Finding the Right Fit: India’s military modernization and US military sales

The decision by India to purchase the S-400 SAM (surface to air missile) system from long-time defense supplier Russia has renewed a discussion amongst some within Washington on the merits of India as a reliable ally. 

The assumption seems to be that the American partnership with India requires large scale purchases of defense equipment from the United States.


That approach detracts from the belief at the core of the U.S. Indo-Pacific strategy, which is that American national security benefits from a rising India that is an American ally and future security provider in Asia. 

This notion of Indian power bolstered by the U.S. to help confront a rising China blends with India’s sense of its place in the world and its desire to be the leading power in Asia. Similar interests and alignments, however, have not yet led New Delhi and Washington to find the right fit, in many arenas especially that of defense trade.


In India, there are multiple explanations for the subject of defense purchases from Russia. For some, it is important that India maintain its independence in decision making by purchasing defense equipment from a variety of sources. This is referred to as an element of India’s doctrine of strategic autonomy. Others argue that purchasing defense equipment would help ensure that erstwhile ally Russia does not get too close to rival China. 


The criticism and concerns voiced in the United States over India’s defense deals with others misses a key point: President Barack Obama referred to the India-US relationship as the defining partnership of the 21st century and the Trump administration’s latest National Security Strategy referred to India as a critical country. Further, the United States renamed its Pacific Command as the Indo Pacific Command, as a sign that it acknowledged India’s importance to the region and as an American ally.


Yet at the end of one decade of defense purchases, 2008-2018, India-US defense sales stand at only USD 15 billion. The United States is one of the top three suppliers of defense equipment to India, but the defense equipment that Washington has sold Delhi comprises primarily one-off items, instead of multi-year big ticket items.


In the defense arena this is akin to saying that if someone has an entire house full of ready to assemble Ikea furniture and you want them to move to assembled West Elm furniture, you are attempting to institute the change simply by offering to replace single legs of furniture items like tables or chairs.


If the United States would like India to purchase more American equipment the preferable approach would be to offer entire systems which is not yet happening. Using the furniture analogy, you need to give the customer an opportunity to refurbish their entire dining room, and then if they like the product and service they may seek to revamp the living room and even the deck. 


Supporters of US-India relations always assume that if it is one thing that Americans understand it is the market. India has been in the market for a large-scale military modernization worth USD 250 billion to upgrade its old Soviet era equipment. Delhi seeks state of the art technology and equipment, at affordable prices, and offered on competitive terms. 


After moving away from purchasing exclusively from one country (former Soviet Union), India is reluctant to once again become dependent on another country. The United States has to make ‘an offer India cannot refuse’ in order for Delhi to purchase large scale American military equipment. Washington needs need to come up with a reasonable package of technology transfer along with availability of parts and future updates along the way. The U.S. also needs to exempt India from some of the restrictions put in place for those countries that only buy small quantities and small items.


If the US wants India to purchase more defense equipment this has to be a strategic whole of government decision. During the Cold War, American grand strategy centered on creating a rule based liberal order. This order rested on a diplomatic and security architecture bolstered by American allies from Europe to the Far East. The not so peaceful rise of China poses a challenge to this American order.


If, as the Trump administration has argued in recent speeches including that given by Vice President Mike Pence, the United States views China as the key threat and the US seeks to arm and bolster its friends and allies against China, then it should arm its allies against China.


With a population of more than one billion, and a decades old rivalry with China, India is the one country with sufficient manpower to match that of China.  As the world’s largest democracy with a multicultural society and expanding military heft, New Delhi has the potential to balance China’s expansion westward.


India’s antagonistic relationship with China dates back decades but it is Chinese encroachment in India’s sphere of influence - South Asia and the Indian Ocean region- that forced New Delhi to take a more active stance in containing its rival. To counter China’s strategies India has built close economic and strategic partnerships with Asian countries like Japan, the ASEAN, Taiwan and South Korea, all of whom are also close American allies. 


India’s opposition to China’s Belt and Road Initiative (BRI) is well-known including its refusal to participate in the 2017 BRI summit that took place in China. India alsosupports American and Japanese attempts to provide alternatives for infrastructure building in Asia and Africa.


India is a Major Defense Partner and has signed two of the three enabling (foundational) agreements that are required when the US sells key defense equipment to countries. India has also been given STA-1 (Strategic Trade Authorization) status by the United States that would help high-technology sales to India, especially in the defense arena.  

However, India was never a Cold War American ally and was never part of the various institutional structures, military or intelligence, like allies in Europe or Asia. 


India is also different from these traditional American allies for whom the United States was the key security provider. India wants to maintain its own security capabilities and seeks a relationship that helps build India’s resources and capabilities so that India can play the role of a security provider in the Indo-Pacific.


Helping India modernize militarily thus is a strategic decision and cannot be left, simply to business decisions of its defense companies. 


American defense companies have one large captive buyer, the United States government. Other buyers have traditionally been countries like the Gulf Arab states that purchase American equipment at any cost and terms. American defense companies thus find it difficult to deal with a country like India, that has the ability to pay for top quality military equipment but has a number of potential buyers and needs to be wooed in return.


It seems that so far, the US has not been able to find the right mix of price, quality and terms that meets India’s expectations. It is interesting that country that has the maxim ‘the customer is always right’ tends to ignore that when it comes to military sales.


Aparna Pande is Research Fellow and Director, India Initiative at the Washington-DC based Hudson Institute. Her books include ‘Escaping India: Explaining Pakistan’s Foreign Policy’ (Routledge, 2011) and ‘From Chanakya to Modi: The Evolution of India’s Foreign Policy’ (Harper Collins, 2017)