Elephant in the room: Indonesia hesitates to strike India-Russia missile deal
Elephant in the room: Indonesia hesitates to strike India-Russia missile deal
WRITTEN BY ANDI RAIHANAH ASHAR
25 April 2023
Under the ‘Act East’ policy launched in 2014, India continues to present itself as a strategic partner in Southeast Asia. The increase in defence sales is one way for India to strengthen strategic ties with countries in the region. Earlier this year, Indian Prime Minister Narendra Modi emphasised that the country plans to triple its annual defence exports from USD 1.5 billion to 5 billion by 2024/25. According to the latest Stockholm International Peace Research Institute report, India’s annual arms sales are not even enough to make it into the top 25 exporters.
New Delhi aims to strengthen its domestic defence production and position in the Southeast Asian market through BrahMos Aerospace, a joint venture between India’s state-owned Defence Research and Development Organisation and Russia’s rocket design bureau NPO Mashinostroyenia (NPOM). The joint venture was established in 1998 when NPOM was running out of cash and needed foreign funds to keep operating. Although India’s local input has increased throughout the years, most engine parts and missile designs are provided by NPOM, which has been facing sanctions by Western countries since the beginning of the Russian war against Ukraine. As a result, worries about sanctions and the lack of interoperability of Western and Russian systems are major roadblocks to India’s defence industry improvement plans and the reason why states like Indonesia are still hesitant to finalise missile deals with India.
A new player in Southeast Asia
Beijing’s strategic footprint and assertiveness in the South China Sea have shaped military reactions in the region with Southeast Asian countries driving up their defence budgets to meet military equipment requirements. Particularly those Southeast Asian countries that need to deter Chinese naval actions have been eyeing the BrahMos cruise missile as a solution. Branded as the world’s fastest supersonic cruise missile, the missile is highly versatile: it is extremely difficult to evade and can be deployed from submarines, warships, jet fighters, and land platforms. This makes the missile a particularly desirable option. It is important to consider that the missile is also not subject to the United States International Traffic in Arms Regulations (ITAR). Additionally, BrahMos is developing a hypersonic version that could reach speeds of up to Mach 8 and is expected to run its first test in five to six years. However, Atul D. Rane, CEO of BrahMos Aerospace, confirmed that the hypersonic version will only be produced for India and Russia, and not be offered for export.
Southeast Asian countries like Indonesia are unlikely to pursue a missile deal involving an India-Russian joint venture as long as they have to put their relationship with the US at risk.
BrahMos Aerospace’s first deal in Southeast Asia was with the Philippines in January 2022 when it secured a USD 375 million sale of its shore-based anti-ship missiles. The first delivery to the Philippine Marine Corps is expected by the end of 2023. According to Atul D. Rane, another order worth USD 300 million is under negotiation. The shore-based anti-ship missile has a sea-denial capability to target hostile ships within a 300-kilometre range. With increasing tensions between China and the Philippines, it is possible that Manila would deploy the missiles to areas facing the South China Sea such as Luzon and the Palawan Islands.
Besides the Philippines, Rane confirmed that other Southeast Asian countries are also conducting talks with BrahMos, including those with overlapping territorial claims with Beijing in the South China Sea such as Vietnam. Although Indonesia does not face the same kind of territorial disputes as Malaysia and Vietnam, Beijing’s nine-dash line claims overlap with Jakarta’s exclusive economic zone. Therefore, Indonesia has been eyeing the BrahMos missile since 2018 as part of the plan to modernise its National Armed Forces (TNI). Securing a deal with Indonesia would be a milestone for India as a strategic partner in the region and a key player in the supersonic missile game. Moreover, the deal would be another step toward realising Modi’s ambitious vision of boosting India’s domestic defence industry.
Indonesia’s military modernisation: Between a rock and a hard place
According to Janes’ data cited by Reuters, Indonesia’s investment in new weapons acquisition increased by 28 per cent and 69 per cent in 2021 and 2022 respectively. However, the government has been struggling to reach its Minimum Essential Force (MEF) target: only 70 per cent will be reached by 2024 according to former TNI Commander General Andika Perkasa. The MEF is a long-term master plan that aims to build Indonesia’s maritime and naval defence posture to protect the country’s vast waters, deter potential aggressors, and develop power projection capabilities. The frequent visits abroad of Indonesia’s Minister of Defence Prabowo Subianto, including to France, Qatar, Germany, and Turkey, illustrate his defence diplomacy policy and the government’s commitment to secure long-term and strategic partnerships in procurement programmes.
