Will U.S., India Pact Boost Defense Innovation?

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Driven partly by the necessity to pull highly effective international locations from the orbit of its peer opponents, the United States has entered into a brand new strategic know-how partnership with India, however regulatory hurdles might restrict the near-term affect of the settlement.

Announced on June 21 throughout a go to to the United States by Indian Prime Minister Narendra Modi, the India-U.S. Defense Acceleration Ecosystem, or INDUS-X, is supposed to “vitalize our defense industrial cooperation and unlock new innovations in technology and manufacturing … and help equip both countries’ armed forces with the capabilities they need to defend a free and open Indo-Pacific,” in keeping with a Defense Department launch.

An INDUS-X collaboration agenda launched the identical day outlined a number of “prospective actions” for stakeholders within the initiative to pursue, together with mentor-protégé partnerships and an accelerator program for start-ups; joint challenges “that leverage common dual-use cases for both countries” and an Indo-U.S. Joint Innovation Fund that can search non-public funding for protection tech.

“With support from our governments, closer cooperation between our private sectors and research institutions will catalyze innovation within our defense industrial bases,” a Defense Department reality sheet on INDUS-X stated. “Through INDUS-X, we will strengthen ties between our defense industrial ecosystems to make them more innovative, accessible and resilient.”

The Defense Department two weeks earlier than the announcement launched a “Roadmap for U.S.-India Defense Industrial Cooperation,” which recognized a number of “priority areas with [the] most cooperation potential,” together with: intelligence, surveillance and reconnaissance; undersea area consciousness; air fight and help, together with aero engines; munitions techniques; and mobility.

Other potential know-how areas for INDUS-X might additionally embody area, manned and unmanned plane, synthetic intelligence, quantum sciences and communications, in addition to “other critical and emerging technologies,” Rajiv Kumar Narang, senior fellow on the Manohar Parrikar Institute for Defence Studies and Analyses, stated in an e mail. In explicit, the Defense Department collaboration with Indian unmanned plane techniques and area know-how start-ups point out an increasing scope of innovation collaborations, he added.

Kenneth Juster, a distinguished fellow on the Council on Foreign Relations and former ambassador to India, stated in an interview that whereas there’s a broad vary of capabilities of curiosity to INDUS-X stakeholders, he’s “not aware of a specific target list of projects. Rather, the notion is that the technology and defense ecosystems in [the] two countries should work together and develop products jointly.”

Narang stated the “U.S. technological ecosystem coupled with Indian innovation [and] ingenuity … can [provide] Indian and U.S. defense forces high technology solutions at lower cost.” The hope is that India and the United States’ industrial bases “complementing each other and making … innovative and niche technology products at competitive cost” turns into “a habit” going ahead, he stated.

Ultimately, linking its protection ecosystem with India’s might play a key position within the U.S. strategic competitors with China, stated Sameer Lalwani, a senior skilled on South Asia applications on the United States Institute of Peace.

There is an “astonishing amount of innovation talent originating from India already in our respective deep tech ecosystems,” Lalwani stated in an interview. “As the United States tries to out-compete and out-innovate China, discovering companions with the need and capability to stream expertise with us goes to be at a premium, and India supplies this chance for us to pool and scale our analysis and engineering expertise pool.

“There’s this long-term play, I think, at stake, and INDUS-X is maybe the opening move in that long-term play of the linkage in our science-and-technology ecosystems,” he stated.

From the Indian viewpoint, INDUS-X just isn’t “targeted at China” as a lot as one thing that matches “the need of the hour” for each the United States and India, stated Konark Bhandari, a fellow with Carnegie India.

The struggle in Ukraine has quickly depleted the U.S. munitions stockpile, whereas India is making an attempt to “indigenize” its protection trade and modernize its army, Bhandari stated in an interview. “INDUS-X matches completely on this explicit case.

“If it works out, it will demonstrate how co-development and co-production of defense systems with countries like India could go a long way to replenish these munitions” for the United States, “and in the process, India could become a more” modernized army energy, he stated.

However, primarily based on previous Indo-U.S. agreements, there are a lot of questions on what INDUS-X may ship. In 2005, the 2 nations signed the “New Framework for the India-U.S. Defense Relationship,” which “laid the foundation for defense cooperation,” Narang stated. And in 2012, India and the United States launched the Defense Technology and Trade Initiative, or DTTI, which was meant to “to simplify transfer, co-development and co-production of defense technologies,” he added.

Lalwani stated that whereas each the brand new framework and DTTI “were steps in the right direction … I think there [were] still maybe mismatched expectations as to what” the partnership ought to entail.

