Private sector collaboration is next great phase of Indo-U.S. defence ties: Atul Keshap

“Anything made in the US and India — if we make it to the right standards — could be scaled out for all of the free countries of the world,” says the president of the U.S.-India Business Council

Updated - June 12, 2023 01:56 am IST

Published - June 11, 2023 08:28 pm IST - NEW DELHI

U.S.-India Business Council (USIBC) president Atul Keshap. File

U.S.-India Business Council (USIBC) president Atul Keshap. File | Photo Credit: PTI

Defence technology collaboration between the private sectors of India and the United States is really the next great phase of cooperation for “the two greatest democracies on earth”, according to Atul Keshap, president of the U.S.-India Business Council (USIBC), who added that whatever the two countries can do together will benefit the rest of the “free countries” of the world.

“I would add from a business perspective, private sector is where India truly shines and where India truly shows that it can deliver amazingly high quality components that are a great level of fidelity, timeliness and price. And so this private sector to private sector collaboration is really the next great phase of U.S.-India defence cooperation,” Mr. Keshap, a retired U.S. diplomat, said in a virtual conversation with The Hindu on various initiatives in the pipeline ahead of Prime Minister Narendra Modi’s visit to the U.S.

Sending a signal

The India-U.S. Defence Acceleration Ecosystem (INDUS-X), a new initiative to advance cutting-edge technology cooperation which Mr. Keshap described as a ‘wedding mela’, is set to be hosted by the USIBC on June 20 and 21. It is designed to complement existing government-to-government collaboration by promoting innovative partnerships between U.S. and Indian companies, investors, start-up accelerators, and academic research institutions.

“I think our ‘wedding mela’ on June 20-21, INDUS-X, is a good sign between the Indian Ministry of Defence (MoD) and the U.S. Department of Defence of the signal that they’re sending to American and Indian companies that now is the time and this is the moment,” he said.

On U.S. Secretary of Defence Lloyd Austin’s visit to India last week, Mr. Keshap said that it was a clear signal by both governments that they realised that each has to be the other’s preferred defence partner. “What I see is our two defence industries basically coming together to see how we can drive down costs for the taxpayer, how we can enhance capability,” he added.

‘Converging strategic perspectives’

Geo-strategically, these are very unsettled times and there is a rising apprehension about great power struggles, Mr. Keshap said, adding that while India had experienced this first-hand, Americans were also increasingly concerned about what the future may hold. “And so Secretary Austin’s visit and the agreements that have come out of it reflect an increasing convergence of strategic perspectives by Delhi and Washington that we should do more together, that the great democracies need to lean on each other and rely on each other for mutual defence,” he said.

In this regard, he stressed that one thing that is really critical in defence is to have a credible deterrent. India and the U.S. realised that a credible deterrent was the single greatest way to ensure peace, said Mr. Keshap, explaining that deterrence means that anybody who might try to start something thinks 10 times before they start something.

Cooperation roadmap

During Mr. Austin’s visit, India and the U.S. finalised a roadmap on defence industrial cooperation, which will guide the direction of policy for the next few years. U.S. National Security Adviser Jake Sullivan is scheduled to visit India this week to finalise the agreements and modalities for Mr. Modi’s visit. In January, he and his Indian counterpart Ajit Doval launched the Initiative on Critical and Emerging technology (iCET), under which several co-development and co-production initiatives are under discussion, including jet engine cooperation. Apart from defence, the major focus areas under iCET are semiconductors, cyber and space. “I think from a U.S. perspective, it’s good to have the semiconductor production in India. It is a deleveraging of risk because of over-concentration of that capability in geographies that are vulnerable,” Mr. Keshap said.

On the overall trajectory of the relationship, he said that America had technological proficiency and capability which had been proven on the battlefield. For a country like India that increasingly has the resources and desire to field an absolutely world-class deterrence, American technology is going to be a part of that, including Indian access to cutting edge technologies, he said.

Building for the world

“Our bureaucracies are political systems, our governments have to overcome their own desire to stick to their own procedures, and they have to really make that effort, and I think Secretary Austin’s visit proves that. I think INDUS-X and iCET prove it. This is a new era and we have to break down barriers and build meaningful ties and defence cooperation,” Mr. Keshap remarked.

Of the 200 member companies in the USIBC, a third are Indian, and two-thirds are American, while a very few are also global companies, according to Mr. Keshap. “Anything made in the U.S. and India — if we make it to the right standards — could be scaled out for all of the free countries of the world,” he said, adding that INDUS-X was a very potent opportunity for business to business collaboration, which creates the necessary scale and capabilities.

EXCERPTS:

There were lot of statements during the visit of U.S. Secretary of Defence Lloyd Austin and there are several things lined up leading to the PM’s visit. Can you encapsulate what’s underway in the India-US relationship?

