 Hello and welcome to NewsClick. In middle of various debates about the Rafale deal, the government has also decided to open tender for other aircrafts, which also includes double-engine aircrafts. This will also lead into entry of various private players in the field. To discuss the issue, we are joined by D. Raghunandan, who is a defence analyst. Welcome to NewsClick, Raghunandan. So despite the army saying that its focus is on single-engine aircrafts, the government has decided to open this tender once again for the double-engine aircrafts. What does that mean? Can you throw some light on it? Firstly, I think that this has reached farcical levels. This whole procurement process dates back more than 15 years. Started with multi-role combat aircraft, which the way it was then defined could have been single-engine or otherwise, but then specifically based on inputs from the Air Force, it specified a medium-weight multi-role combat aircraft, which essentially knocked out all the single-engine aircraft and focused on double-engine aircraft. Based on that, tenders were issued, competitive process was gone through and between Eurofighter and the Rafale, the Rafale was selected. The preliminary elimination of the FAA-18 Hornet and other similar aircraft. Now we have gone back, the Air Force having issued a tender for 126 Rafales, Air Force apparently seemed to feel this was sufficient in terms of deep strike, deep penetration aircraft with heavy payloads and they wanted more lighter aircraft, which they can use for interception role and for light strikes. Given that perhaps they were insufficient Tejas, the indigenous Tejas aircraft getting ready. So that brought the focus to single-engine aircraft. Now again, this has been opened up to both single-engine and double-engine aircraft. I am completely befuddled. I am unable to understand what is the actual requirement and who is dictating this environment, this requirement. If one were to go by the Air Force's thinking, then the logical thing would have been having acquired 126 Rafales, then you acquire, if necessary, a set of single-engine aircraft. If you ask me, the government would have been much better off investing in expanding a production line for the Tejas, developing the Tejas Mk 1 and future versions, which should have served the purpose of a lighter interception-based aircraft. So this I find incomprehensible. I think that the government is unnecessarily meddling with a technical process of evaluation of aircraft and specifying what kind of aircraft the Air Force needs and bringing in extraneous criteria such as maybe pleasing the United States by bringing in these Boeing's super hornets or wanting to set up indigenous manufacturing bases in the private sector and choosing aircraft based on the preferences of the foreign partners. This to my mind is becoming a ludicrous proposition, not only in terms of technical selection but also in terms of the politics of it and the direction in which this country is to be taken for the purposes of both industrial production and national security. So let's deal with these issues separately. First, let's come to Boeing and super hornet jets. There's also a talk about Boeing coming in collaboration with HL and Mahindra. So can just throw some light on that part because HL I think should be sufficient to do it. Why involve Mahindra? Why a private sector company? This government has made no secret of the fact that it wants to develop a private sector based military production and manufacturing base. They have expressly stated their lack of confidence in the public sector setup. They think HL is not providing what they want, is constrained in many ways and therefore want to develop the private sector in doing so. The problem is the private sector has virtually zero experience in precision manufacturing and particularly manufacturing for the aviation sector. You've got small pockets of the private sector in Mahindra, in Tata's, L&T who have in the past undertaken small component manufacture for aircraft. For example parts of the fuselage, parts of the wing which go into much larger assemblies of aircraft, the one that cannot become substitute for another. Somebody is making headlamps for a car, doesn't mean he's capable of making the whole car tomorrow. Manufacturers of automobile components in Ludhiana are not manufacturing cars, leave alone designing cars. So I don't see the private sector having the capability or the investment potential to be able to work in an investment heavy and R&D heavy sector like defense manufacturing and particularly aviation sector in the defense manufacturing. So I think this is a very misplaced idea even if you assume that the government is doing this with the best of intentions because it is not possible for private sector players at this late stage of the game to enter aviation manufacturing that too in the defense sector plus if we are to think even that the government wishes to set up an indigenous manufacturing base based on private sector competence with absorption of technology. The private sector is not capable of absorbing advanced technologies in the aviation sector. This will lead to further dependence on the foreign manufacturers. Then the question arises why was there so much so much emphasis on this entire offset production because clearly the indigenous growth is getting hampered due to it. Why was there so much focus on it? The original idea of offsets and this is not an Indian invention offsets have been invoked by many other countries as a leverage. If you want to sell us so many aircraft and you are making a big deal out of it you give us also a share of that production. But most countries have tried at least to use offsets in a way that offsets is not just a subcontract of a part of the production to the host country to the buying country but is a method by which you acquire technology that is really the purpose of offsets. However, this government in particular has been viewing offsets purely as a financial transaction that there is a deal for 30,000 crores. We impose a 50% offsets on you and therefore 50% of that 30,000 crores of the deal will be spent within India but that will not mean anything at all if you are not acquiring technology in the process and the government has now this government has now redefined offsets to specify that for example, if you take Rafale that offsets need not necessarily mean that 50% of the production work of Rafales should be done in India but if the assault aviation is manufacturing something else like corporate jets then the offset partner in India can also make corporate jets in lieu of making Rafale which then means even less of technology transfer for the Rafale. In fact this started with Boeing itself in various deals that India has struck with them which were not adequate according to Boeing for striking and working out a good offsets deal. They were allowed to get their domestic partners to manufacture components for Boeing civilian Boeing aircraft in order to offset the value of the deal. To my mind offsets should always be used in a way so as to leverage the production which is going to take place in India to be able to acquire technologies in component making, in assembly, in aircraft manufacture in such a way that it increases the capacity within India which will help India tomorrow to be able to develop and manufacture indigenous aircraft. So if you look at all these things this entire making India schemes looks like a sham because if you look at the entire defence sector all together the defence employees have protesting since months and yesterday only they did a nationwide protest against privatisation that's taking place. That's right. So then what is this entire scheme about? Even if one was to take at face value the intention that we've got a public sector which has been making aircraft and other defence equipment but they are not able to make it in the quantities desired, they are not able to keep up with equipment development research and manufacture and therefore we want to bring in private players. If that was the intention the way to go about it would have been the way India has gone about it in the nuclear and space sectors where over decades India has developed competent R&D and manufacturing capability in the public sector completely both in nuclear and in space but in both these sectors ISRO in space and BARC and other agencies in the nuclear field have gradually subcontracted parts of the work to private sectors have developed a vendor base in the private sector and have therefore decentralised if you like the manufacture of technology is required in space or nuclear technology and have developed very competent partnerships in the private sector which can India could do exactly the same in the military sector whether it is aviation or somewhere else in any other sector you've got a core manufacturing capability in the public sector in HAL which could then develop a set of vendors for components and sub-assemblies and then bring those in to develop the competence over a period of time because this is not going to happen overnight. To my mind unfortunate conclusion is A that this whole issue has not been thought through by this government B this suggests a complete lack of understanding of what is required to acquire capability in advanced science and technology areas in defence manufacture aviation and so on and see to my mind this smells of a ploy to pass on some of the money huge sums of money which India is going to spend on defence acquisitions to some select private players in this country regardless of whether or not they are going to develop capability. This is crony capitalism at its worst.