The G2G (Government-to-Government) agreement is a type of defence procurement in which two sovereign governments negotiate directly for the sale and transfer of military equipment, avoiding regular competitive bidding processes. This methodology has been chosen in a number of defence deals due to its potential advantages over traditional procurement processes.
In contrast to free competition, a government-to-government (G2G) agreement includes both governments rather than a single corporation selling weapons directly to India. The majority of India’s defence dealings with Russia, its primary armament supplier, have been conducted under G2G agreements, also known as Inter-Governmental Agreements (IGAs). This type was also used in the contract with France for the Rafale combat plane.
In a G2G transaction, the governments of the buyer and supplier interact directly, as opposed to procurement via commercial enterprises. This typically leads to more efficient conversations and agreements.
These agreements can avoid the complicated and long procedures stated in regular Defence Procurement Procedures (DPP), allowing for more flexible price, delivery schedules, and maintenance support.
G2G contracts often contain sovereign guarantees from both sides, which adds a layer of commitment and assurance to the deal’s implementation. For example, prior G2G agreements, such as the Rafale sale, required that any complaints be addressed through established bilateral channels.
G2G transactions are frequently selected for urgent procurement needs since they may drastically eliminate delays caused by traditional bidding methods. This is critical for countries like India, who have pressing military needs.
Such agreements can provide more protection against external variables such as sanctions or supply chain problems, resulting in a more consistent flow of military weapons.
India’s anticipated procurement of F-35 fighter fighters will most likely follow a G2G format similar to the Rafale jets. Here are the main reasons why this technique is preferred:
G2G transactions avoid the normal Defence Procurement Procedure (DPP), providing additional flexibility. The Defence Acquisition Council of the Ministry of Defence defines the deal’s general boundaries. A Ministry of Defence committee negotiates the agreement with a foreign government agency, working with the manufacturing business as needed. The two government agencies’ final agreement requires approval from a cabinet committee chaired by the Prime Minister.
G2G agreements can guarantee that delivery and price are consistent with those supplied to the US military forces. They also allow for faster distribution by bypassing the potential delays connected with DPP. Furthermore, G2G agreements provide insurance against uncertainties such as sanctions or supply outages, as well as increased contracting nation participation in India’s defence needs.
The decision to utilise a G2G agreement for Rafale combat planes was made to meet an emergency demand. The government argued the Supreme Court that the Rafale deal, as a G2G arrangement, provided better price, delivery, and maintenance than the previous contract under negotiation, which failed owing to cost issues between the French business and Hindustan Aeronautics Ltd.
G2G military transactions give some reassurance due to sovereign guarantee. For example, disagreements over the 2016 Rafale deal’s implementation were to be resolved by a Bilateral High Level Group formed by India and France. Unresolved matters would be resolved through arbitration in accordance with the United Nations Commission on International Trade Law’s rules.
In a G2G transaction, the purchasing government obtains the same privileges and protection as the producer gives to its own government. The inter-governmental agreement establishes the French government’s and Dassault Aviation’s joint responsibility for the Rafale transaction, assuring a high degree of commitment.
By skipping the lengthy competitive procurement procedure, India might speed up the acquisition of modern fighter planes required to retain air dominance in the face of regional security threats.
G2G agreements strengthen relations between the two nations’ defence establishments, allowing for greater communication and coordination on critical military issues.
Direct government discussions can help alleviate worries about corruption and malpractice in open competitive procurements.
G2G transactions are widely viewed as an efficient way for nations such as India to get modern military technologies quickly and safely, particularly in light of pressing defence requirements against growing regional threats.
