Keith Webster, Senior Vice-President (Defence and Aerospace), US-India Strategic Partnership Forum (USISPF), said while the Trump administration is excited about the $10-billion single-engine fighter jet deal, Lockheed Martin will not be going for full transfer of technology. In an interview with BusinessLine, he said if India decides to buy the F-16s, the first few planes will be bought off the shelf. Excerpts:
How concerned is the US with the single-engine fighter jet deal not taking off yet? There are even reports now that India may not place the order at all …
The US government has invested an incredible amount of time partnering with Lockheed Martin for F-16 and Boeing for F-18s. If one or both do not happen that will be a very big splash of cold water on our industries because of the amount of seriousness we gave into this matter and because of government time invested across multiple agencies. And this has happened across both the Obama and Trump administrations. There had been no review of decisions, no conflict between ‘Make in India’ and ‘Make in America’. We have reconciled all of that.
Do you think the real sticking point is transfer of technology (ToT)? Is it overlapping with the FDI and ‘Strategic Partnership’ policies?
Part of FDI is a challenge because OEMs need to protect their names, be it Lockheed Martin or SAAB or Rosoboronexport. You not only want to have an investment decision but more importantly you want to have a commanding say in tactics, techniques and procedures specific to manufacturing, especially aviation. This is a very serious matter to protect the certifications. For the aviation sector, the 51 per cent FDI is more about processes for manufacturing and protecting the OEM brand than it is control over technology. I think those issues are reconcilable. The big issue is resources, the money to do it. L1 is going to get you make in India. You will have to buy it off the assembly line in Texas.
So if India ever decides to buy F-16, the first ones will be bought off-the-shelf?
That is the requirement. Under the ‘Strategic Partnership’ model, 10-15 per cent can be procured from the OEM. So my understanding is, the way it will be structured is about 15-20 planes will be bought from the current production line and that will give you time to actually set up production in India and add capability to your forces.
But what about full ToT because under the SP policy OEMs cannot have 51 per cent share even if the FDI policy allows it?
It will never be full ToT. It is not in the national interest or industry’s interest. Certain technologies are not transferable to anyone in the world. Billions of dollars are spent over decades to make military-grade engines and what makes military-grade engines unique in the world is hot-sectioned technology and codings and those are crown-jewel technologies. No one is going to hand that over. So anyone who says they will is not being honest. They will not.
So how do you see a meeting ground in this with the Indian government because both Lockheed Martine and SAAB are competing for it?
I think there is a very rational understanding on what is reasonable and what is unreasonable and so the government has to decide which deal is the best deal. We are trying to meet the government’s expectation on ToT, not 100 per cent but ToT.
Coming to geopolitics, how do you see the Quadrilateral — India, US, Australia and Japan — shaping up and augmenting ties between New Delhi and Washington D.C.?
We have been talking under the radar, quietly about multilateral partnerships. So for this to go public is a very big step to me. To me it symbolises a couple of things. There is now also a real recognition that the China issue is not going to go away. Theoretically speaking, we have a more emboldened China today than it was a month ago. There has not been any demonstrative behaviour. So now we have a more open conversation about the desire to explore a possibility of a quadrilateral. We, in US, are excited about it. From the perspective of democracies, the potential of a quadrilateral is huge. But there is a willingness to have public conversation, which was not there some years ago. I think it is necessary.
But what is it that the Quadrilateral wants to achieve apart from sending signals to China obviously, which I believe the Malabar exercise has already been doing? What is the main objective of the Quadrilateral?
Initially it is about the optics, the messaging regardless of details behind it. Over time you could have a desire to see the four nations partnering in a non-operational way that is agreeable to enhance maritime domain awareness, which would be important to India considering the movements in the Indian Ocean.
On the US defence foundational pacts, is America upset that despite granting ‘Major Defence Partner’ status, India has not yet signed the CISMOA and BECA?
There is discussion going on now on how to proceed with the remaining enabling agreements, as there are now called, to move forward. This way it works for both governments. Both sides are trying to identify how to creatively approach these agreements, just like what we did in LEMOA and also how proceed in the talks under the ‘Make in India’ programme. So we are kind of bundling it.