$5.8 Billion Indian Missile Deal Hangs By Thread, Decider In A Week

Later this month in the famed Pokhran weapons testing ranges in India’s western desert sector, French, Swedish and Russian teams will arrive for one of the most crucial field trials in their collective careers. The teams have weathered a meandering trial process that has stretched over seven years. But the sheer value of the prize at hand — $5.8 billion worth of air defence weaponry — makes it impossible for the teams to even contemplate cutting their losses and walking away.

It is, by far, India’s largest single deal for anti-air missiles. If uncertainty has raised its head more than a few times since 2010 when it all began, the Very Short Range Air Defence (VSHORADS) programme, which looks to gear the Indian Army with 800 manned twin launchers and 5,000 missiles, stands at a precarious position that has flummoxed all three contenders in the race.

Before the end of this month, trial teams from MBDA, Saab and KB Mashinostroyeniya will take the now-familiar flight to Rajasthan, and then onto the Pokhran ranges bearing their products: the Mistral, RBS 70NG and Igla-S. India currently operates an early version of the Igla in a single shoulder-mounted launcher configuration. The systems India is looking to purchase will be twin launchers.

Army sources familiar with the final test phase spoke to Livefist about what will happen in Pokhran this month, providing an intriguing picture of a deal that stands buffeted by a paradox: it is imperative that a deal is concluded, going by the tactical air defence gaps that the Army highlights regularly. On the other hand, several blips in the process have pushed it out into uncertain territory. Livefist has the state of play:

For starters, the only system that will engage in any firing during the re-confirmatory trials this month is Saab’s RBS 70NG. While the Russian team has been asked to demonstrate the crucial act of target acquisition — an obvious pre-requisite before firing efficacy can even be gauged, the French team will be on site as observers, though the MBDA team has other non-compliance issues to set straight during the final round.

More interestingly, Russia is ‘back in the game’, in the words of a senior official with the Weapons & Equipment Directorate of the Army. Those words are significant, given that Russia simply absented itself from a handful of earlier trial rounds, and has failed to meet requirements a few times. While this has seemingly thrust the contest onto an uneven playing field, no punitive or procedural action appears to have been taken against Russia’s KBP. In case you’re wondering why MBDA and Saab haven’t thought of lodging formal protests with the Indian MoD, our best guess is that contenders rarely want to rock the boat and risk a full programme abort — something that has happened several times before in Indian contracting.

Army sources say while all three systems have had performance or technical compliance niggles since field evaluations began in 2012, the Russian Igla-S had the most significant issues: firing was deemed not successful during field trials, target acquisition continuously failed, and, to top it all, the Igla-S didn’t have a state-of-the-art sight during trials. To the likely consternation of the Swedish and French teams, the overpowering sense is that Russia isn’t at any apparent disadvantage going into the final test round.

Sources tell Livefist that Russia’s move to field the 9K333 Verba system in place of the Igla-S two years ago was principally because of the latter’s performance issues. However, replacing a product mid-course under an unusually strict set of targets charted out in the RfP was simply not an option, and would have meant an instant reboot to the contest. Russia was told the Verba couldn’t come anywhere near the race, and the VSHORADS contest would only test the Igla-S.

Livefist reached out to the three companies to get them on the record about the upcoming trial round. While KBP declined comment, Saab and MBDA did.

A spokesperson for MBDA said in a statement over email, “We have to respect the process and do our best to further convince the Indian customer that MBDA’s VSHORAD is the best solution for India’s requirements, both in terms of its operational capability and in terms of the industrial offer we are making – namely the manufacture of the Mistral missile under license, this includes ToT. We also stress the advantages of the Mistral missile being the same missile that will be arming the Rudra and LCH (the Mistral ATAM systems already integrated on Rudra and currently being integrated on LCH). We have successfully carried out FETs set by the Indian customer in the 3 environmental domains stipulated – desert, sea and altitude. Our Mistral MANPADS passed these tests including technical lab trials on time and on schedule to the full satisfaction of the Indian customer.”

In what can only be interpreted as an indication of the playing field thus far, MBDA’s statement concludes, “Because further FETs are now being sought by the Indian customer in a move to carry out and conclude the fullest evaluation of the competing options, the DPP requires that all the competing vendors are given a further and equal chance to prove their products’ capabilities to meet the Indian requirement.”

A spokesperson for Saab India said, “Saab never comments on ongoing trials, and we will fully, as always, cooperate with customer requirements. Furthermore, we are confident that Saab’s solution of the RBS 70 NG and the HARD Radar is the perfect system for the Indian Armed Forces’ requirement of a VSHORAD system. Besides being the world’s most modern system in this category, it will provide much more versatility and flexibility to India, at the lowest life cycle cost. What is also well-known is that we are already transferring technology to Indian companies for this program, and will have the best Make in India offer.”

History has shown an abort only ever a step away in any Indian arms acquisition process. As Livefist reported last year, there has been talk of simply scrapping the VSHORADS contest and starting it afresh. That would, by all accounts, be disastrous: it would belie the urgency of plugging India’s air defence gaps, the costs sunk into evaluating systems both by the government as well as the contenders as part of the  expensive ‘No Cost No Commitment’ stipulation. And finally, given that delays have almost never resulted in a better deal or savings for the country, it would cement India’s already shaky reputation for being a whimsical buyer.

While procedural back and forth is only to be expected in India’s defence contracting process, a question that has swollen over the last two-three years is whether decision-making has been hamstrung once again by a system unwilling to follow laid down rules and conclude the exercise. Has the subjectivity that has bedeviled scores of earlier contracting efforts afflicted this one too? Or, come the end of April, could the Army have everything it needs to make a final recommendation on its most significant air defence deal? We’ll be keeping a close watch.