Complicated Partnership India Faces a Tough Choice in Finalising Its Future Submarines Fleet

EDITORIAL

BUSINESS AND POLITICS OF ARMING INDIA APRIL 2021

Complicated Partnership India faces a tough choice in finalising its future submarines fleet

APRIL 2021 1 BUSINESS AND POLITICS OF ARMING INDIA

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n the ‘blow hot-blow cold’ relations between India and Pakistan, unpredictability leaves one gasping I for breath. This unpredictability was on full display late last month, just when it appeared there is absolutely no possibility of any kind of engagement, the neighbours have pulled a surprise. When none expected it, the armies of the two nations issued a joint statement reiterating their commitment to the 2003 ceasefire agreement along the Line of Control between the Union Territory of Jammu and Kashmir and Pakistan-occupied J&K. The real motivations or reasons behind the ceasefire is less important than the opportunity it offers to both the countries, especially Pakistan, to step back from the unsustainable, unachievable, and unrealistic wish-list it had put forward for re-engaging with India. The maximalist stand taken by Pakistan has always remained a diplomatic dead-end, and the ceasefire offers it a way out. If anything, it is yet again an opportunity for Pakistan to revisit and reverse its policies vis-a-vis India — State-sponsored terror, fanning Kashmir insurgency, and a host of other issues. Pakistan has extremely limited options and even these are lost to it because of the strident policy, posturing, and grandstanding it does against India. In the process, Pakistan harms itself more than it harms India. Over the last seven decades, Pakistan has tried various options, and come a cropper. Most of those options are no longer available. Even those which might still be available yield diminishing returns. Pakistan has tried open wars in the past. Not only did that option fail spectacularly, but it also damaged Pakistan so badly that it never recovered from those setbacks. For instance, the 1965 war ended the economic boom and since that fateful war, Pakistan’s economy has steadily lost steam, and is today the sick man of South Asia. The 1971 war ended up leaving a rump Pakistan. The 1999 Kargil conflict, although a limited war, destroyed Pakistan’s image and credibility completely. Pakistan is seen as a dangerous and an adventurous country that was not only using terrorists as strategic assets but also taking the region to the brink of nuclear catastrophe. Since then, war, even a limited one, is no option at all, certainly not in a nuclearised environment. Plus, even if a war does not turn nuclear, it entails costs that will completely devastate Pakistan’s already ailing economy. Wars simply cannot be waged on an empty treasury. Even proxy war (read terrorism) is no longer a sustainable option. When Pakistan unleashed Jihadist terror on India, it was supposed to be a low-cost high-yield operation. But nearly three decades later, it is too costly and poor return on investment for Pakistan, and as such has run its course. Persisting with it will only yield even further diminishing returns. Over the last 30 years, the terrorism infrastructure Pakistan built to hurt India has imposed an immeasurably high cost on Pakistan in terms of loss of image, reputational damage, the uncertainty caused to business and investment climate, the wave of extremism and domestic terrorism it unleashed. Since 1990, when Pakistan started exporting terrorism to India, the trajectories of the two economies have been poles apart. While India has managed to achieve high growth, Pakistan has been languishing, caught in a low growth trap. The economic differential between the two countries has widened to a point where in some years merely the increase in India’s defence budget was greater than Pakistan’s entire defence budget. Cut to the chase, terrorism might have bloodied India, but it hurt Pakistan in unimaginable ways, not just economically, but also socially, culturally, and politically.

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APRIL 2021 3 CONTENTS

CHAKRAVIEW Break from the past or yet another false dawn? If indeed Pakistan is now going to be making policy not on emotional but rational basis, then not only should Pakistan be encouraged, but this positive change must also be reciprocated and engaged, especially by India. P9

Submarine project: How to catalyse India’s Difficult choices to make Defence Research and for Indian Navy Development The private sector defence firms have, for long, railed against the GoI’s practice of arbitrarily awarding India’s underfunded defence R&D and low overall contracts to the DPSUs through nomination. This, researcher density have resulted in India being real or perceived bias, to privilege the interests unable, thus far, to develop any breakthrough military of the DPSUs over those of the private sector, has technology or weapon system and remains among the engendered within the private sector, a hesitation to largest importers of military equipment in the world. commit large investments in capital-intensive defence P18 manufacturing P13 China posturing in South China Sea: Vietnam should lead response There is a need to mitigate the aggressive Chinese Posturing in the South China Sea by all the peace- loving nations in the region. P21

4 APRIL 2021 MARITIME AFFAIRS

Suez Canal takes centre stage for maritime security challenges

By Commodore S. L. Deshmukh and the Red seas. The Suez Canal which separates the African continent from Asia provides the shortest wisting a dictum a bit one could say “One who maritime route between Europe and the areas around T rules the Suez rules the world (trade)”. The mishap the Indian and western Pacific oceans. Suez, one of which occurred in Suez Canal has proven its sensitivity the world’s busiest shipping lanes annually handles and importance. approximately 1139 million MT of the global trade World trade worth 1 Trillion USD passes through (Smith, 2021) including petroleum products. Prior Suez Canal annually (Topham, 2021). The blockage to its construction, which was completed in the year of the canal due to ship running aground has affected 1869, the only important settlement around was Suez world trade and has had an impact on the prices which had 3,000 to 4,000 inhabitants then. Most of including petroleum products. the towns along the canal have developed since, with a notable exception of Al-Qanṭarah. Suez Canal- A historical Perspective The Suez Canal extends 193 km covering Port Said (Būr Saīd) in the north and Suez in the south. It has Suez Canal alias ‘Qanāt al-Suways’ in Arabic, is a dredged approach channels north of Port Said, into vital sea-level waterway. It runs north-south across the the Mediterranean, and south of Suez. Interestingly Isthmus of Suez in Egypt to connect the Mediterranean this canal does not use the shortest route across the

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isthmus, which is only 121 km (75 miles). Instead of that isthmus comprises marine sediments, coarser sands, and canal utilizes several lakes-from north to south, Lake gravels deposited in the early periods of abundant rainfall, Manzala (Buḥayrat al-Manzilah), Lake Timsah (Buḥayrat Nile alluvium (especially to the north), and windblown al-Timsāḥ), and the Bitter Lakes—Great Bitter Lake (Al- sands (Smith, 2021b Buḥayrah al-Murrah al-Kubrā) and Little Bitter Lake (Al- Buḥayrah al-Murrah al-Ṣughrā). Shortening of Sea Route The Suez Canal, a novel feat of engineering, is an open cut and is without locks. Though the canal uses extensive Benefits of the Suez Canal would we evident from the straight stretches it has eight major bends. To the west of fact that before commissioning of the Canal ships from the canal is the low-lying delta of the Nile River and to the the UK to Gulf had to cover 20,900 Kms and the needed east is the higher, rugged, and arid Sinai Peninsula (Smith, average of 24 days of transit which came down to 12000 2021a). Kms and 14 days respectively, a saving of 43% in terms of distance with associated saving in fuel burn and CO2 Some Interesting Facts emissions. The ships transit through the Canal in 11-16 hrs (Smith, 2021c). The Isthmus of Suez, the sole land bridge between the continents of Africa and Asia, is of relatively recent Capacity geologic origin. Topographically, the Isthmus of Suez is not uniform. The area has three shallow water-filled In its first year of operation (1870), the canal handled depressions: Lake Manzala, Lake Timsah, and the Bitter 486 transits i.e. fewer than 2 per day. In 1966 this had Lakes; though distinguished as Great and Little, the Bitter increased to 21,250 transits at an average of 58 per day, Lakes form one continuous sheet of water. A number of with net tonnage increasing from some 444,000 metric limestone and gypsum band obtrude in the south of the tons (437,000 long tons) in 1870 to about 278,400,000 isthmus. Another significant feature worth mentioning metric tons (274,000,000 long tons). As ships started relates to a narrow valley leading from Lake Timsah south- becoming bigger the number of transits started reducing westward toward the middle Nile Delta and Cairo. The and by mid-1980 daily transits had come down to an