Let’s start with the broader context. We had very tough years in our relationship, 1971 onward. There’s been almost 30 years of sustained effort by both the Indian and American systems, by politicians, bureaucrats, diplomats, military officers and think-tankers and so many others to bring us to a point of strategic, economic and technological convergence. We have come an enormously long way in the modern relationship between the U.S. and India. So when you think about it, geo-strategically, these are very unsettled times and there is rising apprehension about great power struggle. India has experienced this first hand and we also are increasingly concerned in the U.S. about what the future may hold. And so I think Secretary Lloyd Austin’s visit and the agreements that have come out of it reflect an increasing convergence of of strategic perspectives by Delhi and Washington that we should do more together, that the great democracies need to lean on each other and rely on each other for mutual defence. One thing that’s really critical in defence is that you have to have a credible deterrent. And I think that India and the U.S. realised that a credible deterrent is the single greatest way to ensure peace. Simply spoken deterrence means that anybody who might try to start something thinks 10 times before they start something. That is actually a great way to ensure peace for all of our people so that we can focus on prosperity, happiness, human development, the lifting of people out of poverty.

I think both governments having now come to a zone of strategic convergence where they have the same perspectives on the challenges around the geostrategic situation. Now realise that there is much that we can do together to ensure enhanced deterrence. And deterrence means having capability, to have the fighter planes and the missiles and rockets, people and the capability that will make anyone else think twice, thrice, five times. What I see from Secretary Austin’s visit is a clear signal by both governments that they realise that each has to be the others preferred defence partner.

And see how far we’ve come. America has technology. It has capability. It has, I think, proven reliability, proven capability on the battlefield, proven technological proficiency and certainly that has been reinforced in the last couple of years, how excellent American military technology is, and for a country like India that increasingly has the resources and desire to field an absolutely world-class deterrence, American technology is going to be a part of that. I’m very happy that there’s been this clear statement that they are looking to “change the paradigm for cooperation” between the U.S. and Indian defence sectors, including Indian access to cutting edge technologies. That’s a very positive and profound statement by the U.S. government, and it’s going to create a very strong pathway forward. If we overcome our rather considerable bureaucratic procedures and can really embark upon meaningful technology cooperation, it’s going to be transformative for the U.S. and India and it’s going to be transformative for all of the free countries of the world.

There are lot of discussions and announcements regarding co-development and co-production which also includes jet engine technology, land systems and so on. So leading up to the Summit what are the big deliverables expected?

We are privileged at USIBC to be hosting the INDUS-X meeting on June 20 and 21, which will bring leading Indian and American defence manufacturers together under our roof at the USIBC to look at what exactly is possible in terms of the next phase of U.S.-India defence collaboration, co-production, co-development. We’ve already had a pretty strong track record just in the past few years. We have Indian and American companies partnered together to build things like major components of the Lockheed Martin C-130, the Sikorsky helicopter... F16 wing elements are made in India. This is now intensifying and that there is a lot more that can be done. So by having what I affectionately calling a ‘wedding mela’ at the chamber between American and Indian defence companies, we will see now what possibilities exist. I have met Indian companies that make turbine blade components for turbine engines. That’s a remarkably high-tolerance piece of metallurgy for aircraft engine parts. There is so much more that America and India can be doing together. Frankly, Indian companies are increasingly developing their capability and they have a price point, an impact and a reliability that’s very attractive. What I see is our two defence industries basically coming together to see how we can drive down costs for the taxpayer, how we can enhance capability. And an urgent need, as well as speeding up production, you can’t have a deterrence if you don’t have the very basics of deterrence. Bullets, shells, rockets, missiles, aircraft and helicopters to launch them, ships, etc. You need these things and you need more and more of them. People say it’s too much money spent on defence. I say spending on defence is cheaper than spending on war. We should have that credible deterrence. So I would leave it to the two governments to announce any news about any technological cooperation.

What I can say is that when you look out from Washington and certainly from Delhi, you realise the world is an increasingly unstable and dangerous place. So you need that stability and great democracies need to be strong. As our two bureaucracies realise that they have to overcome their own bureaucratic constraints and learn a new way to do business particularly with each other, then we can approve more and what we can see, both governments approving more and more of these technology collaborations. Because in a world where so many military secrets get stolen through espionage, cyber hacking, whatever, the governments and bureaucrats are going to be necessarily very cautious about sharing of technology. But we have to overcome that between the U.S. and India because we are the two greatest democracies on Earth, and whatever we can do together is going to benefit all of the other free countries of the world. So I’m actually very bullish and optimistic.

I think our wedding mela on June 2021 INDUS-X is a good sign between the MoD (India’s Ministry of Defence) and the DoD (U.S. Department of Defense) of the signal that they’re sending to American and Indian companies that now is the time and this is the moment. I would add from a business perspective, private sector is where India truly shines and where India truly shows that it can deliver amazingly high quality components that have great level of fidelity, timeliness and price. And so this private sector to private sector collaboration is really the next great phase of U.S. India defence cooperation.

In that respect, there’s a lot of push towards private sector cooperation from India. So are there any concerns with respect to privacy and cyber security and so on?

