Defence Industry

F-22 Raptor : Economics versus Technology

The US Department of Defence has been contemplating whether to lift the ban on F-22 exports, the fifth generation stealth aircraft. This would mean that many of the US allies namely Japan, Israel and others might become interested in procuring the aircraft. For Japan it would provide much needed air superiority to the Japanese Air Force concerned at North Korean long range missiles and nuclear capabilities (even though the US has stationed a dozen F-22s at Kadena air base in Japan since May 2009). Israel would like to get the aircraft to launch any pre-emptive strike on Iran.

Rafale: the doomed French bird

Is the French 4th+generation fighter aircraft doomed? This question must be anguishing people in Dassault and the French government. The Rafale has not won any contract in the export market since its entry into service in 2004 and is now apparently out of race for the MMRCA contract. What lies behind all these repeated commercial fiascos? The Rafale lost five major bids against its US counterparts in recent years: in South Korea (2002), Singapore (2005), Saudi Arabia (2007), Morocco (2007) and apparently India.

India’s Defence Offset Policy

Although India has established a formal mechanism for implementation of the defence offset policy, the structure and procedures lack the thrust to fulfil the objective of energizing the Indian defence industry. Besides, the policy is not supported by the existing Foreign Direct Investment (FDI) and licensing policies. While evidence suggests that domestic industry can absorb offsets, what India needs is an effective body to handle offsets, liberal FDI and licensing policies, and a better banking provision.

Is India on the Path to Vibrant Defence Industry?

What does it take to be ‘a vibrant industry’ or more specifically ‘vibrant defence industry’? Broadly, it would demand that the industry should be innovative in terms of processes and products, its base and structure should have large dimensions horizontally, vertically, and technologically to be responsive enough to keep pace with the changing strategic expectations of the nation. Defence exports and imports should be a matter of deliberate political or commercial policy choices and not a result of security compulsions.