By Amit Cowshish
To augment its surveillance capabilities, each at sea and along its coastal regions, the Indian Navy (IN) has lately leased two non-weaponised General Atomics Aeronautical Systems In MQ-9 Sea Guardian unmanned aerial cars (UAVs) from the US for a single year. Inducted at the naval base INS Rajali on November 21, these twin medium-altitude extended-endurance (MALE) UAVs can stay airborne for more than 35 hours and attain a maximum flying altitude of some 35,000 feet. While upkeep and other technical help for will be offered by General Atomics, the IN will have complete handle more than their operational deployment and the information and facts gathered by them.
These UAVs will supplement maritime surveillance operations performed by the IN’s Rajali-primarily based fleet of Boeing P-8I Neptune extended-variety aircraft which has also been employed for surveillance along the Line of Actual Control (LAC) in eastern Ladakh, exactly where the Indian and Chinese armies have been locked in a faceoff. The indications are that the leased UAVs could also, be employed to monitor improvement along the LAC.
According to some sources, IN’s leasing of these UAVs was enabled by India signing the Basic Exchange and Cooperation Agreement (BECA) with the US in late October, which facilitates the bilateral exchange of geospatial information, sensor information and satellite imagery. BECA is the final of 4 ‘foundational agreements’ in between India and the US to additional defence, strategic and military ties.
However, it appears unlikely that the UAV lease agreement has been concluded below the provisions incorporated in the Defence Acquisition Procedure 2020 (DAP-2020), which permits leasing of the military gear and platforms from domestic and foreign vendors in a bid to lower general charges, as it was released by the Ministry of Defence (MoD) only on October 30.
This is not the initially time that India’s military has leased gear, with the IN becoming a pioneer in this regard.
Last March the IN signed a $3 billion Inter-Governmental Agreement (IGA) with Russia to lease its second 8,140 tonne Project 971 ‘Akula-class nuclear attack submarine (SSN) to augment maritime domain awareness. Under the IGA Russia will need to deliver the SSN by 2025, soon after the 10-year lease of INS Chakra, a similar Akula-class boat ends in 2022, though it may possibly be extended. Earlier, a ‘Charlie-I’-class SSN for 3 years till 1991 that as well was commissioned as INS Chakra.
Some reports recommend that the IN is now thinking about the quick-term wet-lease of 12-18 Light Utility to augment its transport capability and in addition use them for surveillance.
The inclusion of an whole chapter on leasing in DAP-2020 is not just a reminder that such renting can be a price-helpful system of operating military assets more than a quick time frame with out substantial capital investment but has also rekindled the interest of the Indian Air Force (IAF) in opting for such a model.
Recent media reports indicate that the IAF, facing a essential shortage of Basic Trainer Aircraft (BTA) is thinking about leasing some for 4 years from a domestic organization to make fantastic its shortfall. This, on the other hand, seems odd as there is no Indian organization, other than the state-owned Hindustan Aeronautics Limited (HAL) that tends to make aircraft. Besides, HAL is poised to start serial production of its personal indigenously developed Hindustan Turbo Trainer-40 or HTT-40 trainer aircraft.
Therefore, it would be paradoxical for HAL to lease trainers to the IAF, when gearing up to provide 106 BTA, whose acquisition was authorized by the MoD’s Defence Acquisition Council in August 2020. Thus, an additional Indian organization will have to have to import BTAs to present them to the MoD on a lease if the IAF sooner or later decides to exclude foreign businesses from the race, in a move that seems to defy logic.
According to the DAP-2020, leasing of new or previously-utilized gear is greatest suited exactly where the time constraint militates against outright procurement or if the capability it supplies is necessary for a precise time period. Leasing is also advised if the military asset or platform would stay underutilised if procured, its requirement is in restricted numbers, and the price of making administrative and upkeep infrastructure is higher. Obtaining operational practical experience would also be an objective for leasing.
The DAP-2020 offers the solution of deciding on in between an ‘Operating Lease’ -an arrangement exactly where the concerned asset may well be acquired by the MoD at the finish of the cessation of the leased period at a mutually agreed-price tag or a ‘Finance Lease’, below which the MoD pays the whole price of the asset more than the lease period and consequently assumes its ownership.
The Operating Lease could be a Dry Lease, in which only the asset is leased or alternately a Wet/Damp lease, below which the lessor supplies the asset, crew, upkeep, and insurance coverage to the lessee.
While the IN has been a trailblazer in tapping the prospective of leasing gear, the IAF has been rapid to adhere to suit with its putative move to lease BTA and possibly even air-refuelers which has been a extended-standing requirement for more than a decade. The Indian Army (IA), for its element has for now not expressed any interest in leasing.
But there is a single imponderable in all this. While leasing can mitigate the burden on the military’s stressed capital spending budget, further funds would be necessary to spend the rent. This, in turn, will necessitate a realistic assessment of probably budgetary allocations just before opting for massive-scale gear leasing.
(The author is a former Financial Advisor (Acquisition), Ministry of Defence. Views expressed are private)