The recent speculations about the state of affairs in China are thought-provoking. Stagflation and sluggish economic growth, US sanctions on the sale of high-tech equipment to China, a floundering real estate sector, ‘friend-shoring’ of manufacturing, and the internal crackdown resulting in the disappearance of some prominent political and military leaders have created a growing feeling that China is faltering. Some are tempted to think that it will not recover from its present troubles. Many writings on China had foreseen a banking crisis and the real estate bubble bursting due to overstretched lending by China’s public sector banks.
The zero COVID policy hobbled its manufacturing and led to a frenzy of decoupling efforts by investors. The discomfort of the Xi Jinping regime with big business led to a crackdown. Increasing unemployment and urban unrest could lead to drastic curbs on freedom and stringent policing by the state. China has been spending heavily on surveillance of its citizens using innovative technologies. There are clear indications that the capitalist ways that had catapulted China to the height of economic power are slowly getting dismantled, with the communist party tightening its grip on the system under the banner of nationalism.
US-China Dynamics
The US sanctions do not seem to be working, and some feel that China is gaining from its near monopoly over high-tech intermediate products still needed by the countries benefitting from ‘friend-shoring.’ Major US chip manufacturers are worried about their business because their biggest market is China. It is also no surprise that China has a virtual stranglehold over producing rare earths, which are indispensable for most high-tech equipment ranging from smartphones to renewable energy. The recent moves by the US administration to open a dialogue with China point to the realisation that without enlisting China’s cooperation, the US might be in a difficult position in areas like global warming and renewable energy. China now has the largest naval fleet in the world, and its manoeuvres in the Indo-Pacific indicate that it may invade Taiwan sometime in 2027, as the US intelligence sources have predicted.
India’s Defence Perspective
From India’s defence perspective, the threat from China is as real as before. The defence supply channel with Russia is becoming unreliable because of Russia’s war with Ukraine and perilous because of US sanctions in force. This has inevitably pushed us into the waiting arms of the US for defence equipment and technology. The US defence industry emerges as the ultimate winner in all international conflicts. Here, we see the beginning of another spurt of capability development through imports like MQ9B Predator drones, which the US has offered to India.
The agreement to transfer jet engine technology for manufacturing GE414 engines by the HAL maybe considered a breakthrough, but the ultimate proof of its value to India will be the development of indigenous capability to design and manufacture India’s own brand of jet engines. HAL has had a long history of manufacturing hundreds of Su-30 engines under license from Russia, but there has been no success in designing and building its own jet engine. Therefore, the depth of technology transfer by the US can be known only when HAL truly acquires the capability to design and manufacture its own jet engine. So will be the outcomes of any of the Initiative on Critical and Emerging Technologies (iCET) between the two countries.
Mounting Defence Imports
According to the Stockholm International Peace Research Institute’s (SIPRI) 2023 report, India is the foremost importer of defence equipment, with a share of 11% of world imports. The increasing dependence on the USA should make us think about how long India can sustain its strategic independence, given the fact that India’s independent stand of neutrality in the Ukraine war has not gone down well with the Western world. The US proved to be an unreliable partner when its sanctions on Iran closed India’s access to cheaper oil and compelled it to buy oil from the USA also. It may be a partial consolation that we could buy cheap Russian oil despite US sanctions and export processed products to even European countries.
Fighting China’s Hegemony
India’s efforts to counter China’s hegemony, while noteworthy, have come at a steep military cost, and it is vital to maintain a candid perspective on these endeavours. To make strategic independence a core tenet of its foreign policy, India must formulate unambiguous, long-term strategies to fortify its national security apparatus.
While India’s ascent to the fifth-largest economy in the world has generated considerable optimism, with some projecting it could soon claim the third position, a sobering reality check is warranted. Even if India achieves the status of the world’s third-largest economy, it will remain roughly one-fourth of China’s economic magnitude.
This uphill climb is further complicated by India’s ambitious objective of becoming a developed nation by 2047. Realising this goal hinges on the acceleration and sustained maintenance of high growth rates. Escaping the ‘middle-income trap’ demands rapid and consistent growth, contingent on harnessing critical technologies, enhancing institutional capabilities, dismantling trade barriers, upskilling the workforce in cutting-edge technologies, and implementing far-reaching reforms. Moreover, India must make itself an attractive destination for major investors seeking to relocate their production facilities away from China.
Resource Independence and Renewable Energy
India must proactively secure vital resources such as rare earths and green hydrogen while aggressively adopting renewable energy sources to drastically reduce its oil dependence. It should also forge far-reaching partnerships with African and Latin American nations to access essential mineral resources.
Military Self-Reliance
The pursuit of military self-reliance is non-negotiable for achieving strategic independence. The crux of this self-reliance lies in developing indigenous technology capable of equipping the country’s armed forces with cutting-edge equipment. Regrettably, sustained excellence in defence research has thus far eluded India, thanks to a lack of visionary leadership, the inability to harness world-class talent, limited private sector and research institution involvement, and the monopolistic grip of the Defence Research and Development Organisation (DRDO).
This status quo is in dire need of overhaul. Defence research should be decentralised, with the armed forces taking a leading role. The DRDO must be granted autonomy and the freedom to attract world-class Indian talent while pursuing excellence. It must establish networks with leading researchers to foster a vast talent pool that can make research productive and mission-oriented.
Technological Self-Reliance
India must hasten its journey towards technological self-reliance. Recent developments offer a glimmer of hope. The enactment of the Anusandhan National Research Foundation Act 2023 by the Indian government is notable. This legislation outlines key objectives, such as providing high-level strategic direction for research, innovation, and entrepreneurship, formulating roadmaps for R&D, supporting the translation of research into capital-intensive technologies, and funding scientific research and infrastructure. Importantly, the governing board of the NRF will be presided over by the Prime Minister. It is perhaps for the first time that a strategic direction for research is being talked about Such strategic initiatives will call for a clear identification of our strengths, weaknesses, opportunities and threats (SWOT) and formulation of road maps for excellence and high research productivity. Nevertheless, the success of these strategic initiatives hinges on their professional execution, free from bureaucratic entanglements.
The Indian government has also established a high-level committee to review the functioning of the DRDO. This move is a necessary outcome of the government’s extensive defence reforms. The DRDO needs a stiff dose of reform to deliver cutting-edge technologies to the armed forces. Transformative rather than cosmetic reforms are needed to enable the DRDO to achieve its goals.
–The writer is a former Defence Secretary. The views expressed are of the writer and do not necessarily reflect the views of Raksha Anirveda
