Sunday, September 11, 2016

ShinMaywa US2 Seaplanes for India



This has been a long standing mystery: What is holding back the first major India-Japan defence hardware transaction - the sale of ShinMaywa US2 Maritime reconnaissance aircraft?

The US-2i is quite a unique aircraft, capable of short take-offs from land as well as water with a range of over 4,500 km. Powered by four big turbo-props, it can land even on rough seas amid three-metre high waves.

Perhaps this is just the sort of recce-aircraft that we needed while searching for the AN-32 that disappeared while flying from Chennai to Car Nicobar. The $1.65 billion defence deal was slated to be signed in the first quarter of 2016 with the first two aircraft delivered off-the-shelf and the remaining ten built under license in India.

The deal has been "under discussion" since 2012. Over the past four years there have been numerous speculative reports as to why an ostensible commitment at the highest levels of government, is yet to translate into action.

Today's Times of India states that Japanese defence ministry is trying to reduce the price-tag of the USD 1.6 billion for 12 aircraft in a bid to revive the deal. This is a new one. Until now none of the reports had claimed that the price was a sticking point.

Recently, India purchased six C-130J Super Hercules military transport aircraft for an estimated price of USD 1.2 billion. Even at the risk of comparing chalk and cheese, the price-tag for a a sophisticated amphibious aircraft does seem to be quite reasonable.

In fact the reasons for the delay stated so far have been:

Policy related -
  • Japanese side has been waiting for the amended Defence Procurement Policy-2016, which is yet to be available for the companies wanting to do defence business in India
  • Department of industrial policy and promotion is awaiting for Acceptance of Necessity (AON) from the Indian Navy
  • While Japan had been pitching for the sale of these aircraft as a special case, for the moment it did not figure on India’s list of priorities
Bureaucratic / Red Tape:
  • Deal delayed further as the next Defence Acquisition Council cannot take place, since there is no Chief of Integrated Staff (CISC) in place in the ministry of defence.
  • The major hurdle remains successfully navigating through the myriad of layers of bureaucratic red tape, something that Japanese defence contractors, given Japan’s self-imposed ban on exporting military hardware, have very little experience in doing.
The last reason sounds more plausible. Getting the bureaucracies in India and Japan to talk to each other must count among the most formidable challenges of today. Surely this is not merely a question of an inflated price-tag!

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UPDATES:

- (8 Nov., 2016) - Japan, India likely to ink pivotal US-2 aircraft deal - http://www.japantimes.co.jp/news/2016/11/06/national/japan-india-likely-ink-pivotal-us-2-aircraft-deal/#.WCFsZNV97IU
- “The sticking point then was India’s insistence that Japan relocate production to the ‘enth’ degree”

- ( 25 Oct., 2015) - INDIA, JAPAN RESOLVE PRICE ISSUE - Price concession of more than 10% brings down the cost of the US-2 planes from USD 133m to USD 113m per piece - https://inserbia.info/today/2016/10/india-japan-solve-aircraft-price-issue/

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LINKS & REFERENCES

* (11Sep16) - http://timesofindia.indiatimes.com/india/Japan-may-cut-price-to-ink-aircraft-deal-with-India/articleshow/54272792.cms

* (18May16) http://www.financialexpress.com/article/economy/indias-nod-to-buy-japanese-amphibian-plane-us-2i-to-face-further-delays/258215/

* (5May16) - http://thediplomat.com/2016/03/is-the-japan-india-military-aircraft-deal-dead/

* (28Feb16) - http://www.thehindu.com/news/national/japan-noncommittal-on-supply-of-strategic-amphibious-aircraft-to-india/article8290054.ece

* (12Dec15) - India-Japan Joints Statement 2025 - http://www.mea.gov.in/bilateral-documents.htm?dtl/26176/Joint_Statement_on_India_and_Japan_Vision_2025_Special_Strategic_and_Global_Partnership_Working_Together_for_Peace_and_Prosperity_of_the_IndoPacific_R


* (6Jan14) - http://www.thehindu.com/news/national/japans-amphibious-aircraft-not-a-priority-for-india-now/article5545706.ece.


* http://theweek.com/articles/575407/japans-defense-industry-super-excited-about-amphibious-plane
Japan and India have been discussing the sale of the amphibian since 2012. 
US-2's manufacter ShinMaywa traces its history back to one of the founders of Japanese aviation, Seibe Kawanishi. This Kobe-based industrialist made his fortune selling woolen blankets to the military during Japan's turn-of-the-century wars against Russia and China.
After the war, Nakajima's company became Fuji Heavy Industries — the parent company of Subaru, the automobile-maker.
 Kawanishi churned out 2,800 civilian and military aircraft between 1928 and 1945 — an average of 165 planes a year.
Building under license has always been Japan's favorite way to gain and maintain cutting-edge skills and technologies.
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