Subianto has also participated in bilateral initiatives with India and visited the country several times. Back in 2020, the minister met his Indian counterpart, Rajnath Singh, and discussed the potential procurement of the BrahMos missile and counter-trade options. This potential missile deal resurfaced on 15 March 2023, after BrahMos CEO Rane announced that the company had sent a team to Jakarta to discuss the sale of shore- and ship-based missiles worth between USD 200 and 350 million. India-based media sources also reported that the two parties were in the “final stages of talks” about the missile procurement. However, it is striking that the Indonesian side appears not to share the same optimism to seal the deal. For example, the spokesperson for the Indonesian Ministry of Defence, Dahnil Anzar Simanjuntak, refused to comment on the potential deal. In fact, even though the ministry and BrahMos have been in protracted negotiation for years, details on the contract and its timeline have not been disclosed.
Indonesia’s hesitancy is driven by two factors: a lack of technical details on how to integrate the BrahMos with Western-made weapons systems and possible US sanctions. First, BrahMos Aerospace would need to provide details on the technical aspects to integrate the Indonesian coastal defence system with Western-made radars. In terms of ships, Indonesian warships’ Combat Management Systems are mostly provided either by Western original equipment manufacturers (OEMs) or through technology transfer by OEMs to PT Len Industri, an Indonesian state-owned communications equipment manufacturer. Indonesian President Joko Widodo has emphasised that procurement of defence equipment must include the transfer of technology to develop the national defence industry.
Second, although India holds a majority of BrahMos Aerospace shares (50.5 per cent) compared to Russia, the potential deal between India and Indonesia could likely be affected by Washington’s Countering America’s Adversaries Through Sanctions Act (CAATSA) — a bill proposing sanctions against Russia, Iran, North Korea, and states that procure weapons from these countries. This was already the case in several procurement programmes that the Indonesian government has since abandoned. Since 2003, Indonesia has operated Russian-made aircraft, Sukhoi Su-27 SK/SKM and Su-30MKK/MK2 for the Air Force as well as Mil Mi-17V5 and Mil Mi35P for the army. The Indonesian Navy also operates the P-800 Oniks (3M55) supersonic cruise missile on board the KRI Oswald Siahaan.
Bleak outlook for arms deals with traces of Russia
After the US Senate passed the CAATSA in June 2017, Indonesia’s plan to acquire 11 Sukhoi Su-35 worth USD 1.1 billion to replace the 40-year-old F-5 Tiger would likely be impacted if it continued to involve transactions with Russia. Back then, the idea was to use a countertrade strategy with cash as a downpayment and commodities to pay for the rest of the contract amount, similar to previous Sukhoi deals in 2003. However, US delegations informed the Indonesian Defence and Foreign Affairs Ministries about the consequences and offered to supply the Lockheed Martin F-16V instead. Since then, the Su-35 deal has been abandoned due to political considerations, and other contracts might face a similar fate, such as the 22 BMP-3F infantry fighting vehicles and 21 BT-3F armoured personnel carriers. The sanctions have added to the headache for the Indonesian Air Force to keep its Su-27/30 flying as some of the jet fighters are expected to retire in the 2030s. The Ministry of Defence was even trying to get its hands on Su-27/30 spare parts through Belarus until the State Authority for Military Industry of the Republic of Belarus faced financial sanctions by the US in early 2022.
The ongoing Russian military aggression against Ukraine has made it pretty unlikely for Indonesia to pursue any transaction in defence equipment unless Jakarta follows Manila’s policy to avoid negative consequences. In the case of missile procurement, the Philippines is immune from US sanctions for several reasons: the Philippines is one of the oldest US allies in the region and has been heavily relying on American-made weaponry. From Manila’s point of view, US laws sanctioning states that deal with Russia would not apply to the Philippines; the Philippines presidential spokesperson Harry Roque emphasised that the country is “free to enter into contracts as we please”. Another reason is Manila’s clear anti-China stance in the ongoing dispute in the South China Sea with Beijing. Any plan to muscle up the Philippines’ defence in coastal areas that face disputed waters is likely viewed positively by Washington. India's plans to establish itself in Southeast Asia as a defence partner are ambitious, but legacy issues concerning Russia are already affecting New Delhi’s attractiveness in the region. Southeast Asian countries like Indonesia are unlikely to pursue a missile deal involving an India-Russian joint venture as long as they have to put their relationship with the US at risk.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Andi Raihanah Ashar is the Lead Analyst for Maritime Security and Counterterrorism (CT) at the advisory firm PT Semar Sentinel Indonesia. Image credit: Wikimedia/Mile1979 Russia.