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C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 008100 
 
SIPDIS 
 
SIPDIS 
 
DOS PLEASE PASS TO USTR 
 
E.O. 12958: DECL: 11/29/2026 
TAGS: PREL PGOV MARR MASS MCAP MOPS PARM IN
SUBJECT: INDIAN INTELLIGENTSIA IN A SEASON OF CRITICIZING 
THE DRDO 
 
Classified By: PolCouns Ted Osius for Reasons 1.4 (B,D) 
 
¶1.  (U) SUMMARY:  The Indian intelligentsia has been harshly 
critical of late of the efficacy of the Defense Research and 
Development Organization (DRDO), the organization responsible 
for designing and developing India's weapons systems. 
Government officials have chimed in, blaming the agency for 
cost and time overruns.  The DRDO defended itself by pointing 
its finger at the military for changing requirements 
mid-stream, and analysts point out that money crises and 
sanctions have played a role, but the agency has nevertheless 
had to make changes in its procurement and funding policies 
to weather the hailstorm of criticism.  A "successful" 
missile defense test recently has been viewed by the media 
both as a "milestone" and a desperate attempt for good press. 
 While the DRDO may be overcoming its "foreigner phobia" in 
terms of outsourcing and collaboration, its future is still 
in doubt and somewhat dependent on the political climate. 
 
------------------ 
The Critical Media 
------------------ 
 
¶2.  (U) The Indian media has lately been filling pages of 
newsprint disparaging India's Defense Research and 
Development Organization (DRDO) for cost overruns, delays and 
non-delivery of weapons systems.  "The Indian Express" (IE) 
ran a seven part series entitled "Delayed Research, Derailed 
Organization," while the November "Force" magazine cover 
read, "DRDO:  More Misses Than Hits."  The DRDO, whose 
mission is to "design, develop and lead to production 
state-of-the-art weapons systems" for Indian defense 
services, has around 50 laboratories and some 33,000 
employees.  The IE claims the DRDO has overshot estimates by 
U.S.$1.34 billion in the last ten years.  Failed  projects 
are said to include the guided missile program, the Arjun 
tank, the Light Combat Aircraft (LCA Tejas), the Integrated 
Electronic Warfare Program (Samyukta) and the Kaveri jet 
engine.  This cost overrun is reportedly larger than DRDO's 
budget of U.S.$1.19 billion for the current year.  According 
to the IE, the DRDO's average time overrun is 10.11 years. 
"Force" magazine argues that things have gone downhill for 
the DRDO since 1980, when it began to take on high profile 
development projects "with the aim of garnering funds, and 
for closeness to the political leadership."  At the time, the 
DRDO and the defense services worked separately, says the 
magazine.  However, when the Soviet Union (India's top 
weapons supplier) collapsed, the Indian military became 
dependent on the DRDO.  "As the DRDO failed to show results, 
the defense services were forced to import equipment from 
outside to fill operational gaps," explains the magazine. 
 
----------------- 
And Other Critics 
----------------- 
 
NEW DELHI 00008100  002 OF 004 
 
 
 
¶3.  (U) Indian Comptroller and Auditor-General V.N. Kaul, 
speaking at an international seminar on defense finance, 
criticized the DRDO while speaking about problems in defense 
procurement.  "Defense R&D, with an outlay of about U.S. $1 
billion, is an area where accountability often takes shelter 
under the policy of self-reliance and indigenization becomes 
a reason for delay," Kaul is quoted as saying.  Outlining the 
flaws of the defense industry as a whole, he claimed that 
long delays in the procurement system mean technology is 
often outdated at delivery, allotted funds go unutilized due 
to poor projectand contract management, and quality 
assurance systems are not modern. 
 
------------ 
The Rebuttal 
------------ 
 
¶4.  (U) The DRDO defends its performance by blaming the three 
military services, "who change their requirements while 
development is in progress and spend too much time on 
trials," the IE states.  After weeks of sharp criticism in 
and outside the press, the GOI announced deadlines for five 
of its high profile projects.  The Integrated Guided Missile 
Development Program is to be completed by the end of 2007, 
the final operational clearance for the LCA Tejas by 2010, 
the Samyukta by November 30, 2007, and both the Command 
Information Decisions Support Systems for Army Commanders 
(Samvahak) and the Naval Indigenous Electronic Warfare 
Program (Sangraha) by the end of this year.  In a response to 
a question in the Parliament of India, Defense Minister A.K. 
Antony wrote November 23, "The fact is that due to genuine 
technical difficulties, some of the projects were delayed, 
but these are nearing completion and, when developed, they 
will be equipped with current technologies with a useful life 
of about 20-25 years."  He also promised that stringent 
review and monitoring mechanisms have been put in place, says 
the IE. 
 
