Will President Barack Obama’s visit to India on the eve of Indian Republic Day, which is marked with show of India’s military might, prove to be a game changer in the Asia—Pacific strategic calculus? Since the visit is happening in the wake of increasing Chinese assertiveness in the Asia-Pacific region with aggressive territorial claims of regional land and maritime neighbours, strategic analysts tend to dwell on the evolving triumvirate of India, US and Japan in the Asia-Pacific region as the counter to the Chinese designs. This appears to be a hidden agenda of at least two of the partners — US and Japan — and India would not dare to come out openly. Recent Indian diplomatic moves to strengthen diplomatic and strategic relations with Japan have been further followed up with US, whose President has made an unprecedented decision to travel to India as the Chief Guest of the Republic Day parade, showcasing India’s military might. The mere presence of the US President during the parade will entail not only the approval of India’s military modernisation programme but a sort of encouragement also as Obama visit is likely to herald a new era in Indo-US defence cooperation, who is keen to develop political and strategic ties with India. Since there is a bipartisan support for strengthening strategic relations with India, it does not matter if President Obama has become a weak President in the recent months.

From economic to environment and defence to strategic arena, the US Administration is looking to strengthen the partnership with India and the proposal to extend the 10-year Defence Framework Agreement to 2025 will have a significant impact on bilateral strategic relations. This has a wide-ranging cooperation agenda for which Frank Kendall, US Under Secretary of Defense for Acquisition, Technology and Logistics, will be visiting India next week to discuss with Defence Secretary R.K. Mathur, Defence Production Secretary G. Mohan Kumar and the Scientific Advisor to the Defence Minister Manohar Parrikar, the issues relating to co-development and co-production of weapon systems and to promote collaboration in defence technologies.

According to Kendall’s spokesperson Maureen Schumann, “His primary objective is to continue momentum on the Defense Trade and Technology Initiative (DTTI), which promotes collaboration on defence technology and enables co-production and co-development of critical defence systems.”

Defense Trade and Technology Initiative

The DTTI mechanism was initiated in 2012 but lying dormant over various differences relating to some of the Foundation Agreements, the US has been insisting India to agree to. However, India seem to have successfully resisted the pressure and in order to grab some of the mega defence contracts in the lucrative Indian defence market of over $100 billion, the US seem to have relaxed the application of its national law over Indian defence acquisitions. After the launch of DTTI three years ago, US side is reported to have proposed 17 projects for joint development and production but Indian concerns relating to transfer of technology hampered further progress. To promote cooperation under DTTI, consensus has been reached to augment the present one under the overall mechanism of the Defence Policy Group, which has been assigned to chalk out path for future defence cooperation.

Under DTTI the US has been luring India with a number of socalled transformative defence technologies for co-development and co-production with India like the next-generation Javelin antitank guided missiles and MH-60 Romeo multi-role helicopters. The Lockheed Martin officials appear to be confident that in spite of India ordering the Israeli Spike anti-tank guided missiles, India will work with the company under DTTI to co-develop and co-produce the next-generation Javelin missiles.

The ambitious Defence Framework Agreement to be signed and extended for 10 years from 2015 during the President’s visit will deal with other issues like joint military exercises, the scope and level of which are likely to be raised significantly. Both the sides will also discuss on ways to advance shared security interests for regional and global security.

However, regarding DTTI, the US concerns also appear to be genuine as India has reportedly demanded right to manufacture components rather than whole systems, which will put the US industry in disadvantage. Under the DTTI, US has probably agreed to give final shape to two pilot projects — the one relating to unmanned aerial vehicles (UAV) and the other relates to systems for the C-130J Super Hercules transport aircraft, manufactured and sold to the Indian Air Force (IAF) by the Lockheed Martin Corp. According to US industry sources the UAV project involves the RQ-11 Raven developed by US firm AeroVironment Inc. This drone is world’s most widely used UAV, which is a lightweight plane and can be manually used or also for autonomous operations. The US Administration maintain tight export control over the bigger UAVs but unarmed systems like the Raven have been cleared for sale and for the first time transfer of technology to India, which are used mainly for surveillance. According to a Lockheed Martin official the transport plane project involves development of roll-on, roll-off modules which will permit the Super Hercules to be utilised for surveillance and also as VIP transports and hospitals. The US industry sources do not want to openly talk about the above mentioned two pilot projects, as the MoUs to be signed during the Obama visit is still under discussion. Lockheed Martin has already supplied IAF six Super Hercules and order for six more have been placed.

The US Administration is in fact enthused over Indian acquisition of weapon systems and platforms over present and last decade, worth $10 billion and has received further commitments for deals worth $5 billion for the 22 Apache helicopters, 16 Chinook helicopters and six Super Hercules transport aircraft. The deals for the Apaches and Chinooks under the foreign military sale (FMS) route is likely to be finalised during the President’s visit.

The ambitious Defence Framework Agreement to be signed and extended for 10 years from 2015 during the President’s visit will deal with other issues like joint military exercises, the scope and level of which are likely to be raised significantly. Both the sides will also discuss on ways to advance shared security interests for regional and global security. In the context of ongoing tussle between China and rest of East Asian and South East Asian powers over control of South and East China Sea, the dialogue under the rubric of Defence Framework Agreement would be very significant. Under the joint naval cooperation both sides are expected to upgrade the annual Malabar maritime exercises.

Nuclear

The most contentious issue appear to be in the nuclear arena, where the interlocutors of the two sides have not yet come to any conclusion over the Indian liability laws, which provides for supplier liability in case of a nuclear accident whereas the US side is insisting that India must ratify the International Atomic Energy Agency (IAEA)-sponsored Convention on Supplementary Compensation, which limits supplier liability. India has offered to the US side to set up an insurance pool to indemnify global nuclear suppliers against liability in the case of an accident in a nuclear power plant. After the Indo-US Civil Nuclear Cooperation Agreement in 2008, India offered two nuclear parks in Gujarat and Andhra Pradesh where the two US nuclear companies were proposed to set up six nuclear power plants each in the nuclear power parks. This involves an investment of over $100 billion and the US Administration is eager to see that the US companies do not lose out these multibillion-dollar mega contracts over nuclear liability issue. However, India put a spanner in their plans as the Indian Parliament passed a legislation to put the blame for a nuclear incident on the supplier of nuclear plants.

According to the Indian proposal before the US companies, a nuclear insurance pool would be set up to indemnify the third party suppliers against liabilities in the case of a nuclear accident. According to a news agency report, insurance would be bought by the companies contracted to build the reactors who would then recoup the cost by charging more for their services. Alternatively, governmentowned Nuclear Power Corporation of India Limited would take out insurance on behalf of these companies.

Indian officials claim that insurance plan was the best option in view of the very tough Indian nuclear liability law which would be very difficult to amend in view of vast differences in Indian political class over liability provisions.

Indian officials claim that the US Administration is considering Indian proposal but observers express doubt over US concurrence. The Obama visit thus seem to be productive mainly in defence arena, whereas some of the economic issues like the visa and totalisation agreement may not reach conclusion, though the two countries will set a very ambitious target of scaling up the bilateral trade of $100 billion to $500 billion in next five years.