Which Is Better – To Lease Or To Purchase, In Defence Acquisition?

The Indian Navy leased, last year, two Predator B Sea Guardian drones to enhance its surveillance capabilities. The Indian army, for the first time, leased armed drones from Israel. To be precise, 4 Heron TP attack drones. There is news in air that the Indian Air Force is considering the French Offer to lease six Airbus multi-role, mid-air refuellers.

Similarly, many sources had claimed last year that the Indian Navy is in the final stages of negotiations with American aviation supergiant Boeing for leasing 15 – 18 F/A-18 Super Hornet Block III. These are to be used in tandem with the existing and problematic fleet of MiG-29K fighters for both Aircraft Carriers – INS Vikramaditya and the upcoming INS Vikrant.

These are a few examples that suggest the main goal is to Leasing Military Equipment to Maintain Preparedness! A natural question arises: Which option is better – To Lease Or To Purchase, In Defense Acquisition?

DAP-2020

The new Defence Acquisition Policy, DAP 2020, allows the leasing of military hardware. DAP 2020 lays leasing conditions (of either new or used equipment) when it is a better option than an outright purchase.

These include conditions when traditional procurement is not feasible due to time constraints when equipment is used for a shorter duration, when lease rental is more economical than paying one time, high acquisition cost, and finally, when the equipment is used to gain operational use experience.

Bureaucratic Hurdles For An All-Out Purchase

All three Armed Forces services are currently lagging due to the prolonged delays and cumbersome acquisition of defence-related hardware.

The bureaucracy and Public sector companies caused a continuous delay in signing deals for Light Combat Helicopter (LCH), Light Utility Helicopter(LUH). The purchase of Russian Kamov KA-226T to replace Cheetah and Chetak helicopters’ aging fleet is still under discussion.

Even the MMRCA tender, first floated in 2001, is still going on. Though, now renamed as MMRCA 2.0 after the urgent Government to Government deal for 36 Rafale fighters.

These overlong processes make us believe that the leasing of military hardware can be a viable option.

Feasibility Of Leasing

Another factor that indicates that leasing military equipment might be a good option is that many Indigenous projects are already going on. They will take a decade or a few before materializing into reality. Be it AMCA, indigenous fifth-gen stealth fighter. Or TEDBF, Naval Tejas with enhanced capabilities, two engines, or other such projects like Wingman drone systems and swarm drones.

These need some time, and armed forces need some modern technology-based systems. In such a situation, leasing of such systems will provide a breather.

For example, leasing F/A- 18 Super Hornet Block III enables the Navy to secure its operational capabilities while waiting for indigenous TEDBF to become fully functional.

The Armed Forces, Navy, in particular, have good experience of using leased equipment. INS Chakra is an Akula class Nuclear submarine leased from Russia in 2012.

From all this, we can say its good choice for Leasing Military Equipment to Maintain Preparedness!

Global Position On Leasing

Many Armed Forces across the globe had opted for leasing.

The US leased ships to augment military capabilities in World War II, the Korean War and the notorious Vietnam War. UK’s Royal Air Force leased P-8 maritime reconnaissance aircraft. Japan leased its TC-90 trainers to the Philippines.

Italian Air Force had leased 30+ F-16 fighting falcons from USAF. Norway, Denmark, too, had leased military equipment. SAAB Gripen’s success is also based significantly on leasing.

Viability Of Leasing For India

Another important thing its viability for India.

Military equipment-naval warships or aircraft-are not for short period usages only. Especially when our prime enemy is like China that adopts ancient yet effective policies like “the hidden claws“. In simple words, to wait for the enemy to be weakest before striking. China is, after all, a psychological tiger only!

We have seen Chinese PLAAF deliberately force Japanese JASDF to scramble its F-15 J/DJ Eagles more than expected. This had resulted in their natural aging. The same can be soon valid for India as well.

Problems On The Path Of Leasing

Intense military lobbying by the US forced Israel to abandon its IAI Lavi project favouring the American F-16s. Despite Lavi being a better warplane as claimed. There is no guarantee that the same will not occur for India’s Indigenous projects.

This, added upon by the continuous security demand, will eventually lead India to abandon its Indigenous projects and purchase the leased or new equipment, making India always rely on foreign nations for such security requirements.

We cannot continue to lease them for more extended periods either. They will eventually become more costly. In both ways, leasing will be meaningless.

Conclusion

In the end, we need to be very careful with our leasing options. But most likely in the current situation when both LoC and LAC are very volatile. Our armed forces face only numerical shortcomings. It becomes indispensable to explore every option to enhance their capabilities.

Added to woes is the COVID-19 pandemic. It had wrecked the entire global economy. In such a condition, the lease of military hardware from “Friendly” nations is an option worth discussing.