INDIAN INTELLIGENTSIA IN A SEASON OF CRITICIZING

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 008100

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DOS PLEASE PASS TO USTR

E.O. 12958: DECL: 11/29/2026
TAGS: PREL PGOV MARR MASS MCAP MOPS PARM IN
SUBJECT: INDIAN INTELLIGENTSIA IN A SEASON OF CRITICIZING
THE DRDO

Classified By: PolCouns Ted Osius for Reasons 1.4 (B,D)


1. (U) SUMMARY: The Indian intelligentsia has been harshly
critical of late of the efficacy of the Defense Research and
Development Organization (DRDO),the organization responsible
for designing and developing India's weapons systems.
Government officials have chimed in, blaming the agency for
cost and time overruns. The DRDO defended itself by pointing
its finger at the military for changing requirements
mid-stream, and analysts point out that money crises and
sanctions have played a role, but the agency has nevertheless
had to make changes in its procurement and funding policies
to weather the hailstorm of criticism. A "successful"
missile defense test recently has been viewed by the media
both as a "milestone" and a desperate attempt for good press.
While the DRDO may be overcoming its "foreigner phobia" in
terms of outsourcing and collaboration, its future is still
in doubt and somewhat dependent on the political climate.

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The Critical Media
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2. (U) The Indian media has lately been filling pages of
newsprint disparaging India's Defense Research and
Development Organization (DRDO) for cost overruns, delays and
non-delivery of weapons systems. "The Indian Express" (IE)
ran a seven part series entitled "Delayed Research, Derailed
Organization," while the November "Force" magazine cover
read, "DRDO: More Misses Than Hits." The DRDO, whose
mission is to "design, develop and lead to production
state-of-the-art weapons systems" for Indian defense
services, has around 50 laboratories and some 33,000
employees. The IE claims the DRDO has overshot estimates by
U.S.$1.34 billion in the last ten years. Failed projects
are said to include the guided missile program, the Arjun
tank, the Light Combat Aircraft (LCA Tejas),the Integrated
Electronic Warfare Program (Samyukta) and the Kaveri jet
engine. This cost overrun is reportedly larger than DRDO's
budget of U.S.$1.19 billion for the current year. According
to the IE, the DRDO's average time overrun is 10.11 years.
"Force" magazine argues that things have gone downhill for
the DRDO since 1980, when it began to take on high profile
development projects "with the aim of garnering funds, and
for closeness to the political leadership." At the time, the
DRDO and the defense services worked separately, says the
magazine. However, when the Soviet Union (India's top
weapons supplier) collapsed, the Indian military became
dependent on the DRDO. "As the DRDO failed to show results,
the defense services were forced to import equipment from
outside to fill operational gaps," explains the magazine.

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And Other Critics
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3. (U) Indian Comptroller and Auditor-General V.N. Kaul,
speaking at an international seminar on defense finance,
criticized the DRDO while speaking about problems in defense
procurement. "Defense R&D, with an outlay of about U.S. $1
billion, is an area where accountability often takes shelter
under the policy of self-reliance and indigenization becomes
a reason for delay," Kaul is quoted as saying. Outlining the
flaws of the defense industry as a whole, he claimed that
long delays in the procurement system mean technology is
often outdated at delivery, allotted funds go unutilized due
to poor projectand contract management, and quality
assurance systems are not modern.

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The Rebuttal
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4. (U) The DRDO defends its performance by blaming the three
military services, "who change their requirements while
development is in progress and spend too much time on
trials," the IE states. After weeks of sharp criticism in
and outside the press, the GOI announced deadlines for five
of its high profile projects. The Integrated Guided Missile
Development Program is to be completed by the end of 2007,
the final operational clearance for the LCA Tejas by 2010,
the Samyukta by November 30, 2007, and both the Command
Information Decisions Support Systems for Army Commanders
(Samvahak) and the Naval Indigenous Electronic Warfare
Program (Sangraha) by the end of this year. In a response to
a question in the Parliament of India, Defense Minister A.K.
Antony wrote November 23, "The fact is that due to genuine
technical difficulties, some of the projects were delayed,
but these are nearing completion and, when developed, they
will be equipped with current technologies with a useful life
of about 20-25 years." He also promised that stringent
review and monitoring mechanisms have been put in place, says
the IE.


