Indian Defence

Is Leasing Military Equipment A Good Option For India?

Hello defence lovers! In this article, we are going to discuss the leasing policy of the Indian armed forces. We would also discuss the advantages and disadvantages of leasing military equipment. We would also discuss the critical equipment that the Indian armed forces are operating under the lease.

What is Leasing?

Leasing is the process in which a firm or an organization can take certain equipment on rent from another firm for a certain interval of time. According to the Defence Acquisition Policy (DAP) leasing “means to possess and operate (a military) asset without owning the asset” and adds that it provides a useful way “to substitute huge initial capital outlays with periodical rental payments”.

Last year critical changes were made to the Defence Acquisition policy September. It allowed the armed forces to lease military equipment instead of purchasing them.

Advantages of Leasing Military Equipment

Leasing military equipment is a win-win situation for both the armed forces and the government. In our country buying new military equipment is a very long process. The first Request for Proposal is initiated. Then Request for Information is issued to several vendors. Vendors reply to these RFIs. Then evaluation and trials are carried out. Then some vendors are shortlisted and the government then negotiates with these vendors. Finally, a vendor is chosen. Then this equipment has to get the approval of the Defence acquisition council (DAC) and the Cabinet Committee on Security (CCS). After all these processes the contract is signed and the equipment is purchased. This entire process takes years and sometimes even a decade to complete. This slow procurement of critical equipment affects the operational capabilities of the armed forces.

Leasing will make the process much faster. Apart from speeding things ups leasing equipment will also save a significant amount of funds. In a post-pandemic world where health care will be the government’s top priority, the defence budget is bound to shrink, but the security challenges are not. Hence leasing is a win-win situation where the government can save and divert some funds and the armed forces don’t have to compromise with its operational capabilities.

Military Equipment Leased By The Armed Forces

The concept of leasing is not new in the armed forces. The first nuclear Submarine operated by India, the Charlie class INS Chakra was taken on lease from the Soviet Union in 1988. Later an Akula II class submarine was leased from Russia which was also named INS Chakra. Indian Navy is negotiating with Russia for another Akula II submarine for lease.

Last year in December, two MQ 9B sea guardian drones were taken on lease for two years by the Indian Navy. Though as experts believe Indian Navy has leased only 2 drones for meeting the emergency requirements along with testing it for bulk purchase in future.

The Indian Navy also recently issued a request for information (RFI) to foreign companies for the lease of 24 twin-engine armed multirole light utility helicopters, with all maintenance support, for a lease period of five years. The navy is also planning to take 6 minesweepers on lease as it lacks the minesweeping capabilities as of now.

The Indian Airforce is planning to take 6 Aerial refuellers to complements the current fleet of IL 78s. The Airforce needs 18 Aerial refuellers and the current strength is just six. The IAF is also planning to acquire 20 basic trainers on lease as the production of HTT 40 trainers is getting delayed.

The Indian Army is also finalising the lease of four advanced Heron Mark-II medium-altitude long-endurance UAVs from Israel.

The Downside

Leasing might appear as an attractive option at the first glance. However critical offensive equipment is not given on lease by their manufacturers. Moreover, the option for a lease must be kept for meeting the emergency operational requirement. It must not be seen as an alternative to purchasing the equipment as in the long run leasing would be costlier than purchasing the equipment in the first place.

Sheershoo Deb

I am a defense aspirant Preparing to be an officer Earning the prestigious blue uniform is my dream. I am a Defense analyst and enthusiast

One Comment

  1. Further The Equipments bought by you can be moulded According to need
    You can add instruments to make it better
    In Leasing you r almost confined to the thing that you can only use instrument
    Leasing Dosent seems to be impressive options to many and neither is as some procurments are speedy too

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