India can achieve its goals by having JVs with foreign military supplying countries: UK official

British government cannot afford to have a programme like the ‘Foreign Military Sales’ (FMS) of the US in the defence industrial sector. The lack of economic scale for the European manufacturers for their own indigenous production of armaments and other equipment nullify the benefits that can accrue to London for supporting its businesses, thus the economy.

The FMS is really a government-aided programme for the US arms manufacturers by which the American Congress supports its own ‘military-industrial’ complex through sales of its manufactures in a government to government deal. In other words, a government of a country chooses to buy a specific equipment; identify an American company manufacturing it and then place a request with the US government to facilitate the purchase.

Alan Malapas, regional director of the United Kingdom Trade and Investment (UKTI), Defence and Security Organisation for Africa, Middle-East, Central and South Asia, said: ‘The US programme is based on their massive acquisition plan. They can tell some of their friends that we are buying 100 of these and if you buy 100 of the same, we can buy it broadly at the same cost with administration charges, it can work for both of us. They can thus dominate the market.’

Asked about the huge cross-holdings of the arms manufacturing Western multi-national companies amongst themselves, Malapas said, ‘We have got a collaborative approach, by which we have a partnership with our industries. India can achieve its goals by partnering with some of these countries, by having joint ventures (JVs) with leading Indian companies. You can gain through technology transfers.’

He emphasised the point that these JVs can work through by India identifying crucial technologies and ‘incentivising’ the MNCs through the offset process and the like.

The British trade representative said that the recent change in investment policies in Indian of having a case-by-case examination of the foreign companies bidding for a 49 per cent share in joint ventures with Indian companies ‘can work.’