German Arms Firms Seek Cooperation with India

When it comes to arm purchases, India is already a global power: In the next decade, country plans to purchase at least €100 billion ($120 billion) worth of weapons. Just last year, India’s defense budget grew by 34%, and it will swell by almost 18% this year. For arms exporters, it is a huge business opportunity and one that the German defense industry is keen to get in on. Germany, for its part, is the world’s third-largest weapons exporter; almost 100,000 people work in industry. According to the Stockholm International Peace Research Institute, Germany controls 11% of global trade in conventional weapons. The country exports as many arms as France and Great Britain. Yet so far, German arms manufacturers haven’t had much luck in India. The country’s business landscape is complicated, with corruption playing a prominent role. It isn’t uncommon for companies to stumble over the inscrutable maze. Five years ago, for example, New Delhi cancelled a deal for helicopters produced by the European defense giant EADS on account of corruption investigations. In March, Rheinmetall Air Defense, a Switzerland-based subsidiary of the German automotive and defense company Rheinmetall, was banned from the Indian arms market for its involvement in a bribery scandal. “As far as I can remember, the last big deal India did with Germany was buying submarines, Class 209, in 1989,” says Rumel Dahiya, a retired brigadier general now serving as the deputy director general of the New Delhi-based Institute for Defence Studies and Analyses, which claims to be a “non-partisan, autonomous body,” though it was established in 1965 by India’s Ministry of Defense. When asked about country’s goals, Dahiya said: “We want as much technological transfer as possible. We want to build and assemble as much as possible in India because India’s arms industry wants to become independent”. Indian law requires that at least 30% of arms must be purchased from domestic suppliers. This allows the country not only to secure a share of the value-creation, but also to acquire more know-how. Such a sentiment may sound like a desire to one day produce in India the products offered by foreign manufacturers. But it is a blessing for German arms industry. German export laws impose requirements on arms that are viewed as restrictive when compared to those of other countries. As such, German arms companies have resorted to exploiting loopholes in the laws: They are only too happy to set up joint enterprises with companies in the target countries so they can manufacture products there. Individual parts delivered to these countries are not subject to same strict regulations that apply to finished products. Domestically, there is growing opposition to this practice, particularly among center-left opposition. “There is essentially no oversight on German arms exports,” says Jan van Aken, the speaker on foreign-policy matters for Left Party in Germany parliament. “And whenever things get difficult, the industry is quick to immediately move production to the target country.” Katja Keul, a member of the Green Party who sits on the Bundestag’s defense committee, complains that Chancellor Angela Merkel’s conservative coalition government effectively goes behind parliament’s back by making decisions on arms exports within the Federal Security Council, nine-member body made up of chancellor and several ministers that meets behind closed doors. “The German Bundestag doesn’t even receive information on the process after a permit has been awarded,” Keul says. “The relocation of production facilities of German arms firms abroad is difficult enough to control”, “but the government has unfortunately actively helped by approving licenses for them to manufacture abroad.” Still, Keul continues, issue is not ascribing blame to Merkel’s coalition government or being forced to acknowledge things were no better under the governments that preceded it (…..)

Link: http://www.spiegel.de/international/germany/growing-resistance-to-german-arms-exports-to-india-a-844934.html

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