5. (C) K. Santhanam, former DRDO Secretary and Science
Advisor to the Defense Minister, told PolOffs that criticism
of the DRDO had been misplaced, noting that the DRDO is
merely a research organization, and production delays are not
the fault of the organization. When asked if the DRDO would
be around for the long term, Santhanam said the organization
would remain in place, joking that, "Indians do not kill
animals, nor government agencies." "Hindustan Times" foreign
editor Pramit Pal Chaudhuri echoed that sentiment in a
November 16 meeting, offering, "The army doesn't like the
DRDO. It is easy to find old military chiefs to disparage
the DRDO."

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The DRDO Proposes a Shareholder Scheme
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6. (U) In response to criticism that it had failed to
deliver to the army, the navy and the air force, but had
drained its resources despite that, DRDO Chief and Science
Advisor M. Natarajan proposed a shareholder scheme in which a
new pattern of funding will tie both the armed services and
the private sector into its projects. On November 14,
Natarajan told a gathering of experts on investments in
defense research that the organization had assessed its
strengths and weaknesses, and candidly stated, "we assumed a
scientific base, but it was inadequate," reports "The
Telegraph." Natarajan reportedly said, "The DRDO is not a
manufacturer. Its primary job is to create capacity," and
blamed the media for "uninformed reporting" concerning cost
and time overruns, states "The Hindu."

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The Lost Years
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7. (C) While the DRDO can't deny overruns, its downward
spiral can be tracked, explained "Hindu" Special
Correspondent Sandeep Dikshit in a November 15 meeting. With
the collapse of the Soviet Union in 1991, paired with India's
own foreign exchange crisis, India found "no love or money"
to support the DRDO. "Then, once the money came back, the
sanctions came," said Dikshit, referring to the 1998-2001
sanctions following India's nuclear test. In the late
1990's, the DRDO was plagued by human resource issues as
India became an "IT Superpower," and brighter people fled the
DRDO for higher paying jobs in the IT field. After that
exodus of talent, there was an erosion of enthusiasm,
according to Dikshit. "It became bureaucratic," he said,
adding "Research is driven by passion, and there was none."
As a result, the DRDO today is not innovative and capable
only of serial production, with no clear policy directive
behind it, opined Dikshit. Another plague to the Indian
defense research industry, Dikshit pondered, is that India's
weapons acquisition plan has not been equal to its financial
allotments. "There has been no preparation of a long-term
financial plan that is married to an acquisition plan," he
said, noting that the defense procurement policy had been
revised no less than four times in the last six years.

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"A Resistance to Everything Foreign"
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8. (C) India has had a "mind-block when it comes to
collaboration" with other countries, commented Dikshit.
"There is a resistance to working with foreign universities -
in fact, a resistance to everything foreign," Dikshit
remarked. Chaudhuri felt similarly, observing, "the DRDO
and the Indian ministry says it can't trust the U.S. as a
supplier." Despite this, Dikshit feels the Indian outlook is

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changing, citing cooperation with the UN and joint technology
operations with the U.S. as helping the Indians to see that
outsourcing and foreign cooperation does not necessarily
increase security risk.

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Missile Test: Moment of Success or Act of Desperation?
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9. (U) On November 27, in what was touted by one scientist
as "a milestone," the DRDO "successfully" launched two of its
surface-to-surface Prithvi-2 missiles from two different test
ranges on the Orissa coast, intercepting one of them over the
Bay of Bengal, according to "The Hindu." "The Pioneer,"
however, reports that the launch "wasn't exactly a
frightfully impressive display of indigenous technology or
power," claiming that the organization has "desperately
pulled a little known program out of the bag" to claim its
Integrated Missile Development Program is doing well. (Note:
DAO is reporting on the technical aspects of the test
through military channels. Post is also reporting on the
test septel).

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Comment: Has the DRDO Reached Its Shelf-life?
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10. (C) Santhanam assured us that the DRDO will "keep
limping along," and that's probably an accurate assessment.
The defense ministry's latest procurement policy allows for
private sector offsets, which will likely make DRDO a highly
unattractive investment option. In 23 months, the Parliament
Committee on Defense plans to release its report on the DRDO.
In addition to the results of that report, the political
climate at the time of its release will largely influence the
future of the organization. DRDO may survive, but its days
of setting "milestones" for India's defense industry appear
numbered.
MULFORD