6 APRIL 2021 MARITIME AFFAIRS average of 50, but net annual tonnage went up to about blockage many times in its long history, sometimes shutting 355,600,000 metric tons (350,000,000 long tons). Now down for hours, days, weeks or — in one case— eight years. the canal handles approximately 18,174 transits in a year, In 1937, the U.K.-bound ship Viceroy of India ran aground, with a net annual tonnage of about 1,139,630,000 metric causing a holdup for its 700 passengers and the vessels tons (1,121,163,000 long tons). From this data, the increase behind it. It shut down “all shipping” for a time. She was in utility and importance of the canal becomes very evident re-floated after part of the cargo was unloaded and Canal (World Shipping Council, ND). became operational. A British freighter, the Lord Church, ran aground in Blockage of Channel by Ships Running September 1953, holding up six following ships and a year Aground later a 10,000-ton tanker called the World Peace struck a railway bridge, causing another traffic tie-up. The World The canal was opened for operations, under French Peace, owned by a Greek company headed by the brother- control in November 1869. The opening ceremonies in-law of Aristotle Onassis, managed to block the canal in began at Port Said on the evening of 15 November, with 1955. More than 200 ships were forced to anchor while the illuminations, fireworks, and a banquet. On the morning problem, which was dealt with in three days. of 17 November, a procession of ships entered the canal, One year later (Oct 1956), Egypt sparked a brief war headed by the L’Aigle including ship ‘The Newport’. The when President Gamal Abdel Nasser nationalized the Newport was involved in an incident that demonstrated canal, which until then had been controlled by British some of the problems with the canal. There were some and French interests. Britain, France and Israel attacked rumblings that the depth of parts of the Egypt in retaliation. This ‘Suez Crisis’ canal at the time of the inauguration Benefits of the Suez as it became known was resolved was not as good as promised. It was Canal would be evident in November by a United Nations also feared that the deepest part of the peacekeeping force. channel was not always clear, leading from the fact that before After that in Aug 1957, a 9,000-ton to a risk of grounding. The first day of commissioning of the Canal, tanker called the Barbaros ran aground, the passage ended at Lake Timsah, 76 ships from the UK to Gulf damaged its rudder and held up traffic kilometres (41 nm) south of Port Said. for nearly a day. had to cover 20,900 km and The French ship Péluse anchored close to the entrance, then swung around the needed average of 24 The stranded ‘Yellow Fleet’ and grounded, the ship and its hawser days of transit which came blocking the way into the lake. The down to 12,000 km and 14 A decade later, at the outbreak of the following boats had to anchor in the 1967 Arab-Israeli war — also known as canal itself until the Péluse was hauled days respectivel the Six-Day War — Egypt closed the clear the next morning. This is the Suez Canal to international shipping first recorded instance of the Canal traffic. More than a dozen cargo ships blockage. were stranded partway along the canal route for eight Between 1870 and 1884 some 3,000 groundings of ships years. The canal reopened on June 5, 1975, with a ceremony occurred because of the narrowness and tortuousness of attended by Egyptian President Anwar Sadat. Another the channel. Major improvements began in 1876. After grounding was reported in 2016 and a multi-ship collision successive widenings and deepenings, the canal, by the in 2018, which blocked the Suez Canal (CBC Report, 2021). 1960s, had a minimum width of 55 metres (179 feet) at a depth of 10 metres (33 feet) along its banks and a channel Latest Incident depth of 12 metres (40 feet) at low tide. Also in that period, passing bays were greatly enlarged and new bays In the latest incident Massive container ship, owned by constructed, bypasses were made in the Bitter Lakes and a Japanese company ran aground in Suez Canal, blocking at Al-Ballāḥ, stone or cement cladding and steel piling for the world’s busiest shipping route. The ship MV Ever Given bank protection were almost entirely completed in areas is 400 metres (1,300ft) long, wedged diagonally across a particularly liable to erosion, tanker anchorages were canal not much more than 200 metres (656ft) wide. This deepened in Lake Timsah, and new berths were dug at Port ship kept around 300 ships waiting. Said to facilitate the grouping of ships in convoy. As per reports, the Suez Canal stood blocked in both directions for traffic till 29 Mar 2021, by the ultra-large Other Instances of Canal Blockage Golden-class container ship MV Ever Given. The ship, operated by Evergreen Marine, was en-route from Malaysia The Suez Canal has since then witnessed trouble of to the Netherlands when it ran aground reportedly after

