Buying American Blades

On the eve of Prime Minister Narendra Modi’s second trip to the US as PM in September last year, the Cabinet Committee on Security cleared the proposal to purchase 22 ‘assault helicopters’, or helicopter gunships, from Boeing for the Indian air force and the army. The decision had come as a surprise to experts then, for Boeing was offering a version of the Apache by way of direct sale. Moreover, this flew in the face of the Make In India policy.

Public sector Hindustan Aeronautics Limited (HAL) has been manufacturing Light Combat Helicopters (LCH) and Light Utility Helicopters (LUH) for the army. Independent experts like Ashok Parthasarathy, former scientific and technology advisor to Indira Gandhi, felt HAL had the capacity to deliver assault helicopters to the IAF, but was ignored. Parthasarathy told Outlook that he had raised the issue in 2014 and 2015 “at the highest levels” of the Ministry of Def­ence. The state-owned aircraft manufacturer HAL’s proposal, he recalls, was received with great enthusiasm but was discarded for reasons he fails to fathom.

“HAL has considerable local, technological and industrial base in the area of des­igning and manufacturing helicopters,” says Parthasarathy. HAL, he points out, has designed, developed and prototyped the Tejas, India’s own Light Combat Aircraft (LCA). The IAF has placed an order for 140 Tejas fighter jets.

The Comptroller and Auditor-General (CAG) of India’s latest report, however, records how HAL’s delivery of indigenously-made helicopters flopped, with the Army discarding all 17 helicopters delivered to it.

Around the time the Apache sales were cle­­ared, the government cleared a $400 million deal with Israel to purchase ‘Heron’ unmanned attack drones. This was while HAL was developing the Rustom-II, an attack drone of similar class.

Following the deal, Boeing decl­ared it would manufacture the chopper’s fuselage in Hyderabad in partnership with the Tata group. Soon afterwards, the government followed this by easing FDI norms in the defence sector, but without mention of technology transfer. India being a top defence importer, the government has maintained that its intent was to promote indigenous manufacture with transfer of technology. Most of its executive decisions, however, seem to contradict this.

The question raised is why the Ministry of Defence bypassed the Make in India programme and decided to imp­ort the expensive hardware, rather than involve HAL and ensure transfer of technology.

The IAF required ‘gunships’ or assault helicopters to replace its aging Russian-made Mi-25 and Mi-35 choppers. It wanted 22 gunships and about nine heavy lift choppers. In 2008, the UPA-1 government floated a tender for the choppers and six companies placed bids. The deal was valued at around $1 billion. The tender was dropped after Boeing and Bell pulled out in 2009 and  was re-issued later that year. Eurocopter, Augusta Westland and Sikorsky also opted out for various reasons.

In 2014, the government had a choice between Boeing, for its Apache A64D, an earlier version of which had first been used in Vietnam, and Mil’s Mi-28. The Boeing aircraft had been first tested during the ’70s and the Russian chopper a decade later. Some considered the Russian chopper to be superior in many ways and dismissed the Apache as a relic of the Vietnam War and the 1991 Iraq conflict.

The IAF and the MoD chose Boeing’s Apache for a direct procurement of 22 cho­ppers. The view was that the Mi-28 lacked sufficient manoeuverability and it didn’t make the cut during trials. The direct military sale reportedly included no plans for manufacture, assembly or transfer of technology. It would also mean that the IAF would be dependent on Boeing for spares.

The issue of spares often plagues defence procurements. Priced much lower at first, prices for the spares are raised by 200-500 per cent once the procurement is made. Locating spares is another task—Indian agencies often have had to employ middlemen to locate and app­roach spares manufacturers.

The army’s army aviation corps had also demanded 39 similar assault choppers. However, no separate tender was issued for additional requirements and the government placed an order with Boeing on the same terms and conditions. That means an order for around 60 choppers through direct import, without any local manufacture, assembly or transfer of technology.

Parthasarthy claims that once he learnt of plans to import the large number of military choppers, he app­roached the then HAL chairman to ask if they could manufacture or at least assemble the helicopters here. HAL was already developing its light combat helicopters.

“HAL put together a proposal and I app­roached the MoD at its highest levels. This was around late 2014 or early 2015 and it fell in line with the government’s Make in India policy,” says Parthasarathy. “At the time, the decision for the 22 helicopters for the air force was still pending and the MoD promised to combine the air force and army orders. That would allow HAL to manufacture the 61 helicopters,” explains Parthasarthy.

This would have allowed HAL to build helicopters, get the technology and also be self-reliant on spares. But despite having given the impression that it was favourably disposed towards HAL, the ministry placed the order with Boeing for supplying the choppers between 2017 and 2020. MoD and Boeing did not respond to Outlook’s queries.

An editorial in the July 15 issue of the Economic and Political Weekly notes how essays written by experts at Western defence thinktanks promote defence procurements to keep up with China and Pakistan, but exhort India to be “realistic about its domestic capacity to manufacture sophisticated combat aircraft”. The comment appears unc­omfortably close, say defence experts, to considerations driving defence procurements that turn the government’s own initiatives into mere ‘jumla’.