Friday, 23 March 2018

Draft defence production policy aims to put India in top five defence producers

Key Points in Draft Defence Production Policy 2018

India to be one of the world’s top five defence producers

Self reliance in 13 areas by 2025, including fighters, tanks, warships, guns

India a global leader in cyberspace and AI (artificial intelligence)

Building a 80-100 seater civilian aircraft within seven years

Turnover of Rs 1,70,000 crore in defence by 2025, investing Rs 70,000 Crores to create employment for two to three million people

Export target of Rs 35,000 crore ($5 billion) by 2025

Permit 74 per cent FDI under automatic route for “niche technologies”

Rs 6,000 crore for developing two defence production corridors

Transition automotive component manufacturers to aerospace

Conducting “hackathons” to resolve problems, Rs 1,000 crore for 2018-2022

Set up Defence Innovation Hubs to encourage start-ups

Bring MSMEs into defence manufacture.


By Ajai Shukla
Business Standard, 23rd March 18

The defence ministry on Thursday released a draft “Defence Production Policy 2018” (DProP 2018), with the ambitious vision of catapulting India into the world’s top five defence producers.

With unusual boldness and clarity, DProP 2018 stipulates 13 areas where India must achieve self-reliance by 2025: Manufacturing fighter aircraft, medium lift and utility helicopters, warships, land combat vehicles, automonous weapon systems, missile systems, gun systems, small arms, ammunition and explosives, surveillance systems, electronic warfare (EW) systems, communication systems and night fighting enablers.

The policy intends to capitalise on India’s IT strengths to “Make India as a global leader in Cyberspace and AI (artificial intelligence) technologies (sic).”

And, somewhat incongruously, the new policy commits to building a 80-100 seater civilian aircraft within the next seven years.

The policy is silent, however, on the fate of ongoing global procurements of the platforms to be indigenised, including single-engine and carrier-borne fighters, infantry small arms, maritime surveillance systems and others.

Stakeholders have until March 31 to submit suggestions to modify DProP 2018. Thereafter, say ministry sources, the policy will be placed before the union Cabinet since implementing it would require a high degree of inter-ministerial coordination.

In January 2011, then defence minister AK Antony had unveiled the first production policy, DProP 2011. At the release function, referring to India’s import of 70 per cent of its defence needs, he stated: “This large-scale dependence on foreign sources is unacceptable for a country like India.”

Seven years later, India remains the world’s largest defence buyer, importing 60-65 per cent of its defence needs. DProP 2018 says India’s defence production has only gone up from Rs. 43,746 crores in 2013-14 to Rs. 55,894 crores in 2016-17.

In February 2015, Prime Minister Narendra Modi had stated in Bengaluru: “Even a 20 to 25 per cent reduction in imports could directly create an additional 100,000 to 120,000 highly skilled jobs in India.”

Union Defence Minister Nirmala Sitharaman is being far more ambitious. DProP 2018 aims to “achieve a turnover of Rs 1,70,000 crore (USD 26 Billion approx) in defence goods and services by 2025 involving additional investment of nearly Rs 70,000 Crores (USD 10 Bn approx) creating employment for nearly 2 to 3 Million people (sic).”

In 2016, one of Sitharaman’s predecessors, Manohar Parrikar, was considered unrealistic when he proposed raising India’s defence exports from the current level of about $330 million to $2 billion – a target still nowhere in sight. Now Sitharaman’s DProP 2018 is setting a target of Rs 35,000 crore (about $5 billion) by 2025.

DProP 2018 seeks to achieve this by exhibiting Indian capabilities in Defence Expo (in Chennai next month) and Aero India (on alternate years), promoting exports through government-to-government agreements and offering lines of credit to buyer countries, setting up export offices in buyer countries, setting up a Defence Export Organisation jointly with industry, and hastening end-to-end export clearances.

It remains unclear what products India will export to meet these targets. There are already indigenous platforms like the Arjun tank and Tejas fighter. But the reluctance of the army and air force to accept them into service causes foreign buyers to lose interest. Where there is foreign interest, as in the case of naval patrol vessels and utility helicopters, Indian industry is short of production capacity.

In order to boost foreign direct investment (FDI) into defence production, DProP 2018 proposes allowing 74 per cent FDI under the automatic route for “niche technology areas.”

Since June 2016, FDI up to 49 per cent has been permitted automatically, with up to 100 per cent “permitted through Government approval, wherever it is likely to result in access to modern technology or for other reasons to be recorded.”

Industry experts point out that the problem, even currently, lies not in low FDI caps, but in identifying the technologies that would be eligible for higher FDI. DProP 2018 does not shed light on this.