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a strong gust of wind blew the ship off course. Upon shipping lines to maintain stability in freight rates during the running aground, Ever Given turned sideways, completely period of this crisis. It was noted the situation is temporary blocking the canal. Although part of the length of the canal and is unlikely to have a long-lasting impact. Shipping lines is paralleled by an older narrower channel, which can still have been advised through the CSLA to explore the option be used to bypass obstructions, this particular incident of re-routing of ships via the Cape of Good Hope. It was happened in a section of the canal with only one channel. pointed that such re-routing usually takes 15 additional A group of tugs, positioned on both sides of the ship could days’ time. re-float Ever Given using tugs and the ship moved off the The government expects that post clearance of blockage; sandbanks of the canal. some bunching may take place, especially at the ports of JNPT, Mundra and Hazira. The ministry of ports, shipping Impact of Suez Canal Blockage on world and waterway has assured to issue an advisory to these Economy ports so as to gear up arrangements and ensure efficient handling during the forthcoming busy period. As per the It has been reported that the blockage is going to have Centre, this backlog should take about a week’s time to clear an impact on cargo schedules around the world. Shipping out (Business Today, 2021). companies are also considering diverting their ships along the much longer route around Cape Agulhas. The first Some Suggested Measures to Avoid Marine container ship to do so is Ever Given’s sister ship, Ever Mishaps Greet. Many economists and trade experts have commented on The National Transportation Safety Board, in its 2016 the effects of the obstruction if not resolved quickly. It has Safety Board’s Safer Seas Digest, has tabulated the results been observed that the incident is likely to have a drastic of its investigations of major maritime accidents that have impact on the global economy because of the trapped goods. occurred in recent years. The publication was created Among the products, oil shipments are the most affected in to help mariners working at the deck plate level prevent the immediate aftermath, due to a significant amount of the future accidents and tragedies, and also help maritime remaining blocked with no way to reach their destination. executives develop and maintain a workplace environment of safety at sea. The document provides many valuable Impact on India and Action Plan conclusions and lessons learned from the 27 investigated Centre chalks out four-point plan to deal major maritime accidents and covers 10 different problem categories, all of which emphasize the multi-pronged with Suez Canal blockage threat that exists to transportation safety on the high seas As seen from the above, over 300 vessels are waiting (Scott, 2017):- on the North and South sides of the Suez Canal and about A. Fatigue-The NTSB report indicates that fatigue is one of 100 vessels are getting added to the queue on a daily basis. the most common reasons for transportation accidents This route is used for Indian exports or imports worth and reducing this cause should be a top priority for the $200 billion to or from North America, South America and mariners. Europe. This is expected to have an appreciable impact on l Standard Maintenance and Repair Procedures-NTSB the Indian economy. has recommended strict standardized procedures Appreciating the situation, the Central Government of involving testing, repair and maintenance of equipment. India has chalked out a four-point plan to deal with the Suez l Use of Medication While Operating Vessels- NTSB Canal blockage. This plan, prepared by the logistics division has cautioned that mariners should consult with an of the commerce ministry, comprises prioritisation of cargo, appropriate medical professional prior to using any type which will be done in order to ensure timely movement of of medication, whether over-the-counter or prescribed, perishable cargo. as use of certain medications by credentialed mariners “FIEO (Federation of Indian Export Organisations), may disqualify them from operating a vessel. MPEDA (Marine Products Exports Development Authority) l Operational Testing Procedures- Report recommends and APEDA (Agricultural and Processed Food Products that standardized procedures should always be used Export Development Authority (APEDA) will jointly when testing equipment. All sensors and alarms within identify cargo particularly perishable cargo for priority vessels should be tested routinely to verify the reliability movement and work with the shipping lines for the same,” of their operation and their capability of providing a commerce ministry statement said. adequate warning to crew members. The CSLA (Cargo Intelligence Security and Logistics l Familiarization with Local Recommendations- It’s Associations) assured the freight rates as per existing important for vessel operators to have familiarity with contracts will be honoured. A request has been made to the and heed the recommendations of local specialists in

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In the latest incident, a massive container ship, owned by a Japanese company, ran aground in the Suez Canal, blocking the world’s busiest shipping route. The ship MV Ever Given is 400 metres (1,300ft) long, wedged diagonally across a canal not much more than 200 metres (656ft) wide. This ship kept around 300 ships waiting

the maritime industry as well as pertinent publications, outcomes. including the Coast Pilot and others. Failure to do so l Access to High Risk Spaces-The NTSB emphasizes the may result in unnecessary accidents. importance of high risk spaces, in particular those with l Underestimating Strong Currents- Mariners can face hull penetrations, remaining freely accessible. If these significant challenges when operating in high water spaces are blocked, a safety hazard exists and operators with currents that are more powerful than normal. may be hindered from responding to flooding and other Under such conditions, the ability to manoeuvre may types of emergencies when and if they occur. be diminished significantly and the risk of parting Author is aware that a detailed investigation of the lines or dragging anchor may be increased. It’s vital for circumstances leading to grounding of MV Ever Given operators and owners to encourage their mariners to is necessary to determine exact causes and the remedial properly assess dangers, and remain aware of prevailing measures. conditions. As well, they must take into consideration the guidance of authoritative entities such as the Coast Conclusion Guard – and from this information takes steps to minimize risks. In particular, the “down streaming” Suez Canal is important for the passage of world trade manoeuvre often performed by inland towers is risky valued at 1 Trillion USD. Any disruptions to the free flow when strong currents are present. Same precautions of trade in the canal can have a serious impact on the world apply to strong wind conditions. and national economies. Learning from this incidence some l Bridge Resource Management When pilots are faced measures could be put in place: with limited reaction times and hazards are close at a. Familiarisation of crews of ships passing through the hand, it’s important to have all possible resources Canal with environmental conditions. available for use in order to help ensure the safe b. Pilots observing extra precautions while guiding extra- operation of vessels, including human resources and large ships. equipment. The utilization of these resources falls under c. Promulgation of Standard Operating Procedures for the Bridge Resource Management. safety of ships while transiting the canal. l Proper Safety Equipment- It’s vital that owners, d. Promulgate lesson from this particular incident for the operators and crewmembers of a vessel do their part future. to ensure the proper maintenance and functioning of e. Exploring the feasibility of having alternate bypass routes safety equipment on the vessel. to avoid such situations. l Distractions- NTSB advises minimising distractions as it concerns safety improvements. Although it is necessary (The writer has served Indian Navy for 32 years, is for operators to communicate with dispatchers and crew a Mechanical Engineer is specialised in both Marine members as well as conduct other work duties involving & Aviation domains. Published in arrangement with the checking of equipment and instruments, anything Defence Research and Studies. The article is available on that hinders proper vessel operation can result in tragic dras.in)

APRIL 2021 9 CHAKRAVIEW

Break from the past or yet another false dawn?

By N. C. Bipindra modern, tolerant, progressive, enlightened state, at peace with itself and with its neighbours. he speech of Pakistan Army Chief Gen. Qamar Bajwa The tectonic shift in the Pakistani establishment’s T at the inaugural Islamabad Security Dialogue has worldview from geo-politics and geo-strategy to geo- caused considerable excitement, not just in Pakistan but economics is, according to Gen. Bajwa, not the result of also in the region and beyond. any internal or external pressure, rather it is a rational Taken purely at face value, the speech marks an almost choice that is being made. 180-degree turn in the security and foreign policy doctrine If indeed Pakistan is now going to be making policy of Pakistan’s all-powerful military establishment. not on emotional but rational basis, then not only should While Gen. Bajwa covered an enormous amount of Pakistan be encouraged, but this positive change must ground in his address, what was most notable was that also be reciprocated and engaged, especially by India. his speech signalled that the Pakistani state was all set to Although Gen. Bajwa has denied any pressure that make a complete break from the disastrous security and prompted Pakistan to change its strategic outlook, the foreign policies of the past and march into the future as a fact of the matter is that Pakistan is being forced by

