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  • OPINION: Firms must ignore procurement chaos to tap Indian riches

OPINION: Firms must ignore procurement chaos to tap Indian riches

India, says Teal Group analyst Richard Aboulafia, “is seen as a very big, but very difficult market”.

He describes the country’s military procurement process as characterised by “very long decision times, very heavy work and technology transfer demand ­involving a dysfunctional national champion, and of course frequent legal challenges which can be heavily politicised”.

Indeed, it might even be said that Aboulafia is too kind – India’s politics is fractious and politicised beyond the usual norms, and in any other major country it is doubtful that state-owned Hindustan Aeronautics (HAL) would still be supported.

Western suppliers who have enjoyed success in India could be excused for wishing a customer like New Delhi had instead chosen an arch rival. Dassault has spent years swirling in the miasma of Indian politics while trying to turn the selection of its Rafale fighter into deliverable reality.

For Leonardo, ultimately dismissed bribery ­allegations linked to an AW101 VVIP helicopter ­contract cost it a chief executive. With such obstacles, is it worth bothering to bid in India?

But for several reasons, India is a difficulty worth enduring. First, all signs are that military budgets in Europe and the USA will stay tight for the foreseeable future. There are not many big contracts to compete for.

Moreover, India really is big. It needs a lot of military aircraft just to patrol its own territory and faces growing external threats. Occasional enemy Pakistan is nuclear-armed and unpredictable. A regional great power rivalry with China is real – and potentially hostile.

China is bigger, but not accessible to Western defence suppliers. And India, for all its historical attachment to its “non-aligned” status, is broadly in step with the West (albeit an inventory also stocked with Russian-built hardware indicates a willingness to shop around).

Nobody should bet much money on reform in India, but neither should they entirely rule it out. The country would do well to streamline its procurement processes for the sake of operational readiness and taxpayers’ patience. Likewise, its industrial and technical capabilities are substantial but ill-served by HAL – which need not always be the only show in town.

Finally, the country’s broad stance – emphasising independence by avoiding reliance on any one strategic partner – may not be an anachronism. In an increasingly unstable geopolitical world, expect more countries to hedge their bets like India does.

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