DProP 2018 elaborates on the two “defence industry corridors” –in Tamil Nadu and Uttar Pradesh -- that were announced in the Budget, and which Sitharaman has been pursuing vigorously in her home state, Tamil Nadu. The policy stipulates that, each corridor would have “one major cluster of defence production units around an anchor unit”.

A special purpose vehicle (SPV) in each corridor would develop an eco-system for defence production, with testing and certification facilities, export facilitation centres and technology transfer facilitation, for which the central government would contribute 50 per cent of the cost, subject to a ceiling of Rs 3,000 crore.

In addition, DProP 2018 throws up several apparently random ideas: encouraging automotive component manufacturers to upgrade skills to transition to aerospace design and manufacture; conducting “hackathons” to resolve specific problem areas, for which Rs 1,000 crore would be earmarked for 2018-2022; the setting up of Defence Innovation Hubs for encouraging start-ups; and a clear and well founded emphasis on bringing micro, small and medium enterprises into defence manufacture.

Thursday, 22 March 2018

Chinese unmanned tanks pose new threat on Sino-Indian border

By Ajai Shukla
Business Standard, 22nd Mar 18

In 1962, even strong Indian Army defences in sectors like Ladakh and Walong were eventually overrun by human waves of Chinese soldiers. The scenario for a future war is now even bleaker – with the People’s Liberation Army (PLA) throwing in waves of unmanned tanks to blast and crush Indian defences.

Footage recently aired by the state-owned China Central Television (CCTV) showed China’s first unmanned tank being driven by remote control. While the footage did not show the tank’s main gun or other weapons firing, Indian armour experts believe that capability would only be a matter of time.

In July 2014, the China Daily website quoted a senior military officer who divulged that the PLA had begun developing an unmanned armoured vehicle. A month earlier, state-owned defence contractor, China North Industries Group Corp, had established China's first research center dedicated to developing unmanned ground vehicles.

“Unmanned ground vehicles will play a very important role in future ground combat. Realising that, we have begun to explore how to refit our armoured vehicles into unmanned ones,” said Major General Xu Hang in 2014. The PLA general headed the Beijing-based People's Liberation Army Academy of Armoured Forces Engineering, which has spearheaded the development of the unmanned tank prototype. 

Highlighting China’s formidable military design and development capability, that project has apparently achieved its first goal – to drive a tank by remote control. While driverless technologies are being developed by civilian corportions like Google, an unmanned tank would present purely military challenges as well -- like networking it with surveillance devices, detecting enemy targets, aiming its powerful main gun, and firing it accurately.

“A Type-59 tank converted to remote control could have multiple training and battlefield purposes. In training it could be used as a moving target for tank and anti-tank gunners, adding more realism to target practice. In battle, it could be used in formations as a decoy to distract and confuse enemy reconnaissance and surveillance”, says Dennis Blasko, a former US military intelligence officer who is a leading expert on the PLA.

However, using it as a battlefield weapons would require the integration of remote target acquisition and fire control technologies – a more technologically challenging task – says Blasko.

Even if only in the future, the prospect of hordes of remotely operated tanks is worrying for Indian defence planners who, over the preceding decade, have beefed up defences along the Sino-Indian border by moving up two brigades of tanks, each with about 150 T-72 tanks.

A tank is a heavy, armoured vehicle that can move off roads since it has tracks rather than wheels. Its thick steel skin protects its crew – usually a driver, gunner, radio operator and commander – from enemy bullets. Its heavy gun, which can fire armour piercing ammunition to destroy enemy tanks or high explosive shells against infantry out in the open, has earned it the sobriquet “the bully of the battlefield”.

Ever since the tank first appeared – in 1916, in the Battle of the Somme, in World War I – weapons designers have sought to counter the threat it poses. Over the decades, the development of the armour-piercing projectile, shoulder-fired rocket propelled grenades, anti-tank guided missiles and the attack helicopter; were all initially hailed as the death-knell of the main battle tank.

Yet, all these panaceas were countered by improvements in the tank’s mobility, firepower, lethality and advances in armour protection. Now, some – including the Chinese – believe the answer to the tank is the unmanned tank.

The PLA could potentially field unmanned tanks in the thousands. The one that appeared on CCTV was a Type 59, of which some 5,000 were in service till the turn of the century, when the PLA began replacing them with the more modern Type 69 and Type 79.

The English-language Chinese daily, Global Times, quoted Liu Qingshan, the chief editor of Tank and Armoured Vehicle, as saying that the Type 59 tank fleet is still well maintained.

However, a future Chinese unmanned tank is unlikely to be based on the T-59 platform. A tank’s key drawback is the weight of its armour, which impedes its speed and mobility. Because the armour is mainly needed to protect the crew, removing humans from the equation permits a much more thinly armoured (and lighter) tank.

