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New Delhi: The postponement of India’s DefExpo 2022, just six days before its scheduled inauguration in Gujarat on March 10, has dealt a body blow to the reliability of the Ministry of Defence (MoD) in the global arms bazaar, at a time when the latter was badly needed to diversify the county’s predominantly Russian arsenal.
On Friday the MoD, as the DefExpo’s controller, had cited enigmatic and unexplained ‘logistics problems’ for this postponement, all of which a cross-section of exhibitors at Gandhinagar’s Mahatma Mandir Convention and Exhibition Centre (MMCEC) vehemently disputed.
Instead, senior defence industry officials claimed that this deferment had followed ‘pressure’ on New Delhi during the Quadrilateral Security Dialogue or Quad meeting Prime Minister Narendra Modi held a day earlier with his Australian, Japanese and US counterparts. They told The Wire that during this virtual four-member conclave on Thursday, the US is believed to have called upon India not to facilitate the ‘gratuitous’ display of Russian armaments at the MMCEC, which Modi himself was scheduled to inaugurate.
To further reinforce its inviolate anti-Moscow stance following Russia’s invasion of Ukraine, the US is also believed to have indicated in the Quad interaction its intent, alongside that of other European arms manufacturers, to withdraw from the DefExpo if Russian military enterprises participated in the four-day event.
Of DefExpo’s 121 overseas exhibitors, Russian defence companies were the second largest after those from the US out of an overall total of 1028 participants, the bulk of whom were obviously local. But all of them collectively faced punitive sanctions and embargoes by the US, European Union states, and other countries over the continuing assault on Ukraine by an irredentist Moscow that began last week.
Consequently, after extended deliberation, the Prime Minister’s Office (PMO) had reportedly instructed the MoD to declare DefExpo’s postponement sometime late Friday afternoon. Ironically, this took place shortly before the MoD had informed local journalists of the Indian Air Force (IAF)’s airlift to Gandhinagar to cover Modi’s inauguration of the biennial land, naval and homeland security systems exhibition.
Official sources said even defence secretary Ajay Kumar and other senior MoD officials were unaware of the Expo’s ‘postponement’ as were the participants who, unknowingly had busied themselves with erecting their stalls, chalets and displays of their equipment. Unaware of the impending postponement, Kumar had even tweeted that ‘Great opportunities (existed) for VCs (venture capitalists at DefExpo) to invest in best technological brains of India’.
Defence startups pitch to VCs at @defexpo2022
Great opportunities for VCs to invest in best technological brains of India@ianetwork @sequoia @Kalaari @on_india @Accel_India @TigerCapMgmt @elevationcap @matrixoptions @BlumeVentures @SpokespersonMoD @DefencePRO_Guj @DefPROMumbai https://t.co/YKWwU0zP2D
— Ajay Kumar (@drajaykumar_ias) March 4, 2022
MoD officials and others from the Defence Exhibition Organisation (DEO) tasked with organising the Gandhinagar show were unavailable for comment.
However, several overseas exhibitors said that the MoD’s ‘postponement’ of the DefExpo was merely a euphemism for the show’s cancellation, describing it as simply officialese to preclude compensating participants for the vast advances they had earlier paid to the DEO to ensure their inclusion. Conversely, if the MoD had, in fact, directly cancelled DefExpo it would then compulsorily have had to reimburse 75% of these monies in keeping with DEO stipulations, an undertaking from which it normally shrinks.
A fleeting scrutiny of the rates being charged by the DEO from overseas participants is instructive to gauge the large sums involved. The price for each assorted indoor and outdoor DefExpo stall, measuring 12 sq m, of which exhibitors had hired several apiece, was between $850-1,000 and $530-500 respectively. Expansive chalets, on the other hand, to entertain prospective clients and to hold meetings and negotiations away from prying eyes, ranged from $105,000 to $95,000 each, depending on when the advance bookings had been affected. Prices for analogous space for domestic companies were considerably less.
