Aero Show in Bangalore 09-13 Feb 2011

Who Pays for this Free-for-All Display?

The aircraft giants from the world over land their latest planes to woo Indian buyer at the aero shows in India held in the Bangalore Yelahanka Airport every two years. Over 60% of the 18 or so participants are from mighty US hungry for export markets. Germany and Russia and three others comprising of Sweden, UAE and Israel follow Uncle Sam for the balance 40 percent. The next show due two months from now promises to be nearly 50 percent larger than the last one in 2009.

The top brass in the purchasing fraternity from military and civilian establishments will be wined and dined lavishly to lubricate the flow or orders in the shopping mall for aircrafts to come up at the Yelahanka Airport in February. Billions of dollars of business placed by India will keep the foreign MNCs in clover while protecting employment at home. “After all, defence of India is at stake. There can be no compromise on this”, say the national leaders in India while buying aircrafts in the shopping season.

The critics say that the aero shows are robbing the poor in India. Their hard earned money is used for acquiring expensive flying toys. It is said that the machines are of little use for fighting Taliban or the IED of the Naxals in Chattisgarh. They may be of some benefit in a possible war with China but India can fight that one only in alliance with super powers like US. We are heavily out gunned by Chinese missiles.

The non seriousness of the shopping spree is specially visible in the rough and ready manner of conducting the show from year to year. Big money is extracted from the foreign exhibitors by trade associations like CII or FICCI who secure the exhibition contract in the “import promotion” exhibition from Department of Defence Production. They charge a stiff fee of Rs. 1700/sq.ft. for space rental from the MNC exhibitors. Even the rights to clear cargo are sold at astronomical fees running into crores to private parties who, instead of getting paid by the trade association, are expected to recover their fees from the foreign participants for clearance services through customs. The trade association shares the money charged from the aircraft MNCs with the Defence Exhibition Organisation which takes at least half share in the Rs. 35 crores collected from the foreign MNCs. The exhibiting MNCs do not mind the big ticket since at the end the stiff fees will be recovered from high price sales to the military and private establishments.

At another level, the nexus between the MNCs, defence exhibition organization and the trade associations goes deeper to the point where even the elementary security procedures on customs rules are side stepped. The procedures on declaration of imported aircrafts value and quantity and detailed description in the filing of the Bill of Entry, examination of the aircraft and its stores from revenue and security point of view are not followed in the rush to cut costs and realize the stiff fees paid to the trade association. On the return leg when the aircraft is exported back after display at the aero show during its stay in India for a period of 12 days or so, the shipping bill for export is not filed. The reason for this omission is that there was no bill of entry in the first instance at the import leg. In the event, the cargo is not examined by the customs at both the import and export stage. It follows that stores like fuel which are consumed in India during the display also does not pay any duty of customs or excise.

Apart from the questions of compromise with security and non observance of clear cut customs rule of import and re-export in exhibitions, there is also the question of deviation from principles of sovereignty which are enshrined in the Constitution of India.

The Americans routinely pat the lady the Indian Ambassador, visas to Indian military officials denied, all on grounds of “national rules” which are above the norms of diplomacy, what to speak of moral decency. Yet India, led by the love of lucre allows US and even Israel and UAE to land their aircrafts at Indian military airports for the purpose of sale and exhibition without even a routine bill of entry, customs examination and bond for re-export! The CIA can smuggle phone tapping equipment in a C170 which is passed on to an intelligence operative during the display stage. There is no check on what comes in and what goes out in a routine customs examination.

These questions require serious examination and investigation as to how India has compromised sovereignty and security in the seven aero shows held till 2009 at Yelahanka Airport in Bangalore. There is a cloud in the air at the next show to be held in February 2011.

It is time that India reformats the Aero Show event and puts out a no nonsense professional profile to the foreign MNCs who wish to display their aircrafts. We should not behave like a banana republic reaching out for quick profits. If we must buy aircrafts, they should be in a serious business atmosphere. Simply stated, India should not charge the MNCs any fee for space since defence airports are public service and a not-for-profit set up. Instead, reasonable service fee for out of pocket expenses may be levied. The foreign MNCs should meet the commercial visitors only in public places and no lavish wining and dining to the military and civilian top brass should be permitted.

Customs formalities under the rules such as filing of import bill of entry, bond for re-export, security inspection of aircrafts both the import and export must be undertaken. The rules should be amended to waive security for customs duty to reduce transaction cost, the bond itself is enough is enough security and there should be no security money deposit. Last, there should be no entry fees for the public who wish to see the show, all are welcome on “first come first serve” basis.