Indian cancellation of defense equipment orders hurts investor sentiment: Experts

A tender was withdrawn for short-range surface-to-air missiles, with Israel’s SPYDER system having been the front-runner. Supplied
Updated 18 June 2018
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Indian cancellation of defense equipment orders hurts investor sentiment: Experts

  • New Delhi scrapped a $500 million deal for Israel’s Spike Anti-Tank Guided Missile. Israel had agreed to transfer the technology to India, and had set up a factory in a venture with an Indian company
  • Modi wants the country to decrease its reliance on foreign firms, reduce its import bill and manufacture equipment in-house

NEW DELHI: The Indian government’s penchant for canceling or withdrawing tenders for defense equipment at the last minute is likely to hurt investor confidence in the country, experts said on Sunday.
New Delhi called off a $9 billion deal to co-develop with Russia a next-generation fighter aircraft, after the state-owned Defense Research and Development Organization (DRDO) said it would do the job in-house, Indian media reported this week.
Under the deal, a significant amount of the research would have been carried out in India. Russia had agreed to tailor the aircraft to Indian needs, and was to hand over all the technology, the Economic Times reported.
India is the world’s largest importer of defense equipment, and imports at least 90 percent of its equipment, including parts for assembly.
The government of Prime Minister Narendra Modi wants the country to decrease its reliance on foreign firms, reduce its import bill and manufacture equipment in-house.
But India lacks much of the high-end technology needed for such equipment, which is why deals where foreign partners agree to share technology are useful for its long-term plans, experts say.
When such deals are canceled, “it greatly reduces confidence in India,” said Saurabh Joshi, editor of StratPost Media Pvt Ltd., a defense news website.
“We can’t willy-nilly… accept arguments that a particular equipment can be developed and produced indigenously before such tenders are withdrawn,” he added.
“There should be an adequate test to develop and produce indigenously. Otherwise, we’re simply postponing an acquisition process by 10 to 15 years, and it’s the armed forces that have to go without critical equipment until then.”
Experts say one reason for the government canceling orders could be a lack of funds. The Russian deal is not the only one to be jettisoned recently.
New Delhi scrapped a $500 million deal for Israel’s Spike Anti-Tank Guided Missile. Israel had agreed to transfer the technology to India, and had set up a factory in a venture with an Indian company. The reason given for the cancellation was the same: To develop the missiles indigenously.
A tender was also withdrawn for short-range surface-to-air missiles, with Israel’s SPYDER system having been the front-runner, experts said.
On average, it takes a tender at least six years to go through the various steps before the final purchase order can be placed.
Any company that loses a bid has to account for that time and investment to its head office and its board, Joshi said.


Macron’s security aide charged over assaults caught on video

Updated 43 min 45 sec ago
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Macron’s security aide charged over assaults caught on video

  • The incident is the most damaging scandal to hit Macron since he took office last year
  • An aide to Macron and an employee of the ruling party were caught on video assaulting May Day protesters

PARIS: A former top security aide for French President Emmanuel Macron was charged Sunday along with an employee of the ruling party after they were caught on video assaulting May Day protesters, footage that went viral on social media.
In the most damaging scandal to hit Macron since he took office last year, Alexandre Benalla and Vincent Crase were charged with “gang violence,” Paris prosecutors said.
Three high-ranking police officers, already suspended on suspicion they illegally gave Benalla video surveillance footage of the incidents to help him try to clear his name, were charged with misappropriation of the images and violating professional secrecy.
The president has yet to comment on the scandal, but his office said Benalla was punished in May with a two-week suspension from active duty.
Yet Benalla continued to appear in Macron’s security details.
The opposition accuses Macron, who came to power on pledges to restore transparency and integrity to the nation’s highest office in order to ensure a “republic of responsibility,” of covering up for Benalla.
Benalla, 26, was fired Friday after video footage emerged showing him hitting a man at least twice as riot police looked on while breaking up a May Day protest in Paris.
Benalla, who was wearing a police helmet with visor as well as a police armband, was additionally charged with impersonating a police officer, as well as complicity in the unauthorized use of surveillance footage.
Interior Minister Gerard Collomb is to appear before parliament on Monday morning, with some MPs warning they will demand his resignation if he knew about the incident but kept quiet.
After publishing the first video of the incident last Wednesday, French daily Le Monde posted a second video showing Benalla violently wrestling a young woman to the ground during the scuffles on a square near the Rue Mouffetard, a picturesque Left Bank street.
Just days after the May 1 demonstrations, which were marred this year by anarchists who clashed with police, Macron had tweeted that “everything will be done so that those responsible will be identified and held accountable for their actions.”
In a third video, published by the Mediapart investigative news site, police officers are seen kicking and punching the young man even after he has been immobilized on the sidewalk.
The man and woman seen in the videos have come forward and plan to testify, a source close to the inquiry said.
The government has been forced to suspend debate on a constitutional reform bill after a revolt by lawmakers, who have announced investigations by both the National Assembly and Senate.
“If Macron doesn’t explain himself the Benalla affair will become the Macron affair,” far-right leader Marine Le Pen posted on Twitter.
“Why the devil did he insist on protecting a second-rank employee who should have been kicked out of the Elysee months ago?” rightwing daily Le Figaro asked in an editorial Sunday.
But ruling Republic on the Move (LREM) party spokesman Gabriel Attal defended the president’s silence.
If Macron speaks now, “we’d have indignant commentators everywhere saying his comments could influence the inquiry,” Attal said.
Adding to the controversy, Le Monde reported Friday that despite his suspension Benalla was allowed this month to move into a palatial mansion along the Seine reserved for Elysee workers.
He was also being provided with a car and chauffeur, the paper said.
Investigators have searched Benalla’s home in the Paris suburb of Issy-Les-Moulineaux, where a city hall official said Benalla was supposed to have married on Saturday.
The scandal could hardly have come at a worse time for Macron, whose approval ratings fell to a record low of 39 percent last week, defying analysts’ expectations of a post-World Cup bump.
“Macron defenseless,” the Journal du Dimanche said in a front-page headline on Sunday over a picture of the president and Benalla.