10 APRIL 2021 CHAKRAVIEW circumstances – economic, strategic, political, diplomatic, Pakistan’s geo-strategic location and how “stable Indo- and even military – to relook and reorient its strategy. Pak relation is a key to unlock the untapped potential of That this is a rational choice to make is a no-brainer. South and Central Asia by ensuring connectivity between Any and every objective assessment of the existential East and West Asia.” challenges that Pakistan faces – no, India is not an Pakistan has for long harboured ambitions and dreams existential threat to Pakistan, only a bugbear or bogey used of being the bridge between West, Central and South Asia. for the protection of the military establishment’s political But having severed contacts with India, Pakistan was a interests – will inform Pakistan’s policy makers that there bridge to nowhere, its geo-strategic location was worth is no way they can meet these challenges if they stick to the nothing to nobody without connectivity to India and old strategic template. beyond. But the new strategic template, especially the one After all, if Pakistan were to connect East and West Asia, outlined by Gen. Bajwa, is workable only as a complete it wasn’t possible without India. Pakistan could become package. It is not an a-la-carte menu of options in which a trade and transit hub only if it offered connectivity to Pakistan can pick and choose some parts – connectivity, the soon-to-be third largest economy in the world with regional integration, emerging as a trade and transit hub – a market of 1.3 billion people. Without this connectivity, and reject other parts like normalisation of ties with India, why would anyone want to invest anything in Pakistan? helping to restore sustainable peace in Afghanistan and The tyranny of economic realities and logic seems to have putting its own house in order by eliminating the terror focused the minds of the real power centre in Pakistan to infrastructure. reach out to India. Encouragingly, Gen. Bajwa has shown Perhaps, it is this realisation that has also forced Gen. a fair degree of realism by not making engagement with Bajwa to make Pakistan start climbing down on India. India contingent of unrealistic and unacceptable pre- Clearly, Prime Minister Imran Khan’s policy on India had conditions that people like Imran Khan have been making. pushed Pakistan into a cul-de-sac. For instance, in his speech Gen. Bajwa did not demand The knee-jerk reaction of Imran Khan after the a reversal of the constitutional reforms in Jammu and constitutional changes in the erstwhile state of Jammu Kashmir; nor did he refer to India’s acceptance of the now and Kashmir in August 2019 - downgrading diplomatic almost defunct UN resolutions on Jammu and Kashmir as relations, breaking off trade and travel, indulging in the the only way forward. most undiplomatic rhetoric (almost bordering on being While he did mention Kashmir and insisted that the abusive), unleashing in vile propaganda campaigns issue needed to be resolved through peaceful means, all he against the Indian government, state, and society – was wanted was for India to create a conducive environment not sustainable or even tenable. in Kashmir so that there could be resumption in the peace In fact, it proved counterproductive as Pakistan ended process and a meaningful dialogue could commence. up tightening its own nose to spite India’s face. Within Although Gen. Bajwa did not specify what exactly he weeks of severing trade, Pakistan realised it desperately meant by conducive environment, he most likely was not needed life-saving drugs from India and was forced to eat alluding to reversing the constitutional changes in the humble pie. newly formed Union Territory. To do so would be a deal Inflation spiked in Pakistan because shortages of food breaker as far as India is concerned, and surely Bajwa and could no longer be met by cheap and quick imports from his associates know that. India. A bigger problem was the cotton crisis. The cotton Most probably, the Pakistanis are looking for some crop has failed in Pakistan and output has fallen by almost cosmetic actions by India that give the Pakistanis the fig 40 per cent. leaf they need to re-engage India. Perhaps some of these Normally, Pakistan would make up any cotton shortfall steps are already being discussed, or may even have been by importing raw cotton from India. But with trade decided, in the back channel that is reportedly operational banned, Pakistan was forced to import cotton from other between the Indian civilian establishment and Pakistani places at high cost. military establishment. The same was the case when wheat and sugar ran short, In other words, the choreography of engagement is and Pakistan was forced to import these commodities being worked out behind the scenes and some kind of at remarkably high prices. The resulting price spike had understanding has already been reached and Gen. Bajwa massive political repercussions, not just on the government was only setting the stage for the next scene of this but also on the military establishment, which had installed choreography. the government in office. If indeed some kind of back channel is operational – The trade aspect, though important, paled in front of reports in the Indian media have in fact claimed high level the other more serious implications of maintaining hostile contacts between the two countries – then it means India relations with India. In his speech, Gen. Bajwa spoke about too is ready to give peace yet another chance.

APRIL 2021 11 CHAKRAVIEW

engagement could lead to, as also India’s fall-back options in the event this process ends like others before it has.

There is no romanticism or nostalgia guiding India, only pure and simple national interest. And yet, there will be no dearth of skeptics who will scoff at what Bajwa said and oppose India re-engaging Pakistan. After all, there have been plenty of false dawns in the past. On so many earlier Most probably, the Pakistanis are looking occasions, Pakistani leaders, both civilian and military, for some cosmetic actions by India that give have said somewhat similar things, but never really delivered on what they promised. the Pakistanis the fig leaf they need to re- But harbouring skepticism might not altogether be such engage India. Perhaps some of these steps a bad thing, for one, it keeps expectations low, there is a are already being discussed, or may even greater sense of realism about what is possible and what have been decided, in the back channel that is not. No one expects any big-bang solution. This allows for a step-by-step approach and incremental progress that is reportedly operational between the Indian steadily builds confidence as things move forward. civilian establishment and Pakistani military For another, skepticism means that no one will take establishment. anyone or anything at face value alone. Every move, every promise, every agreement will be verified on ground. This means chances of breach of trust that leads to even greater bitterness and ingrains a sense of betrayal will be reduced India will of course not be entering into talks with to a minimum. Pakistan with eyes closed. Nor will there be any blind faith Having suffered Pakistan’s perfidy in the past, a step- placed on Pakistan’s bona fides going into negotiations. by-step approach suits India. There is no cost attached to But like Pakistan, India too probably senses that a point India re-engaging Pakistan and testing Gen. Bajwa’s new of inflexion has been reached and it suits her to use the approach. To not reciprocate to Gen. Bajwa’s overtures will opportunity to try and explore if some kind of a stable make India look churlish and open India to unnecessary, solution can be worked out with Pakistan. even gratuitous, criticism from the international After all, the Pakistani economy shows no sign of community, including from some of India’s friends, allies, recovery and no one, not even the Chinese are ready to and partners. pump in the money Pakistan needs. The IMF is imposing On the other hand, if despite her skepticism, India agrees onerous conditionalities that will only add to Pakistan’s to engage Pakistan, it will bring all sorts of diplomatic existing economic difficulties. dividends and defuse some of the hostile and vile Internally, the political situation is disturbed, which propaganda being carried out against her by busybodies is being made worse by the economy not picking up. in the West. Internationally, apart from China, Pakistan’s relations The world is not interested so much in the pace or with almost all of its benefactors – Saudi Arabia, UAE etc. quantum of progress that in the bilateral relations between – have deteriorated. India and Pakistan, as it is in the mere fact that the two The Afghan endgame is very delicately poised and could countries are having a dialogue and engaging each other go either way, with serious consequences for Pakistan. diplomatically and not militarily. The US isn’t exactly falling over itself to once again make That India will be extremely wary of Pakistan is a given, Pakistan its “most allied ally”. If anything, Pakistan fears and no one will hold that against her. But everyone will getting crushed in the strategic contest for supremacy welcome even the small steps that both countries take as between the US and China. they move forward. The way India will look at it is great, if Articles in New York Times or debates in the UK the Pakistanis are genuine about reforming and cleaning Parliament are not exactly going to give Kashmir to up their act, if the Pakistanis revert to form, and once Pakistan. With India in the UN Security Council until again try to stab India in the back, it will give India yet 2022, there is not going to be anything Pakistan will get another chance to expose Pakistan before the international from that quarter. community. Now if that is not win-win, what is? The emergence of the Quad has also signalled to Pakistan that the new strategic alignments are not exactly going in (The writer is Editor of Defence.Capital magazine and its favour. Therefore, behind India’s decision to engage Chairman, Law and Society Alliance, a Delhi-based think- Pakistan lies a cold-hearted assessment of what this re- tank)

