The clarion call for self reliance has always been the cynosure of successive governments but the seriousness of the issue to address long-standing strategic and national security concerns to offset India’s external dependence for its defence-preparedness and operational sustainability could not have been more explicitly brought to fore had it not been for the recent standoff with China as well the COVIND-19 crisis.
An exploratory and contextual introspection reveals a globally recognised fact that India has the dubious distinction of being the world’s largest arms importer, accounting for about 12 per cent of global arms imports. Bulk of this constitutes the core war fighting arsenal, which ipso facto requires external dependence for combat sustenance of the kind that we are currently experiencing on our northern borders. What therefore ails the defence industry despite the reformative impetus by the Government? The answer lies in multiple factors that contribute to the present predicament namely, delays in approvals, PSU driven procurement process, lack of critical technology, long gestation period and last but not the least the entire defence procurement process remains shrouded in a climate of perpetual secrecy.
Interestingly the recent announcement of several measures under ‘Atmanirbhar Bharat Abhiyan’ to promote self-reliance in defence production can be viewed as a bold and resolute decision by the government in this direction. The Ministry of Defence (MoD) has formulated a draft Defence Production and Export Promotion Policy 2020 (DPEPP 2020). For the first time there has been an effort to quantify the output in measurable terms that brings in a degree of accountability of all the stakeholders across the board. The stated objective is to achieve a turnover of Rs 1, 75,000 Crores (US$25 bn) including export of Rs 35,000 Crore (US$5 bn) in Aerospace and Defence goods and services by 2025. The Government aims to achieve this through a dynamic, robust and competitive Defence industry, focused on “Make in India” initiatives, through domestic innovation, design and development, so as to create an Indian IP ownership and an environment that encourages exports.
While the document is exhaustive, covering aspects of indigenisation and support to MSMEs/ Startups, optimisation of resource allocation, investment promotion, FDI and Ease of Doing Business, incentivised innovation support, R&D and Export Promotion, what is lacking is a blue print for the defence industry synergy for creating the necessary demand against which the private defence industry can work towards. In fact it is only the OFB, DPSUs and big private players who can sustain the long gestation period before expecting returns. In addition, the provisions of the DPP/ DPM are skewed in favour of the traditional L1 vendor thus leaving the others in a reverse monetary cycle sinking deeper into financial crisis.
Therefore given the fact that defence market is government driven based on domestic demand and exports, the share of domestic procurement in the overall Defence procurement, which is currently at approximately 60 per cent, is being planned to be significantly enhanced from the current Rs 70,000 crore to Rs 1,40,000 crore with a target of Rs 35,000 crore (US$5 bn) of Defence Exports by 2025. This is indeed a step in the right direction. The next arduous task is to develop strategies for its implementation that are made simple, user friendly and devoid of intricate procedural controls. At the macro level restructuring of budget allocation to domestic capital procurement as a distinct entity as well as simplification of the DPM for revenue procurement shall be in order, while exports promotion should be made a mandated function of the industry and should be incentivised.
It may also be prudent to mention that over the years the Defence industry has matured significantly and has empowered India with cutting-edge defence technologies. A large number of state-of-the-art weapon systems/ platforms/ equipment have been designed and developed to meet the requirements of the armed forces through a strong indigenous technology base. The development and production of strategic systems and platforms such as Agni and Prithvi series of missiles; Tejas-light combat aircraft; Pinaka-multi-barrel rocket launcher; Akash-air defence system; a wide range of radars and electronic warfare systems; Dhanush-artillery gun; Arjun-main battle tank etc have given a quantum jump to India’s military might, generating effective deterrence and providing crucial leverage.
However, despite this in-house potential, the dependence for critical war-fighting machinery from global sources continues. The acquisition of Rafael is a case in point against a compulsive need to bridge the capability deficit gap. While such acquisitions are inevitable it is for the government to concomitantly institutionalise its indigenisation to ensure operational sustainability besides facilitating cutting edge technology infusion into the defence industry. That apart, such acquisitions, over the years from diverse sources, have resulted in a range of platforms leading to a build-up of multiple inventories. Hence efforts should be made to adopt a family of weapons approach across the services where there is feasibility to standardise and optimise inventory and supply chain management. It is also a well known fact that India has made significant progress in developing unique state-of-the-art technologies including a wide range of complex systems. Chandrayaan has been a technology demonstrator, however, further progress is incumbent on bridging the gaps in certain critical technologies and materials aligned to the needs of the services including the Central Armed Police Forces (CAPFs).
In an era of information overload secrecy of defence procurement has little relevance and must be demystified. Efforts should be made to provide the industry greater visibility into the long term integrated perspective plan (LTIPP), which is a blue print for future capital acquisition priorities. This will enable the industry to develop technologies, carry out necessary ground work and position it in an optimal manner to absorb the demands at an appropriate time. Defence procurement must therefore be industry capability driven, arrived at after due diligence with the industry. Where there is a lack of technology the government must fund such projects as is the case in most western countries. Defence being a monophony, investments in this sector are incumbent on regular supply of orders. These require regular and fast track approvals by the government based on the LTIPP, encapsulated in a defined budgetary allocation for domestic acquisition.
Further, India’s emergence as a Defence manufacturing hub should promote exports to third world countries where the demand exists. In addition all stake holders must conduct regular outreach programmes to sensitise the industry, MSMEs and academia so as to keep them relevant. In all this, skilling remain paramount, forming the core component of the industry and will remain an important issue in developing highly skilled human recourse. Collectively it will enable increasing employment generation and contribute extensively in building a robust and self-reliant defence industry thereby conclusively foreclosing the unfinished agenda of self reliance in Defence.
-The writer is a former GOC-Indian Army and presently a Strategic Consultant & Principal Advisor. Views expressed are personal and do not necessarily reflect the views of Raksha Anirveda
–The writer is a former GOC of the Indian Army and presently serves as a Strategic Consultant and Principal Advisor. The views expressed are of the writer and do not necessarily reflect the views of Raksha Anirveda
