 Welcome to NewsClick. Yesterday, the chief of defense staff, General Bipin Rawat, had a meeting with select group of journalists where he shared with them some of the plans of restructuring the three armed forces and several other ideas that he mooted. There were two that were of particular significance. And to discuss that, we have with us NewsClick's defense analyst, D. Raghunandan. Ragu, welcome once again to NewsClick. My question is, there are two references that General Rawat made, apart from laying down various other things about theater command, that there is a study that will be implemented to take a look at whether there will be two or five theater commands or however many theater commands, and further other restructuring. But there are two items which have a direct bearing with something which we have discussed earlier. And you should feel happy that he spoke about staggering the purchase of 114 fighter jets, tender for which were issued by the government of India. And there is a report also which suggests that the assault aviation is back in talks with Hindustan aeronautics limited. So Ragu, my first question to you is, how do you look upon the staggering of this fighter jet? Because this is one of the things that you had spoken about in the context of the Rafale. Correct. See, when the Rafale deal was being negotiated, this government cancelled the order for 126 and placed an order for 36. Now it looks as if they are going to place an order for a further 36. And if you remember at that time, we had discussed saying if money was the constraint, you could have placed an order for the full 126 or for 72 or 90 or whatever you wanted with a proviso that you will make payments on a rolling basis, which is what now CDS has come to. Obviously, the comments that CDS has made, I take as a reflection and an outcome of the budget presentation by the finance minister, which has kept defense allocations at more or less the same level as earlier, which has posed constraints on procurement because there is no money. So the defense forces are under a resource crunch and they are trying to overcome that. And this is one way of doing it. Although I was a little surprised at General Rawat's comments that we have decided not to go in for large big ticket orders and that we will go for staggered production because I think this is not an in principle decision. It is a decision forced on you by the circumstances of resource constraints. But I have two concerns in this regard. One is if you place an order for let us say 72 Rafals on the basis of a staggered delivery schedule linked with a staggered payment schedule, it also leads to a higher indigenization content. Because of the larger order. Now if you look at the Rafal deal, 36 have been ordered which are outright purchases because the size of the order was small. So I think they should be clarity on whether the size of the order can still be large, but with a staggered delivery and correspondingly staggered payment system, rather than a series of separate orders for small lots. Because if you do that, you will not gain from economies of scale, you will end up paying more money and there will be less indigenization of the production. Take for example, although General Rawat as CDS is supposed to be speaking on behalf of all the three services, the army has ordered how it serves from the US. It has got its own Dhanush how it says manufactured by the ordinance board and it has got the self-propelled guns in collaboration with Korea. All of these orders are in the order of 110, 120, 140 guns. I do not remember any of these orders being placed of 30 guns this year and 30 guns after three years. That is not the way it is. You place an order for a larger amount that works out in how you manufacture this in transfer of technology and so on. So I do not see that this is a very revolutionary idea to do staggered production. But as I said, my main concern is it should be staggered delivery linked with staggered payments, rather than being staggered small orders. Reboob, there are two things. Now that the salt is talking once again to HAL for possible production in India and therefore possibility of indigenization. Now the ideal thing would be, as we have been discussing this earlier, that Rafal deal, the old deal 2012 deal should have continued, they could have staggered the acquisition as you have said. But now they are going back to talking to HAL and they are discussing work share. Work share but possibly only for 36 Rafals. Now my question is how does that make sense then? So as I said, the work share definition and the indigenization percentage would have been higher if we had signed a contract for 72 Rafals to begin with and then you have a staggered schedule but then both HAL and that is all could plan for a staggered delivery schedule and the indigenization content also would have been clearer for 72 aircraft, how many components you want to make. The cost of production also will be lower if you know that you are going to plan for 72 rather than plan for 30 now and then sit and wait for another two years and then start another plan for 36. That does not make sense from an engineering point of view. And then it is producing co-production of 36 even if most of it is done in India. So the second lot of 36 which is going to be ordered, the work share of HAL I am afraid is going to be less in terms of quantum of work than it would have been if we had bought 72 at one go. Certain components will perhaps not be made in HAL, would be supplied straight away. So I think there would be a restriction in terms of numbers. The second interesting thing about this is if the IAF is going for a second lot of Rafals, I think the new deal for a 114 fighter jets is in trouble. It becomes infectious. Well if you were looking for a different type of aircraft then maybe not but as I have always said this 114 did not make sense to me to begin with because the whole plan of the RFP had been for Rafal type deep penetration Stike aircraft. So I think with this deal the 114 recedes into the background and it may not fructify which I think throws up some interesting questions on what India can or is likely to offer to President Trump when he visits India because now clearly this 114 order is out. The other thing that General Rawat said which is also significant is he said that aircraft carrier is very expensive and that we are more keen on submarines. So there will be no third aircraft. Now on December 3rd last year Navy Chief had come out and said that in their long-term plan three aircraft carriers are essential because two must be available for deployment. Absolutely. The battleships or battle groups have to be available for deployment. Now if we have decided to drop that and we are going to be acquiring the second aircraft where does it leave India's maritime? I have a feeling once again that virtue is being made out of a necessity. Okay you are short of funds now but you can do an allocation of funds in such a way that you can still acquire or build the third aircraft carrier over a period of time. General Rawat has also spoken about one peninsular command. Correct. Merging the western and eastern command. Merging the western and eastern navies as well as integration with corresponding army and air force. That is a lot of ground to cover. It covers the whole of the Arabian Sea, it covers the whole of the Bay of Bengal as well as the deep Indian Ocean. It is not going to be possible to do this with two aircraft carriers which anyway you require on the two flanks on either side of the peninsular and because aircraft carriers tend to be requiring refitting etc periodically usually if you have three only two will be in service at any given point of time. So I think abandoning it is not a great idea. Finding the resources for a staggered construction and payment schedule is I think the way to go. That is all for today Raghu. That is all for today from NewsClick. Keep watching NewsClick. If you have any comment or feedback do let us know.