Defence supply chains are now the way of the world. India needs the skills development and knowhow transfer that come with being part of global chains.
Some in India have a negative reaction to being part of a “supply chain”—particularly when it involves defence production with foreigners. This reaction is often based on a visceral feeling that maintaining “strategic autonomy,” or the atavistic “non-alignment,” requires India to stand alone and never be a part of anyone else’s “chain”. Perhaps the very term “chain” conjures up restraint reminiscent of a colonial past.
However, a dispassionate assessment of the benefits to India of participation with the United States in defence supply chains shows that the benefits far outweigh the constraints. Any contract for participation in a joint endeavour involves undertakings by each party. The question is not whether the undertakings involve constraints (all contracts involve constraints), but whether the benefits of the arrangement outweigh those constraints.
Defence supply chains are now the way of the world. Unless India is willing to participate in such supply chains, many of its national interests and aspirations for great power status will remain unfulfilled. The challenge for India is not whether to participate in defence supply chains, but with whom to partner and on what terms.
Cases in point are opportunities for India to partner with US defence giants Boeing and Lockheed in global supply chains.
Thus far, Boeing has been the leader in integrating Indian manufacturers into defence supply chains. The deal between Boeing and Tata to build in Hyderabad fuselages for AH-6 Apache helicopters has received much publicity. However, Boeing was already involved in many Indian production efforts that have the potential of making Indian companies major players in global defence supply chains. The Apache project will only add significantly to the more than 3,500 Indians presently working on dedicated Boeing supply chain jobs.
However, the Apache project is perhaps dwarfed by the possibility of Lockheed’s teaming to build the entire F-16 fighter aircraft in India. This production would entail building in India 85% of the Indian Air Force’s latest requirement for fighter jets. Lockheed is already slated to make in India wings for the F-16 Block 70. Partnering for the full aircraft would fully integrate Indian companies into a worldwide supply chain for virtually all components of an advanced F-16. The result would be a $15 billion export potential in addition to the planes made for the IAF. Such an endeavour could employ thousands in high-end jobs.
Thus, the first reason for India’s partnering with the US on global defence supply chains matches directly with Prime Minister Narendra Modi’s “Make in India” initiative. The creation of sales and the resulting employment makes these partnerships highly desirable. But the importance of defence supply chain integration goes far beyond income and employment.
India needs the skills development and knowhow transfer that come with being part of global defence supply chains. Decades ago, India tried the import substitution and border centric approach to development. The result was stagnation and a failure to keep pace in building the skills required for a modern economy. There is no better way to develop a highly-skilled workforce with the knowhow necessary to produce at the highest levels, than to meet the standards of a global supply chain.
Interoperability of organisations and weapons systems is the gold standard for strategic partnership. Weapons systems that are jointly manufactured can be a fundamental driver of interoperability. Weapons systems that can be used by both the US and India enhance to the ability to collaborate in meeting common strategic challenges.
No two nations have more commonality in the strategic challenges they face than do India and the United States. Chief among these is an increasingly belligerent and authoritarian China. Should China ever decide to make good its claims to an entire Indian state (Arunachal Pradesh) or choke off free access to the South China Sea, the US is the only major power likely to back India in defence of its national interests. In such situations, Indian participation with the US in global supply chains may well be a crucial component of meeting these challenges.
To be sure, the US also benefits from having India as a partner in global defence supply chains. These benefits are largely mirror images of the benefits to India. Thus, the US and India need to redouble their efforts to include India in such supply chains as those for the F-16 and the Apache helicopter. These supply chains will greatly enhance the abilities of both countries to protect their national interests and build peace and stability throughout the world.
Raymond E. Vickery, Jr is a former US Assistant Secretary of Commerce; Senior Associate, Center for Strategic and International Studies; Senior Advisor, Albright Stonebridge Group; Retired Partner, Hogan Lovells LLP.