“I think the Indians fundamentally wanted to be able to get access to technologies so that they could build things themselves and iterate their own designs for themselves and to maintain and sustain platforms on their own,” he stated. India’s priorities “might have been understood in some pockets of the U.S. government and Defense Department, but … if it was understood at the top, it was not being driven in that way by the U.S. side.”

Narang famous that U.S. protection gear exports to India rose from close to zero in 2008 to $20 billion in 2020, however “co-development and co-production with India made little progress.”

INDUS-X “is an appreciation of what India is seeking, and the United States believing that it is in the U.S. strategic interest to take on a larger coordinating role to help India get access to technologies, develop them on their own and co-develop and co-innovate technologies that will be a part of the U.S. and Indian defense supply chains,” Lalwani stated. “So, I feel it’s one other degree of partnership, if you’ll, and willingness to share.”

Bhandari stated: “Unlike the earlier initiatives, the place there [were] numerous expectations, the 2 sides now are form of practical. They’re realizing that in all probability we should always present some modest capital after which see how we will work with different assume tanks and incubators and have interaction with the opposite [venture capital] corporations to safe additional sources.

“So, I think for starters, there is a tempering of expectations and the realization that, let’s not start with some really ambitious targets which we might not be able to meet,” he stated.

Private firms and academia would be the “key drivers” of INDUS-X, Narang stated. Industry will lead “technology development while academic institutions and start-up accelerators [will] support them in technology development and scaling up production.”

Juster agreed the non-public sector stakeholders from trade and academia will drive the innovation, whereas the 2 governments “will likely be facilitators, making an attempt to stimulate and information the non-public sector.

“This initiative is an effort to work from the bottom up with the technology and defense ecosystems of the two countries to see if they can develop greater synergies,” he stated.

To guarantee profitable collaboration, a senior advisor group will assess progress and make suggestions to the protection institutions and different stakeholders, the Defense Department reality sheet stated. The United States Institute of Peace, Carnegie India, the U.S.-India Business Council, the U.S.-India Strategic Partnership Forum and the Society of Indian Defence Manufacturers “will convene follow-on programming to drive implementation of the collaboration agenda and identify barriers to implementation” for the senior advisor group’s consideration.

Identifying potential roadblocks is the seemingly first step for INDUS-X companions “before we see some big successes” on the know-how and innovation entrance, Bhandari stated.

One potential stumbling block — and an space the place each nations’ governments can play a key position — is coverage. India “struggled to establish joint technology development and innovation partnerships with the United States due to its legislative, policy and other challenges” following the 2012 launch of the Defense Technology and Trade Initiative, Narang stated.

The United States has a “well-established defense innovation ecosystem for international collaboration,” but it surely should make sure that its authorities businesses “are on one page for innovation collaboration and technology co-development with India,” he stated. Meanwhile, India “has to create policies and structures for joint development” to make sure there may be enough funding, testing, certification and procurement of the applied sciences and techniques developed by means of INDUS-X.

The public-private partnerships deliberate for INDUS-X embody easing laws for cross-border improvement and commerce, and standardizing Indo-U.S. certifications for know-how start-ups, the Defense Department reality sheet acknowledged.

“Government has a major role to play in the regulatory environment,” Lalwani stated. “Some of this is about lowering some of the barriers to business-to-business transactions — even if they’re between large, established defense primes and emerging, aspiring small [or] medium enterprises — and some of that is just the market signals” that present the federal government is “invested in the partnership between these two countries and these two countries’ defense innovation ecosystems.”

While export controls such because the International Traffic in Arms Regulations can’t be eliminated utterly, there are methods to regulate insurance policies to scale back “friction,” resembling rushing up the approval course of for licenses and technical help agreements, he stated.

“If things move faster, that means it’s costing companies less time to wait for these cross-national collaborations to bear some fruit, less time for them to be burning capital when they could be moving quickly in terms of their innovation cycle and their product developments and moving to commercialization,” Lalwani stated.

INDUS-X is “trying to reduce maybe some of the timelines that would otherwise deter a U.S. defense prime from even venturing to try to find an Indian partner to source a sensor system or the targeting pod or something like that.”

If U.S. firms know the regulatory processes are shifting quicker and that “there might be some cost savings on the other end, plus some extra juice from working with a designated strategic partner of the United States, they might be willing to invest that time and … submit through that licensing process,” he stated. “So, I think that’s where you might see immediate improvement.” ND

Topics: Government Collaboration, International, Defense Innovation