In a turn of events that has sent shockwaves through the Indian defense sector, BrahMos Aerospace, the crown jewel of India’s missile program, finds itself embroiled in a security debacle.
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The allegations of a deliberate breach, allegedly orchestrated by a former high-ranking official, have cast a shadow over the company’s global reputation and raised questions about the safeguarding of sensitive defense secrets.
BrahMos Aerospace, a joint venture between India’s Defense Research and Development Organisation (DRDO) and Russia’s military-industrial consortium NPO Mashinostroyeniya (NPOM), is engulfed in controversy. A bombshell report by Firstpost has alleged a deliberate breach of security, casting a dark shadow over the company’s global reputation and export ambitions.
According to the initial report filed on May 2, 2024, it is alleged that Dr. Sudhir Mishra, a former Director General of the Defence Research and Development Organisation (DRDO) and former CEO and MD of BrahMos, removed confidential company documents from the premises of BrahMos Aerospace and returned them approximately a month after his retirement.
The plot thickens as the subsequent report filed on May 22 alleged that “the breach was not accidental but a deliberate act,” fueling distrust and skepticism within the highest echelons of the defense establishment.
With BrahMos operating at the cutting edge of supersonic cruise missile technology, the incident could impact its global reputation and possibly even the sales that India is banking on. This also raises concerns about the potential impact on BrahMos Aerospace’s global image.
Now, the first question here is, Can any publication’s report damage a company’s global reputation and potentially harm its business?
Consider this illustrative case:
In 2023, the Adani Group – a prominent Indian private entity, faced significant scrutiny following damning accusations by the American short-selling firm ‘Hindenburg Research.’
This US-based entity released a research report alleging Adani Enterprises and other affiliated entities of engaging in stock manipulation and accounting fraud spanning numerous years.
Immediately following the report’s publication, the Adani Group witnessed a considerable decline in its share price. It took several months for the group to recuperate from this setback. Notably, one consequence was the cancellation of Adani Enterprises’ ₹20,000 crore ($2.4B) Follow-On Public Offer, which had the potential to be the largest in the country’s history.
This serves as an example of how adverse news can profoundly impact an industry group.
Returning to the BrahMos security breach report…
“The secret files of as many as four countries are involved in this pressing issue. Every single one of these countries is known to have displayed interest in the BrahMos missile system at some point,” the first post report says.
Considering that ‘BrahMos Aerospace Private Limited’ (BAPL) operates as a joint venture between India’s Defence Research and Development Organisation (DRDO) and Russia’s military-industrial consortium, NPO Mashinostroyeniya (NPOM), it’s noteworthy to highlight its organizational structure. Despite its designation as a “Private Company,” BAPL functions as a state-owned corporation.
According to the company’s official website, it was founded with an authorized capital of $250 million, with 50.5% ownership from the Indian side and 49.5% from the Russian side. BAPL’s core responsibilities encompass the design, development, production, and marketing of the BrahMos supersonic Cruise missile, facilitated by the active involvement of a consortium comprising Indian and Russian industries.
“Yes, definitely, the global image of BrahMos Aerospace would be impacted when other countries see the reports or hear the news. Especially since the latest article mentions four countries interested in buying the system, these countries would likely have some doubts about the system and technology,” Siddhant Hira, a Non-Resident Fellow at the Irregular Warfare Initiative, voiced grave concerns.
“It will not only affect the company’s image but also the national image. The company’s image is at stake because it produces the BrahMos Missile System, and the national image is affected because BrahMos is a strategic system for India and other countries. Both are closely linked, impacting the self-reliance aspect as well”, he added.
This incident has drawn unsettling parallels with Pradeep Kurulkar’s arrest last year. On May 3, 2023, Kurulkar, former director of a Pune-based laboratory affiliated with the Defence Research and Development Organisation (DRDO), was arrested under the Official Secrets Act for allegedly leaking confidential information to a Pakistani intelligence operative.
These events have cast a pall over India’s defense industry, raising questions about the safeguarding of sensitive information and the potential consequences for future export endeavors.
“As of now, I believe the impact will be limited to the short term during this ongoing investigation. However, if such incidents become recurrent, it could have a lasting negative effect. If trust in Indian defense systems and technology diminishes, it could deter other countries from purchasing from India, which would be detrimental in the long run,” Siddhant noted.
Soaring Exports, Shattered Trust
The timing of this security breach could not be more inopportune, as India’s defense exports have soared to record heights. In the Financial Year (FY) 2023-24, defense exports surged to a record approximately $2.63 billion (Rs 21,083 crore), marking a remarkable growth of 32.5% compared to the previous fiscal year, which stood at Rs 15,920 crore.
Recent statistics indicate a staggering 31-fold increase in defense exports over the past decade, as observed from FY 2013-14. The government has set an ambitious target of $5 billion for defense exports in FY 2024-25. Defence Minister Rajnath Singh envisions annual defense exports reaching $6.25 Billion (Rs 50,000 crore) by 2028-29.
India’s defense production has made significant strides under the ‘Make in India’ initiative, aiming for self-reliance in defense. However, incidents such as the security breach at BrahMos Aerospace, the DRDO espionage case, and others cannot be overlooked. As the investigation unfolds, industry watchers and defense analysts alike are keenly observing the unfolding events.
The stakes are sky-high, with BrahMos’ reputation and India’s standing as a reliable supplier of advanced defense systems hanging precariously in the balance. Only time will tell whether this security breach potentially derails India’s ambitious ‘Make in India’ initiative and self-reliance dreams.
- Shubhangi Palve is a Defence and aerospace Journalist. Before joining the EurAsian Times, she worked for ET Prime. In this capacity, she focused on covering Defence strategies and the Defence Sector from a financial perspective. She offers more than 15 years of extensive experience in the media industry, spanning print, electronic, and online domains.
- Contact the author at shubhapalve (at) gmail (dot) com.
