MRCA Deal: Strategic Considerations & Arms Card

The much awaited request for proposal (RFP) for 126 medium-range multi-role combat aircraft (MMRCA) was finally announced by the Ministry of Defence in a press release on 28 August 2007. It took nearly two years of deliberations since the request for information (RFI) was issued in late 2005. Six bidders, considered ‘gorillas’ in military business, will compete for the massive $ 10.2 billion contract, dubbed as ‘mother of all deals’ in the history of Indian arms acquisition. A bulky 211 page RFP document has been issued to the bidders which contains practically every aspect of the acquisition, ranging from ‘off-the-shelf fly-away conditioned’ initial purchase of 18 aircraft, procedures of technical and commercial evaluations, offset obligations, ToT conditionalities to life cycle costs, integrity pact and post-contract management. From RFP to eventual contract award is likely to take more than three years while phased operational induction process for the total number of systems could take more than a decade thereafter.

While economic, technological and operational factors do play a role in every military purchase, there should be no buts about the fact that politico-strategic considerations are going to play the most critical role in cases like the MMRCA for obvious reasons. Such considerations are normally kept out of the public domain by both the government and other stakeholders, including the end-user IAF, to justify effectiveness in autonomous decision making. The fact that the MMRCA, because of its sheer volume and stakes involved, qualifies as an ‘Arms Card’ makes it clear that eventual winner of the contract may not necessarily be the lowest bidder or the best among the rest. Much of it will depend on India’s abilities to gain maximum strategic dividends out of the MMRCA card. This is where the biggest challenge lies.

It is interesting to note that most members of the Indian strategic community, bulk of which come from the armed forces, civil bureaucracy and foreign service tend to base their arguments from their respective parent cadre considerations. Consider this: writings by most of the senior members of the armed forces tend to highlight the critical aspects of operational requirement, while civilian analysts emphasize common aspects like transparency, time delays, technological and other aspects of arms acquisition. While holistic analyses on such issues have been far and few, it is strange that many informed analysts tend to shy away from comprehending the strategic rationale of military business. Worse still, the government machinery involved in the arms procurement process tries to de-link strategic from other considerations just to avoid further controversy! One must understand that ‘linkage business’ will always occur in large arms deals primarily because of politico-strategic considerations, which are not often shared by the government. Such a scenario breeds much suspicion as well as apprehension among stake holders as well as others.

Once it is clear that MMRCA would be rightfully treated as arms card to get the best possible deal along with requisite amount of spin-off benefits, the process to acquire the same may face fewer difficulties. It is interesting to note that justification for politico-strategic considerations can come from a small section of the gigantic 253 page defence procurement procedure document (known as DPP-2006 and effective from 1st September 2006), applicable to all capital purchases for the Indian armed forces. The section on ‘Procedure for Procurement on Strategic Considerations’ (page 24) of the DPP-2006, says: “In certain acquisition cases, imperatives of strategic partnership or major diplomatic, political, economic, technological or military benefits deriving from a particular procurement may be the principal factor determining the choice of a specific platform or equipment on a single vendor basis. These considerations may also dictate the selection of particular equipment offered by a vendor not necessarily be the lowest bidder. The decision on all such acquisitions would be taken by the Cabinet Committee on Security (CCS) on the recommendation of the DPB (Defence Procurement Board)”. In sum, the government of the day can always defend its decision based on strategic considerations.

While MMRCA acquisition will raise concerns of different magnitude on every aspect, from final contract award to post-contract management, it is the politico-strategic considerations which need to be clearly articulated by the government in order to dispel myths and ignorance surrounding the deal. This brings into question about processes and intentions of the state in security matters, which otherwise revolves round the debate on twin issues of ‘secrecy on national security matters’ versus ‘transparency’. The solution lies in the ability of the political leadership to explain and justify strategic considerations in the decision making process, which first and foremost requires information sharing between the government and citizenry. Unfortunately, information sharing only occurs within the ‘Iron Quadrangle’ (political decision makers, civil bureaucracy, scientific community and the armed forces) on security matters in India. The MMRCA could prove a viable leverage for India if information on the same could be debated in a wider forum beyond the iron quadrangle. Believe it or not, often times solutions to complex issues come from a wider open debate than the famous Deng Xiaoping principle—‘do not debate. Once debate begins, things get complicated’.