Monday, 13 February 2012

A Mercenary Attitude to the Indian Economy


Jack Barton





India’s 1.13million strong military has long been criticised for underfunding and out of date equipment. Getty Images/Daniel Berehulak
At the end of January, after months of negotiations and sales pitches, the Indian ministry of defence indicated that it has chosen to buy 126 Rafale Fighter aircraft from the French firm Dessault rather than the Eurofighter Typhoon from BAE Systems and Italy’s Finmeccanica.

The decision has outraged many British politicians and commentators, drawing criticism of the Indian government from the right and the British government from the left.  David Cameron drew criticism by getting involved personally in attempting to change the Indian government’s mind.  Since it has been a clear aim from the start of his administration to garner closer ties with India, particularly in terms of trade, this must have left rather a sour taste.  Commentators have suggested that this is down to a fundamental misunderstanding of who holds real power in India; Cameron has worked hard to foster good relations with his Indian counterpart Manmohan Singh – underestimating the unofficial power still wielded by the Ghandi family who David Miliband was much closer to.
The reaction of Conservative MP Peter Bone (“What on earth do they know about cricket and curries”) sparked a much-read article by Labour MP and Guardian columnist Tristram Hunt.  The article highlights the dangerous effect of an attitude toward India “enveloped in the language of colonialism and entitlement” which threatens to forever undermine the relationship.
While I am more than happy to criticise David Cameron for attempting to cosy up to the Indian Government without attempting to understand the nuances of Indian politics or the very real danger of post-imperial arrogance, it is hard to believe that either of these things were really the problem.  India chose the Rafale over the Eurofighter Typhoon simply because it was cheaper.
India has the second-largest military in the world but the 10th largest military budget, and this time last year the Indian government increased the defence budget by 11.6%.  Its enormous military machine is engaged in an overhaul it has been attempting to complete for almost half a century, spurred on by what is essentially an arms race with China.  For all of BAE’s assurances that the Typhoon is a better aircraft, the Indian air force already uses French planes and Dessault’s offer was lower.  Undoubtedly many factors went into India’s decision but it really should not be a surprise, and what’s more from India’s perspective it is hard to see it as a bad decision.
The Eurofighter Typhoon was widely tipped to win the contract by analysts. Reuters
Much of the criticism has been drawn from the fact that France gives no aid to India whereas Britain donates billions, the Sun has even called for an end to British aid to India.  Arms trade companies are at best in a murky ethical position on the whole, squabbling over a $10billion arms sale to a country where over 30% live below the poverty line is even more dubious.  But calling for aid to be reliant on their buying our weapons surely crosses a line.  BAE will not cease trading with India, they will keep trying to change their minds, they will keep selling them arms whenever they can.  Britain cannot cease giving aid to India, apart from the suggestion that this would be some kind of reprisal, the government has made it all too clear how much increasing trade would benefit us and how keen they are to gain tighter links with New Delhi.
There is a good chance that this deal will fall through – it has been suggested that Nicholas Sarkozy brought the price down temporarily to gain a political victory in an election year.  This would explain the British government’s indignation but highlights yet another unsavoury element of this affair.
The British government is just not in a position to complain about this and in doing so it risks revealing an incredibly mercenary attitude toward its dealings with its former colony.  In constantly trying to increase its financial and diplomatic stake in the developing country, our government forfeits its right to criticise India’s massive – and ever-increasing – defence spending despite their continuing to take (and so clearly need) aid money.  Furthermore what should oblige India to choose our more expensive option?  The British government’s stance has repeatedly demonstrated that they think that we are the ones that have everything to gain from this relationship, had the Indian government chosen the more expensive option they would have come under enormous criticism for wasting extra resources so badly needed elsewhere.
It is easy to attack the UK arms trade from a moral perspective and of course the fact that Dessault is likely to win the contract is hardly a result of the company’s altruistic aims towards cutting Indian defence spending.  It is necessary to take a step back though; the outrage displayed by our government is a PR disaster, bringing to light an incredibly mercenary attitude where aid is there to buy us favours and winning a defence contract with a poverty-stricken country is a political victory rather than economic expediency and at best a necessary evil.

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