Since the inception of India's National Defence Offset Policy in 2005, it has been seen as the game changer for the Indian defence industry, hoping that will be the big boost in the tireless pursuit of advance technology. But the cumbersome policy with unsound IPR regime have led to insignificant transfer of technology writes Dr. Ajay Batra.

Photo Credit : BW Businessworld,

Back in 2005, when India evolved the National Defence Offsets Policy, it was touted as the one of the game changing reform that would make India an Aerospace hot spot of the world. After all if Korea, Japan, Brazil, Singapore and Israel can do it, India can do it too. Fast forward a decade plus, the policy has not yielded what it was designed for.  Lack of holistic approach towards this transformation, we brought in toothless regulation, signed countless treaties/agreements, brought no paradigm changes in our IPR policies, lacked commitment to cyber security concerns of developed nations, did not evaluate our current aerospace Industrial preparedness or bring in changes of transparency & speed into the Judicial processes. And yet we are hopeful to get the most prized assets of Developed Countries i.e. Technology, that too in a troubled & cyber insecure environment. We are chasing only a mirage to be able to get Transfer of Technologies. We created unempowered institutions designed to be marred with red tape and setup for failure to achieve the desired goals. 

Are we headed in the right policy direction to influence USA, Europe and other Developed countries to provide us Transfer Of Technology? Do we need a much broader policy with head in the air and feet firmly placed on ground. Are there lessons to be learnt from successful technology transfers from countries like Japan, Singapore, Israel, South Korea, Brazil and Malaysia? It is not difficult to see that there is one common thread that runs across these countries - the political alignment with Transferor country; industrial readiness & IPR Policy, Judicial transparency & speed and above all if it serves the economic & geopolitical interests of the Transferor nation. 

Technology Transfers &  Intellectual Property Rights Policy 

Technology Transfers between countries is a culmination of decades of political alignment and complex policy frameworks to suit geopolitical pursuits. Take the case of Japan, Singapore, South Korea, Malaysia and Israel. Rapid technology transfers and industrialisation of all these nations since 1950 bear a direct result of the above said principles. 

Historically successful technology transfers between transferor and transferee nations are directly proportional to a symmetric institutional relationship between  IPR policies- Industrial preparedness and Judicial environment- Cyber Security

Investments of billions of dollars in technologies developed with decades of R&D of complex systems (Aerospace, Kinetic & Marine) are embodiment of knowledge(Patent or Confidential information) influences the diffusion and cost of technology. Given the controversy on the cost of recently acquired fighter aircraft by India, follows the principle of industrial readiness and diffusion of technology; its cost point is dependent on the scope or integration of a firm and its barrier to entry encountered by potential new suppliers in the transferee country.

 A new dimension/principle in the last decade has been industrial thefts giving rise to complexity in technology transfers to nations surrounded by such rogue states.  Finally, market considerations in perfect market conditions with aligned IPR policies allow transferor nations to transfer technologies/IPRs or produce the same through 100% subsidiaries in transferee countries. In asymmetric market conditions where there are large gaps in the above three stated principles; technologies are not sold/transferred but kept confidential. 

Scorecard of Defence Cooperation Treaties (DCT) 

India’s defence cooperation treaty partners comprise erstwhile USSR and now Russia, France & USA. Strong economic, military and geopolitical interests and India’s geographical proximity to China & Afghanistan have placed her as the lynchpin in South East Asian counterbalance against our northern neighbour. In respect of the DCT scorecard of providing technologies to Indian Defence Public Sector and Defence Private sector, none of these countries have provided technologies that see emergence of defence or hitech industry in India. Considering the record of USA in supplying TOTs to Japan, Singapore, S. Korea & Malaysia is unrivaled as compared to other nations. The Russians have supplied license based production know-how but not technology. It is well known that Russians have not supplied technologies historically to any nation except for some media reports of transfer of technology to China in the recent years. The unease & subsequent failure of transfer of technology under the FGFA with Russia and lack of institutional level interaction between the two countries provides the writing on the wall whether we can rely on these countries.   Given the limited experience with France, there is little to guess the winner of the pack who can be trusted for honouring the commitments of technology transfers. The answer lies in high serviceability of Mirage aircraft until the maintenance agreement and its immediate drop there of. There still isn’t any technology transfer that can support working of these aircraft in India.

It is pertinent to think of a national technology & industrial strategy for at least half a century. Another important question is to understand from India’s perspective what technology is good for India that has strategic continuation of flow of technologies until the end of the century.  A case in example being Japan, with a strategic technology transfer relationship with USA of close to a century holds the keys to 55% ownership of the most sophisticated technologies in global Aerospace supply chains. In deciding so, India must carefully chose not only a nation as a technology partner but also partnership with a corporation that can continue to provide next generation military or civilian aircraft in order to keep the interdependent-complex-global supply chain partnerships flowing. 

 Amongst the probable DCT partners that would convert to Technology Transferor’s, USA stands tall in honouring its obligations despite numerous policy restrictions, political changes and restrictive nature of technology transfer in case of key technologies to even their partners Japan, S Korea, Brazil, Israel & Malaysia. In contrast Russia and France, despite of their half-a-century DCT relationship with India & other nations have not transferred sophisticated technologies that would have enabled India or other partners to build its own aircraft, weapon systems, marine or kinetic industries. 

Stage II Growth of Technology Transfers 

There have been a spate of discontent on Technology Transfers and technology- jurisdiction of transferred technologies between US & Japan on the Rising Sun Fighter- the FSX fighter since late 1980’s and the KFX fighter of South Korea recently. The US Political & Industry’s protest in transferring key technologies and even allowing Japan & Korea to develop a fighter platform is a novel dimension to be factored-in for future Indian industrial interests. US has been pressing Japan to use the F-16 blueprint  or its derivative in allowing Japan to develop the rising Sun fighter aircraft to suit its economic and political interests. The Japanese aren’t too happy about the development and hectic parlays between White House and Imperial Diet have put its fighter development into jeopardy. Clearly the Japanese Industry is quite unhappy despite of it capabilities. The rules of decision making authority in deciding the final design configuration and Technology Transfers in its future must be indisputably clarified in the beginning to any partnering country. 

Similar dispute has been brewing with South Korea’s ambition to build its own fighter KFX, with US disallowing transfers of Core Technologies it considers useful for its aerospace supremacy. That’s at least one less surprise in our expectations and allow us to begin our industrial journey asap instead of democratising our decision against favour of National Security and Industrialisation of our country. 

Key American defence think tanks that oversaw the technology transfers between USA and their partners, have over of century of experience in governing technology transfers. They actively built frameworks to regulate and further technology transfers as key leverage to geopolitical interests and even control future development of key components of aerospace technologies. 

The Part 2 of the article will underline the key policy tenets to be considered before constituting a policy that made historic successes with technology transfers sustainable. A holistic & global best practices approach to bring about a structured transformation through TTRA as a single point agency ( partially on lines of TDRI, Japan & RAND Corp in the US) in achieving the ultimate objective of transforming India into an Industrialised economy using Technology Transfers in Aerospace & Defence for seeding Air, Kinetic & Marine industry with state-of-the-art technologies & sustainable HR Development.