The future unmanned tank, therefore, is likely to be thinly protected, destructive in firepower and heavily networked through digital networks with airborne and ground-based surveillance devices that provides the tank fleet with an all-round view of the battlefield.

In India, the Defence R&D Organisation (DRDO) is still focusing on developing the next-generation manned tank. The PLA however is looking further ahead. 

Wednesday, 21 March 2018

Finance ministry shoots down MoD’s proposal for “non-lapsable defence modernisation fund”

BJP govt shoots down a BJP proposal, first budgeted in 2004 by Finance Minister Jaswant Singh

By Ajai Shukla
Business Standard, 21st Mar 18

The finance ministry has shot down the defence ministry’s proposal to implement a longstanding quest of the Bharatiya Janata Party (BJP) – to create a “non-lapsable defence modernisation fund (DMF)”, in which the military’s unspent capital budget is parked at the end of each financial year, from where it can be made available for the subsequent year’s procurements.

The military points out that bureaucratic delay in sanctioning capital (modernisation) expenditure has led to the surrender of billions of rupees in successive years, severely disrupting the military’s long-term modernisation plan. The BJP has traditionally been sympathetic to this perspective.

On February 3, 2004, National Democratic Alliance (NDA) finance minister (and former defence minister) Jaswant Singh, while presenting the interim budget, announced the setting up of a non-lapsable defence modernisation fund (DMF).

Three months later, the NDA was voted out of power. For the next ten years, the United Progressive Alliance (UPA) government rejected any need for a non-lapsable DMF. From 2014-2016, the current NDA government followed the UPA lead.

In December 2016, however, the defence ministry did an about turn, informing Parliament’s Standing Committee on Defence (hereafter ‘the Committee’): “On further consideration… it has been felt that the utility of creation of a non-lapsable, roll over fund for Capital cannot be completely negated as the same would help in eliminating the prevailing uncertainty in providing adequate funds for various defence capability development and infrastructure projects. The Ministry therefore has reviewed its stated position taken so far and proposes to take up the case for setting up of a capital non-lapsable, roll–on fund afresh with Ministry of Finance immediately.”

But when the defence ministry took up the proposal, the Finance Ministry shot it down. According to the Committee’s latest report, tabled in Parliament on March 13, the Defence Ministry reported: “The proposal for creation of ‘Non–lapsable Capital Fund Account’ in Public Account for Defence Modernisation, was sent to Ministry of Finance, but the same was not agreed to by the Ministry of Finance (sic).”

The Finance Ministry has offered several reasons for turning down the proposal for a non-lapsable DMF. Its first reason is, “Adequate budget provision is made available to Ministry of Defence to finance the capital requirements of Defence Services.” Presumeably this suggests that each year’s capital budget allocations are sufficient in themselves and do not need to be supplemented by the previous year’s unspent balance.

This argument, however, is negated by the army vice chief’s detailed complaint to the Committee that this year’s capital allocations are inadequate even to service instalments due on purchases made during earlier years. The latest Committee report has noted that all three services got significantly lower allocations than they had bid for. The army got just 60 per cent of what it had projected; the navy got 56 per cent; and the air force got barely 45 per cent of its requirements.

Next, the finance ministry argued that a non-lapsable DMF would not be available for capital expenditure automatically, but would require fresh Parliamentary sanction through Demands for Grants. “Hence, mere creation of non-lapsable funds yields no additional advantage to Ministry of Defence and could rather induce complacency in incurring expenditure”, stated the finance ministry.

Further, the finance ministry objected that “Creating a corpus” of non-lapsable DMFs, would make money “unavailable for other essential expenditure.” It pointed out that the Standing Committee on Finance had recommended that “unutilized funds/funds kept idle for more than two years may be transferred to Consolidated Fund of India so that these funds could be utilized for other prioritized schemes”.

Finally, the finance ministry argued that “Moving general revenue out of Consolidated Fund and parking in [a] corpus fund” would violate Article 266(1) of the Constitution and “could raise competing demand from other Ministers.”

Monday, 19 March 2018

Five civilians killed, two injured on LoC as Pakistan ups the ante

11-year-old Nasreen Kouser is flown to hospital by the army after being seriously injured by Pakistani firing on Sunday

By Ajai Shukla
Business Standard, 19th March 18

In an increasingly hostile atmosphere of tit-for-tat firing across the Line of Control (LoC) between India and Pakistan, five Indian civilians were killed and two injured – all members of the same family – on Sunday morning near Poonch, Jammu & Kashmir (J&K).