¶5.  (C) K. Santhanam, former DRDO Secretary and Science 
Advisor to the Defense Minister, told PolOffs that criticism 
of the DRDO had been misplaced, noting that the DRDO is 
merely a research organization, and production delays are not 
the fault of the organization.  When asked if the DRDO would 
be around for the long term, Santhanam said the organization 
would remain in place, joking that, "Indians do not kill 
animals, nor government agencies."  "Hindustan Times" foreign 
editor Pramit Pal Chaudhuri echoed that sentiment in a 
November 16 meeting, offering, "The army doesn't like the 
DRDO.  It is easy to find old military chiefs to disparage 
the DRDO." 
 
-------------------------------------- 
The DRDO Proposes a Shareholder Scheme 
-------------------------------------- 
 
NEW DELHI 00008100  003 OF 004 
 
 
 
¶6.  (U) In response to criticism that it had failed to 
deliver to the army, the navy and the air force, but had 
drained its resources despite that, DRDO Chief and Science 
Advisor M. Natarajan proposed a shareholder scheme in which a 
new pattern of funding will tie both the armed services and 
the private sector into its projects.  On November 14, 
Natarajan told a gathering of experts on investments in 
defense research that the organization had assessed its 
strengths and weaknesses, and candidly stated, "we assumed a 
scientific base, but it was inadequate," reports "The 
Telegraph."   Natarajan reportedly said, "The DRDO is not a 
manufacturer.  Its primary job is to create capacity," and 
blamed the media for "uninformed reporting" concerning cost 
and time overruns, states "The Hindu." 
 
-------------- 
The Lost Years 
-------------- 
 
¶7.  (C) While the DRDO can't deny overruns, its downward 
spiral can be tracked, explained "Hindu" Special 
Correspondent Sandeep Dikshit in a November 15 meeting.  With 
the collapse of the Soviet Union in 1991, paired with India's 
own foreign exchange crisis, India found "no love or money" 
to support the DRDO.  "Then, once the money came back, the 
sanctions came," said Dikshit, referring to the 1998-2001 
sanctions following India's nuclear test.  In the late 
1990's, the DRDO was plagued by human resource issues as 
India became an "IT Superpower," and brighter people fled the 
DRDO for higher paying jobs in the IT field.  After that 
exodus of talent, there was an erosion of enthusiasm, 
according to Dikshit.  "It became bureaucratic," he said, 
adding "Research is driven by passion, and there was none." 
As a result, the DRDO today is not innovative and capable 
only of serial production, with no clear policy directive 
behind it, opined Dikshit.  Another plague to the Indian 
defense research industry, Dikshit pondered, is that India's 
weapons acquisition plan has not been equal to its financial 
allotments.  "There has been no preparation of a long-term 
financial plan that is married to an acquisition plan," he 
said, noting that the defense procurement policy had been 
revised no less than four times in the last six years. 
 
------------------------------------ 
"A Resistance to Everything Foreign" 
------------------------------------ 
 
¶8.  (C) India has had a "mind-block when it comes to 
collaboration" with other countries, commented Dikshit. 
"There is a resistance to working with foreign universities - 
in fact, a resistance to everything foreign," Dikshit 
remarked.   Chaudhuri felt similarly, observing, "the DRDO 
and the Indian ministry says it can't trust the U.S. as a 
supplier."  Despite this, Dikshit feels the Indian outlook is 
 
NEW DELHI 00008100  004 OF 004 
 
 
changing, citing cooperation with the UN and joint technology 
operations with the U.S. as helping the Indians to see that 
outsourcing and foreign cooperation does not necessarily 
increase security risk. 
 
--------------------------------------------- ---------- 
Missile Test:  Moment of Success or Act of Desperation? 
--------------------------------------------- ---------- 
 
¶9.  (U) On November 27, in what was touted by one scientist 
as "a milestone," the DRDO "successfully" launched two of its 
surface-to-surface Prithvi-2 missiles from two different test 
ranges on the Orissa coast, intercepting one of them over the 
Bay of Bengal, according to "The Hindu."  "The Pioneer," 
however, reports that the launch "wasn't exactly a 
frightfully impressive display of indigenous technology or 
power," claiming that the organization has "desperately 
pulled a little known program out of the bag" to claim its 
Integrated Missile Development Program is doing well.  (Note: 
 DAO is reporting on the technical aspects of the test 
through military channels.  Post is also reporting on the 
test septel). 
 
--------------------------------------------- - 
Comment:  Has the DRDO Reached Its Shelf-life? 
--------------------------------------------- - 
 
¶10.  (C) Santhanam assured us that the DRDO will "keep 
limping along," and that's probably an accurate assessment. 
The defense ministry's latest procurement policy allows for 
private sector offsets, which will likely make DRDO a highly 
unattractive investment option.  In 23 months, the Parliament 
Committee on Defense plans to release its report on the DRDO. 
 In addition to the results of that report, the political 
climate at the time of its release will largely influence the 
future of the organization.  DRDO may survive, but its days 
of setting "milestones" for India's defense industry appear 
numbered. 
MULFORD