Geography Reference
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Dassault of France's Rafale fighter, on an $11bn-plus contract for 126 multi-role combat
aircraft, defeating both American and Russian contenders and boosting France's role.
The total US order book of concluded or pending deals by mid-2013 amounted to nearly
$11bn, 24 which will probably make it the third-biggest supplier. It delivered virtually noth-
ing between 1964 and 1986 and then only tiny amounts till 2006, because it was boycot-
ting India for the supply of lethal and technologically sensitive items. It is now picking up
from just over one per cent between 1950 and 2012 to around two per cent to three per
cent in the last two or three years following a New Framework for India-US Defence Rela-
tionship that was agreed in 2005. India is, however, still wary of buying essential equip-
ment from America because of the risk that supplies would be stopped if Washington dis-
approved of something India had done, for example in the development of nuclear arms.
This may have affected decisions in 2011 on the big fighter contract, where Boeing and
Lockheed Martin's aircraft were rejected, much to America's amazement and annoyance
(though its Boeing and Lockheed fighters were said by experts to be inferior to the short lis-
ted European jets). 25 The 2005 agreement led, in 2009, to a $2.1bn contract for eight Boe-
ing P-81 maritime surveillance aircraft and a $1bn deal for six Lockheed Martin C-130J
Hercules military transport aircraft 26 - neither of them seen as being essential as fighters
and hence not so sensitive in terms of availability of spares - and ten Boeing C-17 Globe-
master heavy lift transport aircraft for $4bn.
The public sector has become increasingly dependent on imports for its supposedly
India-based manufacturing and assembly projects. Many DPSUs and ordnance factories
order components quietly from abroad and cloak them in apparently Indian-made defence
equipment - as was illustrated by the Tatra truck story. That enables them to avoid having
to develop their own technologies and opens the door for them to accept foreign bribes.
'We are manufacturing high-end products like SU 30 MKI, Brahmos and Scorpene subs,
but these are licensed productions of foreign-designed weapons, and even here we know
that key assemblies will be imported till the very end of the programme,' says Manoj Joshi,
referring to Russian Sukhoi aircraft, Indo-Russian Brahmos missiles and French Scorpene
submarines. 27 The DPSUs then charge the defence forces much higher prices than they
have to pay their foreign suppliers, thus increasing their profits. 'There is evidence which
seems to suggest that the DPSU managers were actually going out of the way to serve the
interests of the foreign company, rather than the company they headed,' wrote Joshi. 28 'In-
siders will tell you that this is not as uncommon a phenomenon in our DPSUs and ordnance
factories as it may seem.' Another expert describes many DPSUs as 'traders not manufac-
turers'.
This poses the question, why such a situation has been allowed to continue for so long.
The immediate answer is that the characteristics of jugaad and chalta hai provide the cover
for the powerful defence establishment's vested interests to maintain the status quo and en-
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