A Deepening Defense Relationship on India’s Republic Day

January 29, 2015

Earlier this week, President Obama attended India’s Republic Day celebrations as the chief guest of Indian Prime Minister Narendra Modi. This was the first time that an American president visited India twice while in office, and President Obama was the first American president to attend India’s Republic Day in this honored capacity. These facts alone speak to the importance both governments place on building the bilateral relationship.

India probably merits more attention and flexibility from U.S. officials, at least in the defense space, than most countries not in crisis. Keeping India high on the priority list, which entails devoting precious time and resources to nurturing the relationship, is no easy feat. It is nevertheless critical, since Washington views India as a possible net security provider in South Asia and the wider Indian Ocean Region, a potential balance against China, an attractive market for defense products, and a natural partner given that it is the world’s largest democracy.

The visit itself was an important deliverable, and the optics were important. Prime Minister Modi’s readiness to reiterate his stern language on the South China Sea was clearly music to U.S. officials’ ears. Personal relationships matter in geopolitics, and that is especially true with Modi, who by most accounts keeps his own counsel on many issues and consults a small coterie of advisors. His declaration that the two countries would hold more regular summits was a positive sign, as was the agreement on establishing two hotlines: one between the White House and the Prime Minister’s Office, and a second between the two countries’ National Security Advisors. In addition to creating a mechanism to increase the ease and frequency of communications, this action suggests the two leaders are building credibility with one another. That’s a good thing in general, and could be critical for de-escalating a crisis in South Asia, such as another major terrorist attack against India like the one that occurred in Mumbai in 2008.

It is impossible to separate entirely the symbolism of the visit from the substance of the deliverables that accompanied it. Avoiding the drift and disillusionment that has followed previous upswings in U.S.-India relations, however, requires turning the potential on display last weekend into real progress. There has been a history on both sides of raising expectations, only to examine the details of agreements and find them wanting. On the defense side, at least, there was one question mark and one clear victory.

The “New” New Defense Framework Agreement

As expected, the two countries used the Republic Day visit to announce an updated version of the 2005 New Framework Agreement. The agreement, which governs bilateral defense and security arrangements, was set to expire this year. It was written at a time when the defense relationship was nascent. Thus, the agreement’s expiration this year presented an opportunity to draft a new, more substantive, strategic, and forward-leaning framework. That is not easily done under any circumstances, however, and certainly not under tight timelines in advance of a Presidential visit.

It was impossible to know at the time of writing whether the final product is the type of transformative framework the relationship merits, or simply a modest upgrade, since the new agreement is not yet publicly available. This suggests the framework may not be as robust as it could, or should, have been, perhaps because of pressure from one or both sides to finalize the agreement in time for Republic Day. Or perhaps it’s not really “final.” New reports have indicated the renewed framework will support stronger military-military engagement, including deeper maritime cooperation, and increased defense trade. That all sounds great, but the devil is in the details, and we will have to wait to see what those look like once the new framework agreement is finally ready for prime time.

The Long Pole in the Defense Tent

The newly revised defense framework agreement may be a potential disappointment, but that should not detract from the other defense deliverable that came out of the Republic Day visit. The two sides reached an important breakthrough in the Defense Technology and Trade Initiative (DTTI), which has become the proverbial long pole in the U.S.-India defense tent.

Various factors have impeded defense trade, and several are worth noting here. India is seeking not only U.S. defense equipment, but also the transfer of technology used to build those systems. New Delhi views technology transfers as necessary from both a defense and economic perspective, but its insistence on these transfers makes it relatively unique among countries with which the United States conducts defense trade. In addition to the statutory limitations on sharing certain technologies, concerns exist that once India has the technology then its incentives for trade with the United States will decline. New Delhi also wants to move beyond the buyer-seller dynamic that characterizes U.S. defense trade with most countries, and toward a collaborative approach focused on co-development and co-production. That would provide U.S. businesses a slice of the Indian market. Further complicating matters, India maintains an offset policy that requires foreign industries to invest a portion of revenue gained from any sale back into India. Moreover, there are limits on total foreign direct investment, though the amount allowed has been raised under Modi. Finally, myriad bureaucratic obstacles added another obstacle.

Former Deputy Secretary of Defense Ashton Carter, who has been nominated to take over as Secretary Chuck Hagel’s successor, spearheaded a process to overcome these challenges. This led to the launch of DTTI in 2012. Since then, the United States has proposed approximately 20 projects with potential for collaboration. None of these proposals fructified until now. As part of President Obama’s visit, the United States and India announced they had identified four “pathfinder projects” for joint development and production. The projects are for the next-generation Raven unmanned aerial vehicles (UAVs), “roll-on, roll-off” intelligence-gathering and reconnaissance modules for C-130J Super Hercules aircraft, mobile electric hybrid power sources, and chem-bio warfare protection gear for soldiers. India and the United States also agreed on a working group to explore aircraft carrier technology, and the design and development of jet engine technology.

Despite the relatively modest nature of these products, several points are worth noting. First, Raven may not seem like a big deal, since it is sold to numerous countries. The value in this case comes from the agreement to co-develop the next-generation Raven, which means that U.S. companies will get a share of a market that is likely to grow in India. Second, the “roll-on/roll-off may not sound sexy, but it will make India’s existing and planned fleet more versatile by enabling the use of C-130 military transport planes for different purposes, including surveillance. The agreement also involves knowledge sharing on systems integration, which, as Josh White, a fellow WOTR contributor, pointed out at Brookings last week is what separates good industrial bases from great industrial bases.

As important as these benefits are, the bigger issue in this case was getting agreement on the projects themselves. The Indian defense establishment still has concerns about whether the United States will be a reliable long-term supplier of the high-end technology New Delhi craves. Other bureaucratic obstacles and inefficiencies continue to add complications, as do some misconceptions in India about DTTI, and questions about India’s absorption capacity for technology and capability to participate in co-design. Forging ahead provides a mechanism to begin addressing these hurdles and concerns head-on, as the two countries simultaneously explore the co-development of more high-end technologies.

Where the Rubber Hits the Road

President Obama’s attendance at Republic Day was a historic occasion, and yet another sign of a rejuvenated U.S.-India relationship. Head of state visits can help build personal relations among leaders, and send powerful messages, but these types of visits also have a way of focusing bureaucracies. This can sometimes lead officials to prioritize speed over substance. Washington will need to continue to keep its expectations realistic, and practice strategic patience. At their best, these visits can be a forcing function for real progress, creating breakthroughs like the agreement on DTTI. The two sides still need to work out the modalities, and that’s partly the point. The United States and India are playing the long game, but sometimes the rubber has to hit the road.


Stephen Tankel, Ph.D. is an Assistant Professor at American University, a non-resident scholar at the Carnegie Endowment for International Peace, and a senior editor at War on the Rocks. He has conducted field research on conflicts and militancy in Algeria, India, Lebanon, Pakistan, and the Balkans. Dr. Tankel spent 2014 serving as a senior adviser in the Office of Asian and Pacific Security Affairs at the Department of Defense. Follow him on Twitter @StephenTankel.