12 APRIL 2021 CAPITAL PROCUREMENT

Submarine project: Difficult choices to make for Indian Navy

By Commander S. Shrikumar

he Government of India (GoI), in August 2020, T announced a ‘negative list’ of defence equipment. The 101 equipment on the Ministry of Defence’s (MoD) ‘negative list’, can no longer be imported and, would henceforth, need to be procured only from domestic manufacturers – private sector defence firms and the Defence Public Sector Undertaking (DPSUs). This latest policy announcement is an adjunct to earlier policy initiatives – rolled out over the past several years by the GoI. Collectively, the policies aim to accelerate India’s objective of attaining self-reliance in defence needs. While the policy announcements have succeeded in creating an air of expectation and optimism in the DPSUs and the private sector defence firms, very little actual headway has been made on the ground by way of an award of any significant breakthrough contract(s). ‘Conventional submarines’ are listed at serial 80 of the negative list. The GoI/MoD is prepping, to soon issue a Request for Proposal (RFP) for the long-anticipated, USD 7 billion contracts for the construction of six, new- generation conventional submarines at an Indian shipyard – in collaboration with an overseas Original Equipment manufacturer (OEM). The project has been christened – Project 75 (India) – P-75(I). The RFP for the project will be issued to two Indian shipyards already selected as ‘Strategic Partners’ for the construction of conventional submarines – the DPSU Mazagon Dock Shipbuilders Limited (MDL) and the private sector shipbuilder Larsen & Toubro.

APRIL 2021 13 CAPITAL PROCUREMENT

Once the RFP for P-75(I) is issued, it could be the first now be relaxed, consistent with the GoI’s recent revision in project to be undertaken under the ‘Strategic Partnership the policy to allow higher Foreign Direct Investment (FDI) (SP)’ policy promulgated by the GoI in 2016. in the defence sector. The Strategic Partnership policy envisages, for now, the se- The principal criteria for the selection of OEMs would be lection of Strategic Partners (SPs) only in the following seg- the conformity of their products’ capabilities with the Ser- ments: Fighter aircraft, Helicopters, Submarines, Armoured vices’ Staff Qualitative Requirements (SQRs) and the OEM’s Fighting Vehicles (AFVs) and Main Battle Tanks (MBTs). commitment to providing transfer of technology together The Indian firm selected as the Strategic Partner will be with an initial period of handholding to enable technology required to tie-up with one of the shortlisted foreign OEMs assimilation by the SP with a view to maximising indigenisa- for the manufacture of equipment belonging to one of the tion. To maintain transparency of the process, the selection above segments. of the SP and the foreign OEM partner would be undertaken The SP model is intended to catalyse indigenous capability in parallel, through a competitive bidding process. in the manufacture of major defence equipment. The DPP, The Indian SP would need to meet minimum requirements therefore, stipulates that the designated SP should be an related to infrastructure, technical capabilities, and Indian company owned & controlled by resident Indian financial strength. The shortlisted candidate Indian SPs citizens. The majority in the SP’s board of directors, would be issued RFPs along with a list of potential OEMs. including the CEO, should be resident Indians and a The candidate Indian SPs would be required to coordinate minimum of 51 per cent of the SP’s equity must be held with with the OEMs and submit a response. resident Indians. This cap of 49 per cent FDI in the SP could Field trials would then be undertaken for the equipment

14 APRIL 2021 CAPITALUNMANNED PROCUREMENT WARFARE

with some tough choices and difficult questions in selecting the most suitable SP – OEM combination from among the available options.

MDL – Strategic Partner of Choice?

MDL has, over at least the last three decades, invested heavily in building infrastructure and expertise for the construction of conventional submarines. It has previously built, for the Indian Navy, two conventional submarines -Type-209 design of HDW, Germany. MDL is currently building six Scorpene-class submarines under Project P-75 with assistance from Naval Group (NG), France (Status: of the six submarines contracted, two have The private sector defence firms been delivered). The project is running behind schedule and have, for long, railed against the delivery of the sixth & the last submarine of the series, the GoI’s practice of arbitrarily originally to have been delivered by 2016, is now expected to be delivered by 2022. Even if the delivery of the sixth & final awarding contracts to the DPSUs submarine is delayed beyond 2022, it is almost certain that through nomination. This, real it will still be completed before the award of the contract for or perceived bias, to privilege the the new P-75(I) project. On average, it takes two and a half interests of the DPSUs over those of to three years after the issue of a RFP for a contract to be awarded. For contracts of the value envisaged for P-75(I), it the private sector, has engendered takes longer (case in point – the time taken for the award of within the private sector, a hesitation the order for MMRCAs for the Indian Air Force). to commit large investments MDL and NG, France have tied-up/are expected to tie-up in capital-intensive defence and jointly bid for the P-75(I). Awarding the P-75(I) contract to the MDL-NG pairing will enable the most effective manufacturing. utilisation of the infrastructure and expertise developed for the ongoing construction of six Scorpene submarines. MDL- NG, by the end of the Scorpene construction programme, will also have developed a good working relationship and that will only facilitate increased efficiency of performance during the execution of the P-75(I) project. In the event that the MDL – NG partnership fails to that meet the technical requirements of the RFP. The win the P-75(I) contract, the infrastructure and expertise commercial bids of the firms, whose equipment qualify developed during the Scorpene construction will essentially field trials, would then be examined to identify the lowest be, for the most part, left to lie idle. Undoubtedly, Scorpene (L1) bidder – who would then qualify to be designated as submarines will need to sail to MDL for repairs, refits, Strategic Partner’ for that particular segment. and modernisation – however, it will still be sub-optimal The Strategic Partners selected for P-75(I) -- Mazagon utilisation of the physical infrastructure and specialised Dock Shipbuilders Limited (MDL) and Larsen & Toubro technical expertise acquired by MDL at great cost. (L&T) -- can choose to collaborate with any of the five overseas OEMs shortlisted for P-75(I) -- Rubin Design ‘Nomination’ – Prudent Practice? Bureau of Russia, Naval Group (NG) of France (formerly DCNS, France), Navantia of Spain, ThyssenKrupp The private sector defence firms have, for long, railed Marine Systems (TKMS/HDW) of Germany and Daewoo against the GoI’s practice of arbitrarily awarding contracts Shipbuilding & Marine Engineering of South Korea. to the DPSUs through nomination. This, real or perceived The Rubin Design Bureau is offering the Amur 1650 bias, to privilege the interests of the DPSUs over those of the submarine, NG, France is offering the Scorpene AM-2000, private sector, has engendered within the private sector, a Navantia the S-80-class submarine, TKMS its HDW class hesitation to commit large investments in capital-intensive 214 and Daewoo the KSS-III. defence manufacturing. After the RFP is issued and the responses have been In a welcome & laudable departure from this mindset, L&T received – the MoD/Indian Navy is likely to be presented nearly a decade ago commenced investments in the raising

