Procurement: The Offer Russia Could Not Refuse


February 28, 2009:  India is demanding that Russia sell them the design data for many of the weapons they have bought over the years. Russia is under a lot of pressure to accede. For decades, Russia controlled most of the market for high-tech military exports to India. Since the end of the Cold War in 1991, India went through some changes. First, the Indians abandoned their four decade experiment with socialism and state control of the economy (not communism and central planning, but many restrictions on entrepreneurs, as well as importing and exporting goods). The economy flourished, and suddenly India could afford even better quality weapons (from Western suppliers.) At the same time, India sought to expand its domestic arms industry, so that they could design and produce their own high-tech weapons.

Russia had already sold India production licenses for many major weapons systems. Russia would have preferred to just ship tanks and aircraft to India, but the license approach was a profitable second best. Russia also planned to make a lot of money with upgrades for the weapons, both the ones built in Russia, and those built under license in India. But the Indians wanted to shop around, and, where it suited their interests, to install non-Russian upgrades. To do that, they often need design details on the Russian gear.

India doesn't have to threaten to switch to Western, or domestic, designs for major military systems. This is already happening. India is telling the Russians that, if they want to preserve their privileged position as the major Indian weapons supplier, they will have to cooperate by sharing weapons design data. It's an offer the Russians can't refuse, at least not at great risk to their weapons exports.




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