 to 3,600 artillery guns, 66,0000 assault rifles, 2 lakh pairs of ankle leather boots and 66,000 rounds of armour-piercing ammunition for T-90 tanks.

–The navy needs 12 diesel-electric submarines, 6 nuclear attack submarines and 7 stealth frigates.

The three defence wings also collectively need more than 1,000 helicopters. This is an indicative list: The actual list of defence requirements and shortages is longer.

Yet, the Ministry of Defence ­accounts for the second-highest share of India’s budget, after the finance ministry.

The defence budget accounts for 1.78% of India’s Gross Domestic Product (GDP) and 12.76% of total central government expenditure, said Amit Cowshish, distinguished fellow at Institute for Defence Studies and Analyses (IDSA).

The revenue-to-capital ratio of the defence budget is 60:40. Revenue expenditure is for payment of salaries and maintenance of defence bases and equipment. Capital expenditure is for equipment purchases and modernisation.

India is expected to spend Rs 94,587.95 crore in 2014-15 as capital expenditure, a 20% increase from Rs 78,872.23 crore last year.

“The requirement of funds (for defence purchases) is directly related to carried-forward committed liabilities and signing of new contracts,” Cowshish said in an email interview with IndiaSpend. As a result, the forces could expect a similar increase in the 2015-16 budget “if – and this now seems to be a big if – new projects, such as the one for a new combat aircraft, go through”.

Let us now look at sector-wise allocations of the defence budget.

Among the three defence wings, the army has consistently cornered the highest funding. In 2014-2015, It accounted for Rs 92,601.32 crore, which is 40% of total expenditure, followed by the air force and navy at Rs 20,506.84 crore (9%) and Rs 13,975.79 crore (6%), respectively.

The pension question ::

The budget allocation does not take defence pensions into account, as this is placed under a different budget head. The MoD allocated Rs 50,000 crore for defence pensions in 2014-2015, an increase of 9% from Rs 45,500 crore in 2013-14.

Last year’s budget earmarked Rs 1,000 crore for the one-rank-one-pension scheme for ex-servicemen. This might grow to an estimated Rs 8,000 crore this year, as the Times of India reported.

More than two million ex-servicemen in India have been demanding one-rank-one-pension, which ensures that the same pension is paid to personnel who have retired in the same rank with the same length of service, irrespective of retirement date.

Funding research and development ::

Investing in defence research and development (R&D) is expected to boost India’s indigenous arms industry and reduce its dependence on imports. The Indian government spent 42.7% of defence capital expenditure on arms imports in 2013-2014, according to data tabled in the Lok Sabha.

As we mentioned before, India is the world’s largest importer of arms as per Stockholm International Peace Research Institute (SIPRI), an independent international institute that researches conflicts, armaments, arms control and disarmament.

The MoD has almost doubled the capital expenditure for R&D to Rs 9,298.25 crore in 2014-2015 from Rs 5,257.60 crore in 2013-2014. Besides, the MoD has provided Rs 5,984.67 crore for salaries and maintenance of research centres.

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