“It (DefExpo postponement) came as a rude shock to all participating foreign original equipment manufacturers (OEMs), especially when most of them had erected their stalls and were readying for the show,” said an executive from a participating US firm. “We faced no logistic handicaps whatsoever and now all OEMs had to undo whatever they had put together with great effort and at great cost,” she added declining to be named for fear of affronting an unforgiving MoD.
Another European exhibitor said the fallout from the superpower rivalry between the US and Russia over the Ukraine war had ‘shrouded’ the DefExpo, forcing its closure. But he had harsh words for the MoD, which he said should have anticipated the effect the evolving Ukrainian situation would have on the participation of Russian companies in DefExpo, and reacted sooner. However, such arbitrariness by the MoD in summarily calling off the Expo, added another US OEM official, further depreciated India’s credibility as a dependable customer, especially when its military wanted to dilute its inventory of Russian materiel, whose continuance in service was gravely imperilled by sanctions.
Over 50% of all Indian military assets were of Soviet or Russian origin that are continually in need of maintenance, overhaul and upgradation, all of which now threaten to become increasingly difficult, if not impossible, to secure under sanctions. And though India’s military could endure these restrictions and embargoes over the next 12-18 months via current inventories, and by cannibalising existing platforms to keep the rest operational, it faced a serious equipment crunch thereafter, senior service officers admitted.
Presently, India is awaiting imminent delivery of four of five Almaz-Antey S-400 Triumf self-propelled surface-to-air (SAM) missile systems, four Admiral Grigorovich Project 1135.6M frigates, 601,427 Kalashnikov Ak-203 assault rifles, as well as leasing one more Project 971 ‘Akula’ (Schuka-B)-class nuclear powered submarine (SSN).
Additionally, it had concluded assorted deals with Russia for diverse missiles, including man-portable Very Short Range Defence Systems (VSHORADS), ammunition and ordnance for employment by the Indian Army, locked in a continuing faceoff with China’s People’s Liberation Army (PLA) in eastern Ladakh since May 2020. India was also in advanced discussions with Russia to procure 464 Russian T-90MS main battle tanks (MBTs) and 12 Sukhoi Su-30MKI fighters, amongst other sundry kits.
Will dent MoD’s standing, say analysts
Back at DefExpo, Amit Cowshish, former MoD acquisitions advisor, believed that under the prevailing circumstances, India was caught in a ‘cleft stick’. He claimed that it seemed improbable for the MoD to reschedule the exhibition for later this year, as that would clash with bigger and more established defence shows in Dubai, France and the UK, amongst others. Besides, he warned that the MoD would face a predicament similar to the one at DefExpo next February, during the two-yearly Aero India 2023, as Moscow would remain sanctioned for an extended if not indefinite period and comparable, insoluble issues would re-surface, Moreover, the ticklish issue of recompensating DefExpo exhibitors too remained unresolved, further denting the MoDs standing with foreign OEMs, he warned.
Other industry officials and analysts reflected that the alternate way out for India of conducting future military exhibitions by excluding Russian or US and fellow European participants, would be ‘totally meaningless and irrelevant’; these would not only give offence to those who had been snubbed, but severely debilitate Delhi’s defence equipment options even further.
“The reality currently is that India remains equally dependent on Russia and the US for its materiel needs, and under no circumstances can it alienate either one of them,” said military analyst Major General A.P. Singh (retired). It now faces the unenviable task of finding a via medium out of this calamity which DefExpo has highlighted, he cautioned.
Meanwhile, DefExpo overseas exhibitors, now desultorily packing up to return home, bemoaned the high costs they had incurred, not only in stall-booking fees and in ferrying their elaborate displays and hardware to Gujarat, but also paying advances for hotel rooms in Ahmedabad where the tariff had soared sixfold to over Rs 50,000 per night.
“In all likelihood, we will eventually have to write these expenses off, and chalk it down to a bad albeit avoidable experience,” remarked one European participant resignedly.
Another, however, somewhat eruditely and lightheartedly suggested that perhaps the Mahatma’s spirit hovering over the MMCEC, named after the apostle of peace, had intervened and mysteriously impeded arms sales to India, for now.