Such tragedies are not unprecedented in villages near the LoC. On February 7, the defence minister told Parliament that, in each of the last three years, Pakistani firing had killed 12-16 Indian villagers and wounded 71-83. That casualty number has been surpassed already this year.

Rising heat in J&K

Year-wise occurrence

Ceasefire violations (CFVs)
351 (Till 12th Feb)
Terrorist Initiated Incidents (TIIs)
7   (Till 29th Jan)
Infiltration Bids Eliminated (IBE)
3  (Till 29th Jan)
(Source: answers to Parliamentary questions)

Neither India nor Pakistan have yet repudiated the unsigned ceasefire that came into effect in November 2003. It has survived even cross-LoC raids that resulted in the killing and savage mutilation of the bodies of enemy soldiers. Not even India’s “surgical strikes” on Pakistani terrorist camps in September 2016 caused either side to officially call off the ceasefire.

But now, with both sides targeting each other’s posts – and occasionally, as today, even civilians – with heavy machine guns, automatic grenade launchers, guided missiles, heavy mortars and even medium artillery, there sense is growing that the ceasefire is dead, even if not buried.

The first indication came on January 12, when Indian Army chief, General Bipin Rawat, implied the ceasefire had ended: “If we see a drop in infiltration [by terrorists] along the LoC, we are willing to call for a ceasefire. But not until we see a drop in infiltration levels.”

Abandoning the longstanding convention of blaming the other side for instigating firing, Rawat bluntly stated: “Ceasefire violations are initiated by us in counter-terrorist operations. These are when we target Pakistani posts that are involved in infiltrating terrorists [across the LoC].

Rawat elaborated: “Earlier, we were targeting (firing at) only the infiltrating militants. But these extremists are disposable commodities for Pakistan. Instead, the pain has to be felt by the Pakistan armed forces for supporting infiltration. So we have started targeting his posts and I can assure you that, in these exchanges of fire, he has suffered 3-4 times the casualties. That is why we get repeated requests from Pakistan to take the ceasefire back to 2003 levels.”

On Tuesday, in New Delhi, Rawat returned to this theme. “Earlier, the burden was only on us to man the border and remain alert, and now the Pakistan Army is feeling the same pain. They also have to remain alert on the border”, he said.

Even so, Rawat accepted that Indian pressure had not yet induced the Pakistan Army to reduce infiltration, and might have to be stepped up. “If we want to raise the threshold [of firing], we can… We don’t want a ceasefire on their terms. We want it on our terms”, said Rawat.

However, as even serving generals have pointed out, there is a limit to how much India can escalate without triggering war. The western army commander, Lieutenant General Surinder Singh, stated in Chandigarh earlier this month: “You can only push them (Pakistan) conventionally to a limit and not beyond that. And no nuclear nation can be browbeaten beyond a particular stage.”

New Delhi’s sensitivity to escalation was illustrated in September 2016, when an Indian general, while announcing the “surgical strikes” on terrorist camps explicitly underscored its limited objectives, stating: “The operations aimed at neutralising terrorists have since ceased. We do not have any plans for further continuation.”

It is now clear that the “surgical strikes” have not deterred Pakistani aggression. Figures tabled by the government in Parliament reveal that Pakistan violated the ceasefire 228 times in 2016, up from 152 times in 2015. After the “surgical strikes”, that went up fourfold in 2017 to 860 violations. In the first 43 days of 2018, Pakistan opened fire 351 times, averaging more than eight incidents daily.

Pakistan might well be paying a heavier cost, as General Rawat has stated. Yet India’s escalation strategy is incurring a significant cost in soldiers’ lives. This was evident on December 23, when a major and three jawans were gunned down on the LoC near Rajauri, Jammu & Kashmir.

Army sources say that 21 Indian soldiers and 12 civilians were killed in border firing last year. Without an early ceasefire, the cost will almost certainly be higher this year.

The big losers from escalated firing are residents of villages near the LoC. Rawat alluded to this when he said in January: “[Army] bunkers are always bulletproof, and can even take the impact of artillery shells, [but] we have a problem of civilian bunkers. I’ve ordered that we will make bunkers, or trenches or pits for schoolchildren.”

From the LoC to the Kashmir Valley hinterland, the last two years have also seen a significant rise in militant activities, reflected in the casualties incurred by the security forces, civilians and also militants. Without de-escalation, 2018 is on track to be the bloodiest year of the decade.

Casualties in J&K from militancy*

Security Forces**
Terrorists killed

*   In terrorist initiated incidents (TII) and infiltration bids eliminated (IBE)
** Including military, Border Security Force and J&K Police

(Source: answers to Parliamentary questions)