30 May 2020, NIICE Commentary 5111
Nishant Agarwal
India has had a vibrant history of defence manufacturing going back to several centuries, if not millennia. From Tipu’s rocket artillery to the present day Pinaka Multi Barrel Rocket Launchers (MBRLs), Indian indigenous defence production has pioneered defence technologies in the past. Yet today, when Indian PM Narendra Modi has called repeatedly for Indigenisation and Atma-nirbharta (self-dependency) in defence manufacturing; most of it remains just hollow rhetoric, as things do not materialize on ground and India remains one of the biggest importers of defence equipment globally.
Post-colonial India inherited most of the Defence Public Sector Undertakings (DPSU), which continue to be state owned as of yet. Their contribution to the Indian defence manufacturing remains immense, as it has provided India with the supplies needed to fight most of our conflicts in the region. But these DPSUs still have not been able to substitute and manufacture the equipment it was supposed to produce, to supplement Indian defence imports. These state-owned enterprises, often ended up producing equipment under licensing agreements from foreign defence contractors or even worse, just assembling complete or semi-knocked down units for them. Thus, these DPSUs have been nothing short of a debacle, ridden with inefficiency and producing sub-standard equipment. For a nation that aspires to become a great power, or even retain its colonial ambitions of being the regional net security provider in the region; the inability to indigenously produce the shells for its tanks is an embarrassment. When you couple it with the fact that these shells which we are importing are from the Cold War era and mostly obsolete, the situation becomes even more problematic. Avoidable incidents caused due to Ordnance Factories Board is (OFB) produced substandard equipment such as artillery shells do not seem declining or go away too. This, coupled with rampant trade unionism and multiple strikes throughout the year, makes them even more inefficient and unable to achieve the desired production rate for such equipment, resulting in shortages in war wastage reserves. Keeping aside the rhetoric, India still does not has the resources and war wastage reserves to fight a prolonged conflict with Pakistan, forget about fighting a two front war with Pakistan and China. The case of bulletproof jackets is another sad story, until recently India was unable to provide enough bulletproof jackets to its armed forces.
The post-colonial socialist tendencies have further affected Indigenisation and curtailed self-dependency in defence production, as until recently a majority of the orders went to these inefficient and highly bureaucratic DPSUs. But these preferences to state owned units should have been a thing of the past, at-least in the post 1991 Neo-liberal capitalist era. Modi’s 2014 victory, provided a ray of hope for the privately owned defence manufacturers in India; and since then, a number of business conglomerates have jumped into defence manufacturing. Some of these have actually put up great equipment on the table and have produced self-financed prototypes for the armed forces and the Ministry of Defense (MoD) to take them into consideration. TATA’s Kestrel or WhaP for example, provides the army with an opportunity to replace its obsolete soviet origin BMP-1 and BMP-2 from service, which can be cheaply produced indigenously when produced in larger quantities. But so far there has been no positive development in this realm. Bharat Forge and L&T defence are two other private players who have performed really well, and with great efficiency to provide the military equipment often ahead of their delivery schedules, but face closure of their production lines, due to the lack of earlier promised new orders by the MoD. This has been the case with L&T’s K9 Vajra SPH production line. Bharat Forge, similarly has provided the army with a plethora of options for its artillery requirements, but still awaits orders for the same, as the spectre of the Bofors scam still looms at large and effects the Indian defence procurement decisions.
Indigenous private defence enterprises thus, need to be roped in provided with the funds they need to make prototypes, for R&D, and most importantly enough orders to produce such equipment profitably and efficiently, in compliance with global standards. Workforce, which has been already trained should not sit idle, as thus enough opportunities need to be given to these private players. We should further invest in human resource, which we have no shortage of, as this will ensure employment and skill development of the workforce which we have amassed over the years. India needs to understand that FDI in defence and Partial ToTs will not benefit it in the long run, as they have not in the past. Platforms like the Arjun MBT, and Tejas LCA must be mass produced to make them cost effective and more private players must be roped in for the various sub-systems related to the platforms, followed by the eventual ToT for production to these private entities. Platforms in development, which we do not need must be cancelled or made to comply without strategic requirements. The Arjun MBT, as professor Bharat Karnad and various defence experts have reasoned should be made into a lighter 35-40 tonne light tank, able to operate on our borders with China, in the mountain strike corps.
Another issue that remains is the Armed forces’ demands for top tier defence equipment, which often is a direct import and has minimal or no actual ToT to the local industry. This equipment which we import, eats up a huge chunk of our capital defence budget over consecutive years, we lose precious foreign currency and we spend even less on the indigenous private manufacturers. Armed forces’ rejection of certain indigenous defence products and their excessively complicated General Staff Qualitative Requirements (GSQR) requirements work as a deterrent for the local players to get involved in the same, and the industry as a whole to grow and prosper. Our capabilities to produce such equipment thus remains truncated and we end up importing them. Federal governments and their MoD in India, should take a lead in pressuring them to adopt indigenous equipment and not allowing any imports, until there is any actual ToT or a dire need to procure them. Products such as the Pinaka MBRL system, Brahmos cruise missile and India’s extensive shipbuilding capabilities must be offered to friendly nations through India’s defence attachés posted abroad in a most aggressive manner.
“Atma-nirbharta” is definitely achievable and was achievable even a decade ago. What India needs is political will. Only political will backed by a shift in our strategic thinking is needed to achieve self-dependency. Our procurement procedures need immense reform and so do our DPSUs and their bureaucracy. This requires a strategic vision and the ability to act towards the materialization of the same. India should not remain at the mercy of foreign manufacturers to provide them with the access codes of equipment they own. We need to understand, that in order to achieve even the regional power status, we need to be “Atma-nirbhar” in defence manufacturing. Never will the US, or any Western power, provide us with the technology to produce advanced military equipment, effectively shooting themselves in the foot. Indian armed forces” too need to understand that the only parties benefiting from excessive foreign defence imports, are import lobbyist, further crippling our own defence-industrial complex. Indian government remains in the same “policy paralysis”, with respect to its defence manufacturing and exports policy as it accused the earlier government to be. Though the Indian defence exports have relatively risen as per the recent SIPRI report, the items we export constitute bulletproof jackets, ammunition and small arms. Heavier equipment still does not figure out in our list of defence exports. Equipment such as naval and coast ships, artillery and MRAPs (Mine-Resistant Ambush Protected) should be exported, along-with platforms like the Akash missile defence system and the Tejas LCA. Regions such as Africa and South America should be explored for the same, which traditionally look for cheaper value for money equipment.
