US defence deal: the inside story

The delicate negotiations that led India and the US to announce on Monday that they had “agreed on the end-use monitoring arrangements” for bilateral defence deals were as much contentious within the Indian government as they were in getting the Americans to accept New Delhi’s formula. Defence minister A.K. Antony diluted his long-standing opposition to foreign inspection of military assets bought from America after he was shown documents where the men in uniform under his oversight had arbitrarily put in what they chose to fit into contracts with the US. The external affairs ministry revealed at an inter-ministerial meeting that some provisions put in by India’s defence personnel into recent contracts with America were far more objectionable than anything that Washington was asking New Delhi to sign as an over-arching agreement. External affairs officials shocked many of those who attended the inter-ministerial meeting when they further revealed that these provisions had been suo motu inserted into contracts without political clearance by the foreign office, and worse, without even their knowledge. “It was like being more loyal to the king than the king himself,” said an official who attended the meeting. “In their desire to get American war toys, individual senior officers were willing to do what the Americans had not even asked.” Foreign minister S.M. Krishna, who was continuously abroad for most of this month and then in Bangalore because of a bereavement, was comprehensively briefed on the history of the tortuous end-use pact negotiations on the eve of his meeting with US secretary of state Hillary Clinton. He agreed to go along with the “arrangement” when he was convinced that a standard, agreed text would prevent individuals from taking advantage of the secrecy in arms deals and manipulating clauses on purchase agreements as they pleased. Officers of the ministry of defence and finance or those in charge of public sector defence production enterprises have now been restrained in their freedom to craft end-use clauses while buying American equipment or technology. Officers negotiating arms sales with the Americans will henceforth have to stick to the exact text of standard clauses of what can and cannot be allowed as end-use monitoring by the US. This standard text has large elements of the model monitoring agreement that the US signs with other countries that buy defence equipment. But it also borrows heavily from the end-use certification requirements that Delhi imposes on countries that acquire Indian defence equipment. “We even go to military bases in foreign countries and physically count the guns and other material long after we have sold or given them to those governments,” said one official. He said it would have been “a double standard if India continued to tell the Americans that we can do something to other governments, but that they cannot do it to us.” Once people in the Indian government settled their differences, the next task for South Block was to sell the “arrangement” to the Americans. It helped that Antony had made it clear to US national security adviser James Jones last month in New Delhi that the UPA government would be unable to politically sell the idea of a comprehensive end-use pact that allowed the US access to Indian military bases for inspections and had other intrusive clauses.Jones returned to Washington and reported what Antony had said. US sources said President Barack Obama, defence secretary Robert Gates and Clinton understood the political compulsions of the UPA government: they are in such situations themselves on almost a daily basis.But US officials down the line were unwilling to agree to the Indian formula, complaining that New Delhi was always getting exemptions from US laws and standards as in the nuclear deal.During an hour-long meeting at the White House on the eve of her departure for Mumbai, Clinton got Obama’s personal clearance for the “arrangement but no agreement” formula.From multiple US accounts yesterday, Clinton told only a close circle in the state department about the “arrangement” until she was in New Delhi. As a result, her officials in Washington continued to talk about an end-use monitoring agreement to be signed between the two sides when that was actually not to be.

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