Let’s take the longview again. 1994 when I joined the U.S. Foreign Service, India was on a very short list of countries for which we had the highest level of technology denial. And look how far we’ve come that we have two governments now basically saying not only do we trust India, but that under the iCET initiative which we launched at the U.S. Chamber of Commerce in January, Gina Rimando and Agito Wall and Jake Sullivan did in fact on all of the crucial deep tech future tech proposals, we’re going to work together. So defence is just one of them. Cybersecurity, outer space defence, semiconductor chips, artificial intelligence, quantum computing, 5G/6G everywhere where there is an apprehension about technology bleed toward countries that may not share our worldview, we are clinging to each other. This interesting defence ‘marriage mela’ is just one part of a broader industry iCET collaboration related to technology. We will see more and more steps by both governments to ensure that the critical technologies for the future happiness and prosperity of our peoples exists within a circle of trust. We have to protect that circle of trust from people who have a long track record of trying to steal our technological edge. Our people in our free academic systems and our free innovation societies have developed world-class products. We got to protect it. So, the U.S. and India have shown that we trust each other. We have iCET, we have INDUS-X. We now need to make sure that our systems for protecting that information are really as strong as possible.

Can you give an overview of INDUS-X and what are your expectations from the two-day event in Washington? Also, an overview on the larger iCET framework?

There are 200 member companies of the U.S. India Business Council and one-third of them are Indian and two-third are American and very few are also global companies. But they are the leading companies in the U.S. and India, and the reason the U.S. government and the Indian government come to the U.S. Chamber and to USBIC to host these things like INDUS-X and iCET is that we represent the voice of industry. We represent the capability of the American and Indian industrial enterprises and on INDUS-X specifically, I keep saying wedding mela because what we want, what both governments want is for American and Indian companies to make commercial relationships, convert commercial partnerships that will help build the defence systems of the U.S. and India for decades to come. And mind you, anything that we build together is probably going to be NATO-standard for any other country around the world that shares our values. Anything made in the U.S. and India if we make it to the right standards, could be scaled out for all of the free countries of the world. So that’s a very potent opportunity in INDUS-X in that business to business collaboration is what really creates the scale and the capability because our businesses are where our technology resides. It doesn’t reside in the Pentagon. It resides in the companies and I think that’s how we’ve done business for decades... India increasingly has companies that are very sophisticated. And so getting that marriage going is really important.

On iCET, obviously, semiconductors are a huge priority. There’s a business cycle and there’s all kinds of intricacies to making semiconductors. You need to have incredibly efficient supply chains, very clean water, electricity. It requires tens of billions of dollars of infrastructure and investment. Under iCET, which we helped launch in January, semiconductors is a really important component. We have to see what can be done to intensify US-India collaboration on semiconductors. I was with Minister Ashwini Vaishnaw (Minister of Railways, Communications, and Electronics and Information Technology) in California a few weeks ago and we had some really detailed discussions with innovators and leaders in Silicon Valley about how you build a semiconductor ecosystem. And it’s abundantly clear the Government of India is doing diligent, deep research on how to make that happen in India and putting significant amounts of money into making sure that can happen in India. And I think from a U.S. perspective, it’s good to have the semiconductor production in India. It is a deleveraging of risk because of over-concentration of that capability in geographies that are vulnerable.

We’ve talked about space and remote sensing and near Earth orbit stuff. We’ve had about three different events at the chamber where we’ve brought together 40-50 companies with leading government officials from both the U.S. and India. I think there’s unlimited possibility in terms of space communications, remote sensing, space exploration and there may be also space defence applications as well between US and India. 5G/6G, ample discussions between the National Security Council of the U.S. and the National Security Council of India. India has made huge progress on its own 5G stack, it’s extremely impressive. The U.S. and India are getting into the game in ways that will frankly help ensure the privacy and security of communications for free people all around the world. And then they get into things like artificial intelligence and quantum computing, where frankly, I’m not even qualified to talk about it. It’s clearly deep and future tech. The U.S. leads the world in these things and but we have competition, more competition than we’ve previously ever had. And that’s where the U.S. and India are natural partners. I’ll give you just one insight, one-fifth of all the semiconductor designers on this planet are Indian. That’s pretty impressive and on AI and Quantum, that’s probably true as well.

So leveraging American and Indian capital, American and Indian know-how, American and Indian values... I think we’re going to be very strong in all of these areas. One that we also have to talk about as cybersecurity, defending our innovation ecosystem, defending our technological advances. So at the U.S. Chamber, as the voice of American business, we feel very bullish about where things are going between the U.S. and India. We feel very good that our governments have realised coming through the pandemic that they actually can trust each other even more than before. These are very positive things. We have some deals that are hanging, General Atomics drones, F-18s and other stuff in the pipeline. Let’s see what may or may not get announced, but what’s interesting about Secretary Austin’s visit is it reflects how important we are to each other, especially when you look at the lessons that some of them in the field of combat, not only during the pandemic but during the Russia-Ukraine war, it is clear the U.S. and India have a lot more we can do together. Our bureaucracies are political systems, our governments have to overcome their own desire to stick to their own procedures, and they have to really make that effort, and I think Secretary Austin’s visit proves that. I think INDUS-X and iCET prove it. This is a new era and we have to breakdown barriers and build meaningful ties and defence cooperation.

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