APRIL 2021 15 CAPITAL PROCUREMENT

of modern shipbuilding and ship repair yard at Katupalli MDL/L&T – Navantia/Daewoo pairings, go on to win near Chennai. The construction of this shipyard is planned the contract, the Navy will then be required to operate an to be completed in two phases. When fully complete, the entirely new class of submarines of unfamiliar design & shipyard will be capable of designing, building, repairing operating philosophy. and modernising large warships, submarines, specialised In such a scenario, the Navy will end up operating 4 ships for the merchant marine (tankers, container ships, different classes of conventional submarines (EKMs, HDW, car carriers etc) and offshore rigs/installations for the oil Scorpene, Navantia/Daewoo) and will have to deal with the industry. L&T has already executed some shipbuilding orders many problems associated with operating & maintaining a for the Indian Navy, the Coast Guard, and the commercial remarkably diverse fleet. The Indian Navy barely copes with shipping industry. Even so, the facilities at the L&T shipyard having to operate the current three classes (EKMs, HDW, lie under-utilised and the yard is eager for more orders. Scorpenes) of conventional submarines. Its dockyards and It is understood that L&T has inked/is likely to soon ink materials organisations are stretched to near breaking an understanding with the Rubin Design Bureau, Russia to in providing repair & logistics support. In fact, owing to jointly bid for the P-75(I) order. inadequate domestic repair capacity, many of the EKMs L&T built India’s first nuclear submarine (INS Arihant) over the last two decades, have been sent to Russian and is currently building the follow-on submarines of the shipyards for major refits – at exorbitant cost – to enable class. These submarines were designed with substantial the maintenance of required force levels. Russian assistance and also contain a large number Adding a new class of submarines will also require the of Russian origin equipment. Although many of the addition of concomitant support infrastructure. Creating an competencies required for the construction of nuclear additional infrastructure will further raise the already high submarines & conventional submarines are vastly different, cost of the project. a majority of the fundamental design & construction principles are identical. Adapting the skills acquired Should the Contract be Split between while building nuclear submarines, to build conventional the SPs? submarines will not pose any challenge to L&T. L&T’s familiarity with Russian submarine design & construction After the identification of the L1 bidder, awarding the philosophy will be decidedly beneficial to the L&T – Rubin contract to either of the two shortlisted SPs will leave the combination if it is awarded the P-75(I) contract. other SP saddled with enormous un-utilised capacity. Might What if the HDW/Navantia/Daewoo Design Wins? If the it be advisable, therefore, to split the order equally between SPs – tie-up, bid and then go on to win the P-75(I) order the two SPs to ensure that both their capacities are utilised with one of the other three shortlisted OEMs (Navantia, and two production lines established for P-75I? Historically, Thyssen Krupp/HDW, Daewoo), it will throw up an entirely all warship/submarine construction projects in India have different set of knotty challenges. slipped schedules by several years and overrun allocated An MDL-HDW pairing will be able to leverage the budgets. It could therefore be argued that introducing capabilities & infrastructure already existing at MDL after competition between the two SPs, by splitting the order, necessary up-gradation/modernisation at a minimal cost. might help improve their performance in adhering to project An L&T-HDW arrangement would require the schedule and project cost. However, this approach adds the establishment of a production line at L&T, for HDW risk of receiving submarines of variable quality from the two submarines, ab-initio – requiring fresh investment. SPs. EKM submarines currently in operation with the Indian On the other hand, in the event that one of the possible, Navy were constructed by two different yards in Russia – to

16 APRIL 2021 CAPITAL PROCUREMENT

To maintain transparency of the process, the selection of the SP and the foreign OEM partner would be undertaken in parallel, through a competitive bidding process.

a common design. Despite the established capabilities of the that the provisions of the policy place disproportionate Russian yards, there was a marked variance in the quality responsibility on the OEMs – of delivering on project of construction and overall performance of the submarines performance, without granting them commensurate control. built by the two Russian yards. Before any move to split the This concern of the OEMs is not without basis. It is contract, a fundamental question will need to be addressed reasonable for the OEMs to expect greater agency in the – is splitting the contract between the two SPs even feasible? discharge of the contract if they are to be accountable for the The policy on Strategic Partnerships, as it exists, does not final product quality and the project schedule. Swedish firm permit splitting the contract between SPs. For the sake of Saab AB, withdrew from the project, after having initially argument, even if contract splitting were to be permitted – responded to the GoI’s request for Expression of Interest it will cause an unacceptable escalation of the project cost – (EoI) – contending that a rethink was required on certain each OEM will be required to provide ToT to two SPs and provisions of the SP policy. each SP, in turn, will need to develop separate sets of Tier-I, Saab AB sought greater clarity on the criteria under II and III partners at two different locations. This will clearly which 100 per cent FDI with government approval would be a wasteful expenditure of effort and resources. be permitted. The domestic and foreign defence firms have often suggested that Indian policymaking could do with a Subjective Considerations – A Reality dose of pragmatism. Ambiguities in policy provisions result in avoidable delays arising out of time spent on dispute The procurement processes stipulated in the DPP & DPM resolution. are intended to ensure that procurement contracts are Policymaking should aim to elicit willing participation awarded on the basis of fair and objective criteria. However, and guarantee mutual benefit. Policies that aim to coerce inevitably, most procurement decisions are influenced by a collaboration are unlikely to succeed. Those that facilitate host of subjective considerations. It is wishful to expect collaboration will. India’s past record of performance on that a contract of this significance and value can ever be defence projects has been less than satisfactory. Most fully insulated from subjective influences. Serving officers, defence projects, unfortunately, are poorly planned and depending on their individual operational experience, inefficiently executed. Poor implementation has been a tend to develop strong opinions (even biases) on what weakness with many defence projects. they believe is ‘superior’ design. Like most other projects, To improve on this record, the GoI, the service HQs and P-75(I) to is certain to have opposing camps, each plumping the participating firms – Indian & foreign – will need to for one of the competing choices – ‘Western’, Russian, or work in concert – with the GoI playing an enabling role in Korean design. Similarly, officials in the GoI/MoD develop harnessing the energy and capabilities of the private sector preferences based on their experience in past interactions and the DPSUs. Whichever SP-OEM combination is finally with the political/diplomatic/financial systems of the awarded the contract, Project P-75(I) will be a test of India’s countries where the OEMs are based. Additionally, often resolve to streamline processes and develop in-house the OEMs themselves, bring enormous lobbying power into competencies in the design and manufacture of defence play through their embassies and even their Heads of state. equipment to realise its goal of ‘Make-in-India’ for defence.

