Indo-US Defence Partnership: Future Prospects

One of the first priorities of the new government led by Prime Minister Narendra Modi will be to take stock of the ‘global strategic partnership’ with the United States (US) which has emerged in recent years as an indispensable partner in India’s economic transformation and the realisation of its aspiration to play a bigger role on the global stage. The defence partnership, a key pillar of the relationship, has blossomed. Yet it runs the risk of plateauing, given differences over India’s contract for the Russian S-400 Triumf Air Defence Missile System and pending progress on the remaining two foundational agreements -– the Industrial Security Annex (ISA) and the Basic Exchange and Cooperation Agreement (BECA).

Last year saw the first-ever 2+2 dialogue against the backdrop of burgeoning joint exercises such as Cope-India (Air Force), Yudh Abhyas (Army) and Vajra Prahar (Special Forces). The two sides are also increasingly engaged in multi-lateral exercises such as the MALABAR, RED FLAG and RIMPAC, covering the broad expanse of the Indo-Pacific. The US has recently renamed its Pacific Command as the US Indo-Pacific Command (USINDOPACOM), an acknowledgement of the seamless connectivity that binds the Pacific and Indian Oceans and India’s growing importance. The Indian Navy and the US Naval Forces Central Command (NAVCENT) are set to deepen their maritime cooperation in the Western Indian Ocean, where Chinese presence, in island nations and strategic ports such as Gwadar and Djibouti, are of concern to India.  The defence and strategic relationship today encompasses a broad spectrum of activities from intelligence sharing to joint humanitarian and relief efforts, mutual port visits by naval ships, joint exercises, trade in military hardware and, most importantly, co-production and co-development of military systems.

Just as Prime Minister Modi was sworn in again, the US State Department Spokesperson Morgan Ortagus called India a ‘great ally’ and ‘partner’ with which his country would work on a broad spectrum of issues. The US sees the defence partnership in the context of its Building Partner Capacity programmes. It increasingly regards India as a potential ally in dealing with the emerging challenges in the Indo-Pacific, notably China’s growing economic and military assertiveness. India’s importance as a market for arms supplies, next only to Saudi Arabia, is a major factor. Since 2008, India has purchased nearly US$ 18 billion worth of arms from the US, including sophisticated C-17 and C-130J transport planes, state-of-the-art P-8i maritime reconnaissance aircraft, Harpoon missiles, Apache and Chinook helicopters and M777 howitzers. These are among the most sophisticated and lethal platforms of their kind.

India’s immediate objective is to rapidly build its defence capabilities, in order to better deal with potential threats on its northern and western land borders and in the Indian Ocean. It needs the latest technologies to pursue its ambitious ‘Make in India’ programme in defence manufacturing. A rapidly growing economy and deeper pockets alone will not guarantee that unless agreements are in place to secure the latest technologies from the US, beyond simply buying items off the shelf. India has to ensure that high-tech imports are equally matched by technology transfer for indigenous manufacturing.

The foundational agreements with the US such as General Security of Military Information Agreement (GSOMIA, 2002), Logistics Exchange Memorandum of Agreement (LEMOA, 2016) and Communications Compatibility and Security Agreement (COMCASA, 2018) are path-breaking. However, the true potential for high technology transfer involving the Indian private sector would be realised only after conclusion of the ISA. Looming large over the Indo-US defence co-operation is the shadow of India’s continued reliance on Russia for key defence imports. Beyond the fact that Russian and US platforms are  incompatible in terms of  communications security, the US is particularly apprehensive about the potential for compromising US platforms when operating alongside the Russian  S-400 system.  India’s contract for the sophisticated S-400 air defence missile system has been red-flagged by the US as potentially significant for triggering sanctions under Countering America’s Adversaries Through Sanctions Act (CAATSA). The fact that a special waiver amendment under the sanctions provision of CAATSA was included in the John McCain National Defense Authorisation Act of 2019 specifically with India in mind means that a waiver is likely but not necessarily guaranteed. 

The menu of sanctions under CAATSA ranges from denial of visas to persons who are party to the S-400 contract, to even more severe action such as denial of munitions licences to India. The latter, if ever resorted to, would mean the cessation of all defence and strategic cooperation. Given the prevailing geopolitical uncertainties, it is moot if the US would want to go down this path.

However, decisions taken by India in exercise of its strategic autonomy and in view of the long-standing dependence on the Russian equipment, nevertheless, would determine the kind of defence technologies the US would be willing to share with India, the convergence over the geostrategic developments in the Indo-Pacific notwithstanding.

There is no gainsaying the fact that India needs to speed up its defence modernisation, especially capacity-building, indigenous manufacturing and access to the most sophisticated defence technologies, if it is to play a role commensurate with its ambition and potential. The most potent source of such technologies remains the US. It is pertinent to note that even China’s defence modernisation benefitted from close cooperation with the US as part of their ‘strategic alliance’ against the former Soviet Union in the 1980s. The ‘three pillars’ approach taken by the US included military technology cooperation under the Foreign Military Sales (FMS) status granted to China by President Ronald Reagan in 1984, which resulted in the US building artillery ammunition factories and undertaking the F-8 fighter jets avionics modernisation programme, among others, until all US military exports to China were suspended in the aftermath of the Tiananmen Square incident of June 1989. 

What has facilitated the rapid development of defence cooperation between the US and India in recent years is the designation of India as a Major Defence Partner/Friendly Foreign Country and increasing willingness on the part of the US to relax rules and regulations governing high technology transfer through special carve-outs such as the Strategic Trade Authorisation Tier-1 Licence Exemption. However, the US lags behind in regard to the ‘Make in India’ aspects of the defence trade with India as compared to New Delhi’s robust technology transfer agreements for fighter aircraft, advanced trainers and submarines with traditional arms suppliers such as Russia, United Kingdom (UK) and France. The bilateral Defence Trade and Technology Initiative (DTTI) would need to expedite the work of its seven joint working groups and find ways to ensure early implementation through industrial production of various agreed-upon defence projects. US concerns regarding IPR run deep and remain to be assuaged, just as India’s expectations regarding transfer of technology and license production remain unfulfilled.

India’s ability to meet the emerging geostrategic challenges in the Indo-Pacific is a function of its geographic location, leadership, the strategic doctrines developed in response to emerging threats, and, above all, the resources that can be mustered.  The budgetary crunch severely limits capital expenditure on new platforms, especially expensive imports, which makes it all the more vital for India to focus on cheaper indigenous manufacturing. Over reliance on outright imports, whether from the US, Israel, France, UK or Russia, must be gradually reduced, in favour of indigenous designs, development and production.  

The new government will have to take a strategic view of the remaining foundational agreements with the US in order to facilitate transfer of key technologies necessary for building capacities to meet the growing challenges in the Indo-Pacific. It will have to weigh the consequences of altogether abandoning the traditional Russian supplies. Any  jettisoning of the S-400 deal would impact adversely on  ties with Russia across the board, including the acquisition of other key platforms such as the Akula class SSN nuclear attack submarine that is to replace Chakra II, which complements India’s nuclear triad based on the indigenously built Arihant SSBN.

Given India’s evolving procurement system, efforts should be made to enhance compatibility of technology from various sources. This may require greater cooperation with the US since many of India’s suppliers other than Russia depend on US technologies for their products.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.