India would be a smart buyer in the aerospace and aviation market in future keeping in view the national interest and healthy growth of its own industry. Any deal would be on India’s terms. "Mutuality of interest will be the touchstone of our choice." These words were spoken by Defence Minister George Fernandes while inaugurating a seminar on the eve of the Aero Show in Bangalore. They also mark the beginning of a new era where the quality of the product and the willingness of manufacturers to set up joint facilities will determine decisions regarding procurement of equipment by the defence forces.

They mark a clear departure from the days when the forces were given a product, which conformed to the minimum standards laid down by them and not the best product available in the market. The result was that our forces had to often do with inferior products as the sources from which they could be procured were limited and the choice often fell on the countries with whom we had rupee trade in order to save precious foreign exchange. Such decisions created problems but the country had little choice as the cold war conditions prevailing in the world and scarcity of foreign exchange left us no choice in the matter. The situation today is changed. Our foreign exchange reserves have touched record levels. All the countries in the world are now willing to sell their products to us. This was clearly shown at Bangalore during Aero Show when top companies from the U. S. A. competed with their counterparts from Europe, Russia, Israel and local producers. This was for the first time that American companies came to India in large numbers to sell their products in the post-sanction phase. The sanctions had been imposed after India exploded its nuclear bomb.

In the words of American executives, the world has changed after the September 11 events which shook America. In the new phase, not only have India and the U. S. A. come closer, they are also holding joint exercises. The Indian Air Force officers who saw practical demonstrations of American equipment during the exercises were suitably impressed and are now keen to change their requirements. As indicated India will not be buying equipment which just fills the requirement but will instead look for the best available and at a suitable price.

The criteria of looking at products is also expected to undergo change. Not only will the buying price be taken into consideration, but factors like life cycle cost including the cost of spares and the extent of maintenance required will also be looked into. All these may imply that initial cost may become higher, but the overall cost will come down considerably. India also aims to get out of the present cycle of high attrition rate, as indicated by frequent crashes and grounding of equipment as there are frequent breakdowns and spares are not readily available.

These changes have been clearly hinted at by the Defence Minister through his new approach. Such changes will not come about easily. For instance, our forces at present are mostly equipped with arms, planes and other equipment supplied by the former Soviet Union. The upkeep of this equipment has suffered greatly after the break-up of the Soviet Union as India could no longer depend on a single source of spares supply and instead had to negotiate with separate entities for getting the same. This has posed a serious burden on our defence production units as well as Hindustan Aeronautics limited. The controversy regarding the use of spurious spares for MiG repairs has yet to die down.

Yet another factor which will have to be taken into consideration is the participation of the private sector in the changed scenario and investment by foreign firms who have been allowed to have a limited stake in our defence industries. Such a transformation will not be easy as new norms will have to be visualised instead of the present practice where cost plus is the normal formula used by State-owned units engaged in defence production. Such changes do not come easily as seen by the Russian experience. It will also imply quicker decision-making instead of the present practice where they drag on not only for years but sometimes for decades.

The best example is the purchase of the Advanced Jet Trainer (AJT). If this deal had been struck in the ‘Nineties, the choice of aircraft selected would have been ideal as being the best available in the world. But in the twenty first century, the situation has changed with the induction of modern fighter planes like Sukois. They will require a new kind of training with more advanced machines. More so, irrespective of the choice exercised by picking up either the plane originally selected or the new ones under development, the delivery and their induction will not be possible before 2006. This is a result of the fact that no assembly line for making trainer jets is running at present and new facilities will have to be set up. It is in view of this change that the Union Cabinet which received the proposal for purchase of jet trainers six months ago has not taken any decision so far.