The ‘Strategic Partnership’ Policy – Issues (The writer is a former submariner with the Indian Navy with rich experience in the defence and aerospace Several foreign firms have flagged concerns with the sector. Published in arrangement with Defence Research stringent provisions of the SP policy. The OEMs believe and Studies. The article is available on dras.in)

APRIL 2021 17 TECHNOLOGY DEVELOPMENT How to catalyse India’s Defence Research and Development

By Commander S. Shrikumar population, Israel – 4.8% of GDP and 8255 researchers per million population. The other OECD countries, and ndia’s Defence Research and Development needs additional S. Korea, all outperform India on the above parameters. Ithrust in the coming years to meet the requirements of the India’s underfunded defence R&D and low overall Armed Forces. researcher density have resulted in India being unable, thus First off, some data on global investment on defence far, to develop any breakthrough military technology or research and development to set the context: weapon system and remains among the largest importers of l The USA is, by a wide margin, the largest spender on military equipment in the world. defence R&D in the world. While there is recognition, that in order to attain self- l The USA accounts for nearly 60% of global spending on reliance in defence, greater investment in defence research defence R&D. and development is imperative; India is faced with a l In the USA, civilian R&D is nearly 10 times as large as seemingly intractable dilemma – balancing the need for defence research and development. greater investments in defence R&D versus the long- term l India spends 0.8% of the GDP on all R&D and has 156 viability of these investments. researchers per million population. The agencies involved – the government, the private sector l In comparison – the USA spends on all R&D – 2.8% of and the R&D establishment are cognisant of this dilemma. GDP and has 4231 researchers per million population, A policy document, “Strategy for Defence Exports”, on China – 2.0 % of GDP and 1113 researchers per million the Department of Defence Production’s (DDP) website,

18 APRIL 2021 TECHNOLOGY DEVELOPMENT acknowledges that large investments in local R&D and l India, currently, does not have any weapon platform or production would not be viable if they are intended to only weapon system, of indigenous design and built using cater to domestic demand. The policy document highlights indigenous parts, electronics, sub-systems etc that has that “the policy of maximising indigenous production been proven in operation with India’s armed forces. without well-supported R&D policy and export strategy l The negative ‘country-of-origin perceptions that may not bring desired results. Therefore, the defence accompany Indian made products will take time to industrial policy has to be supplemented by the strategy reverse and dispel. for defence exports without which the economic base of the Given this scenario, the reluctance of the private sector to defence industry would be difficult to sustain in the present commit investments in defence research and development competitive economic environment.” is understandable. In countries with mature defence Investments in defence technologies are capital intensive industry, private investment in R&D outstrips government and provide returns only in the long-term. Such investments investment. However, India’s defence industry is just are viable only when exports, which provide economies of beginning to strikeout. At this stage of the industry’s growth, scale, are pursued whilst simultaneously fulfilling domestic the government needs to handhold the private industry and demand. However, it seems unlikely that India will be able foster a favourable climate for investments wherein there to export any sizeable quantities of defence equipment, is a reasonable assurance of commensurate returns. Some developed and manufactured locally, anytime soon. The measures have been instituted in this direction. reasons are many and well- known: Specific provisions have been provided in the MoD’s l The arms market is ultra-competitive with established Defence Procurement Procedure 2020 (DPP-2020). DPP- global players offering equipment that has been proven 2020’s Make-I (Government funded up to 70%)/Make-II in combat by militaries across the world. (Industry funded)/Make-III (Indigenously manufactured) l The mature and the new-entrant provisions are aimed at increasing (China, S. Korea) arms exporters, During the course of the investments in indigenous defence amongst themselves, currently R&D and manufacturing. An additional last two & half decades, receive the custom of almost all category called ‘Innovation’, has now the arms-importing nations of the the space establishment been introduced that aims to further world and are strongly entrenched deployed well thought out aid indigenous R&D. with their core customers. remedial measures, that The Make-I/II/III schemes also l Even in the case of mature & include provisions to protect the established global firms, their have led to India now being interests of the MSMEs. The provisions domestic demand does not largely self-reliant in space mandate that development projects of provide them with economies & satellite technologies value below Rs 10 Crores (for Make-I of scale. The established players and below Rs 3 Crores (for Make-II/ are also dependent on exports III) would be preferentially awarded to for maintaining a sustainable business. The existing, the MSMEs. mature suppliers, well-entrenched with their customers, Additionally, for some time now, in defence procurements will not cede space to new entrants easily. – the highest priority is being accorded to the Indigenously l Globally, India does not enjoy a favourable reputation Designed, Developed & Manufactured (IDDM) category of for either technology R&D, high-quality engineering, equipment, again signalling a policy level intent for attaining modern manufacturing, or product reliability. self-reliance in defence needs. These enabling provisions l Equipment produced in India, even under ToT/licensing should now encourage the DPSUs and the private sector to arrangements, have not been able to inspire confidence, commit more investment in R&D. amongst even the domestic buyers, since they have been Another route for the Indian industry to take – for safer plagued with a number of quality issues. Indigenously R&D investments – is to scout for products that have both ‘developed’ and manufactured equipment like the Arjun military and non-military applications. There are several tanks, the light combat aircraft and bullet-proof jackets examples of expensive technologies that provide dual often cannot be used because of performance issues. – military and civilian – applications. GPS is probably Recently, the Indian Army rejected, an Indian-made the most well-known example. GPS finds application in rifle (relatively low-tech equipment) for the second year watches and mobile phones, and also on intercontinental in a row after it reportedly failed quality tests. ballistic missiles. Rocket technologies developed for l Customers rely on ‘cues’ that reveal the qualities of the peaceful space applications, also power missiles. Nuclear product. The most important cue in arms purchase is power is harnessed, for powering our homes and for the proven record of their use by the exporting country’s the atomic bomb. Research undertaken in chemical and own armed forces. biological laboratories have applications that better our

APRIL 2021 19 TECHNOLOGY DEVELOPMENT

lives but are also used to produce chemical and biological initiatives, both, government and industry-funded, shift weapons. Even a seemingly benign technology such as focus to basic research and dual-use technologies. night vision and thermal imaging finds applications with Programmes such as the iDEX (innovation for Defence firefighters & photographers and also helps soldiers kill Excellence) and the DISC (Defence India Startup more efficiently. Challenge) are good initiatives aimed at strengthening the Dual-use technologies, that inherently present opportunity innovation eco-system. These programs aim to mobilise for a wider range of applications, provide economies of scale the capabilities available in the larger Indian startup assuring safer returns on R&D investments. eco-system to develop products for the armed forces – Together with addressing concerns related to R&D crowdsourcing of talent. investments, concerns with the existing structural The Indian defence industry has a ready example framework of the R&D eco-system also require attention. to emulate in its journey of self-reliance – the space India’s R&D and innovation ecosystem are riddled with establishment. When India’s space establishment was a number of fundamental infirmities. Some of these are embarking on its own quest for self-reliance, it found itself emphasis on applied research over basic research: in a situation not different from the one the defence sector l Low researcher/scientist density. faces currently. l Poor human resource base lacking the training required During the course of the last two & half decades, the to undertake research. space establishment deployed well thought out remedial l Absence of a dedicated policy on defence R&D and measures, that have led to India now being largely self- manufacturing. reliant in space & satellite technologies, best evidenced l Lack of a higher organisational structure to provide in the very successful launch (at a fraction of the cost of direction, thrust & oversight to indigenous R&D. similar launches by other nations) of the Mars orbiter l Inadequate investment in defence R&D (6% of the – ‘Mangalyaan’. The Indian space establishment has defence budget compared to 10% or higher in the USA & steered the indigenous development of several globally China). competitive technologies and even earns the country A well-planned, deliberate, and resolute elimination substantial revenue by undertaking satellite launches for of the weaknesses in the larger defence R&D eco-system several other nations. should be the first step in any move to enable self-reliance India over the last two decades has come to be recognised in defence needs. as a hub for international R&D activities in IT, drugs, In the absence of focus on basic research, Indian R&D aerospace, pharmaceuticals, satellite technologies and has largely been chasing technologies already developed biotechnology, among others. The time is now ripe to elsewhere. Sadly, ‘research’ in India is, very often, just replicate a similar success story in defence R&D. reverse engineering – with labs engaged in locally developing technologies that have matured elsewhere (The writer is a former submariner with the Indian but cannot be accessed either due to strict export control Navy with rich experience in the defence and aerospace restrictions or the strategic considerations of the other sector. Published in arrangement with Defence Research country. This situation can be corrected if Indian R&D and Studies. The article is available on dras.in)

20 APRIL 2021 GEOPOLITICS China posturing in South China Sea: Vietnam should lead response

By Dr Vijay Sakhuja a lagoon and has a channel for vessels to enter and leave”. Yet another satellite imagery published by Simularity hinese posturing in the South China Sea is always shows nearly 200 fishing vessels including some vessels Caggressive and is creating a muddle among the of the Chinese Coast Guard at Whitsun Reef claimed by neighbours in the region. Vietnam, China, and the Philippines. The report also notes Recent satellite imageries published by Simularity, a that Chinese fishing vessel has been operating out of the US-based technology company, show presence of bulk Whitsun Reef (arriving, mooring and departing) since raw material (sand) and other supplies at the Chinese- December 2020. occupied Subi Reef, a ring-shaped coral atoll in the South There is visible concern over these developments in China Sea. Vietnam and during a press briefing, Vietnam’s Foreign The imagery also confirms that Chinese container vessels Ministry spokeswoman noted that Chinese vessels at the frequently visit Subic Reef to deliver logistic supplies to Subi reef which Hanoi calls as Da Ba Dau, had infringed sustain troops and construction material, and one such on its sovereignty – “Vietnam requests that China stop this vessel can be seen berthed at the Subi Bay jetty as of 25 violation and respect Vietnam’s sovereignty”. August 2020. It is also assessed that between 6 November It was also emphasised that operation by Chinese ships 2020 and 22 March 2021, 2250 containers were removed within the territorial sea of Sinh Ton Dong in the Spratly from the island. Islands claimed by Vietnam “violate the provisions of These imageries and satellite pictures are indicators UNCLOS on the operation of foreign ships in the territorial that preparations are underway for either expanding sea of the coastal state, contrary to the spirit and content infrastructure or for repairs of existing facilities. It is also of the Declaration on the Conduct of Parties in the South fair to assume about “early phases of major construction on China Sea (DOC), complicates the situation, is not Subi Reef,” An earlier imagery of February 2021 assessed conducive to the negotiation process of the ASEAN and that China had reclaimed about “2.85 hectares (7 acres) China in the South China Sea (COC)”. Meanwhile, Vietnam land on the southern edge of the atoll which also “encloses has dispatched a Coast Guard vessel to the area and Foreign

APRIL 2021 21 GEOPOLITICS

Ministry spokeswoman stated that Vietnam was “exercising protection” given that their “presence in disputed its duties as regulated by-laws”, including international law. areas” attract low levels of political and security risks, The above developments at Subi Reef and Da Ba particularly when “there are pre-existing tensions between Dau and a subsequent statement by Vietnam’s Foreign neighbouring countries” such as the South China Sea. Ministry spokeswoman are an indicator of turbulent times In this context, the Heads of Asian Coast Guard Agency ahead and merit attention for at least four important Meeting (HACGAM), a grouping of 22 Member States and reasons. First, there is no letup in Chinese attempts to multilateral organisations which aims at cooperative and reclaim-expand territory in the South China Sea. It has proactive efforts to address maritime issues confronting consistently built infrastructure on occupied features and the region should lead and Vietnam can call for a special a large number of these have military use for launch and conclave to conduct a dialogue. recovery of helicopters, surveillance and reconnaissance, Finally, an urgent dialogue between the ASEAN and and monitoring shipping and fishing activities and some of China over the finalization of the Code of Conduct (COC) on these features static and mobile missile batteries. the South China Sea (SCS) is needed. This issue is closely Second, Subi Reef is just 16 nautical miles from Thitu associated with China’s new Coast Guard Act announced Island, also called Pagasa by the Philippines, and is under in January 2021 that caught the ASEAN nations by its occupation. It has built a beaching ramp at a cost of surprise. Also, the recent US and Taiwan memorandum of US$ 26 million for unloading construction material for understanding to establish a working group to “improve infrastructure to house military personnel and the civilian communications, build cooperation, and share information” population. In 2020, during his visit to the island, the on coast guard-related efforts could potentially be a Philippines’ defence minister had stated that there were no distraction for China from the COC-SCS given that US plans to militarize the island with “weapons that are heavy, Coast Guard is already deployed in the Western Pacific like canons or missiles” instead the purpose is to “develop to help allies enforce their claims in disputed waters. In this area into a viable community”. Under the current December 2020, a US cutter had boarded a Chinese fishing circumstances, the Philippines may reassess its earlier boat illegally operating in the waters of the Pacific nation position of not militarizing the Pagasa island encouraging of Palau. additional build given that Subi Reef is witnessing an There is a need to mitigate the aggressive Chinese aggressive buildup of infrastructure. Posturing in the South China Sea by all the peace-loving Third, it is now time for Vietnam to start thinking nations in the region. about leading a dialogue among the regional marine law enforcement agencies such as the Coast Guards for (The writer is a former Director at the National Maritime confidence-building measures. It has been argued that Foundation, New Delhi. Published in arrangement with maritime law enforcement (MLE) vessels, primarily Defence Research and Studies. The article is available on coastguard vessels, are “preferable for sovereignty dras.in)

22 APRIL 2021 BUSINESS AND POLITICS OF ARMING INDIA

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BUSINESS AND POLITICS OF ARMING INDIA MARCHAPRIL 2021

The Choke Point The MV Ever Given episode on the Suez Canal came as a reminder regarding the financial challenges of maritime security

24 APRIL 2021