Wednesday, 4 April 2018

Indigenisation blues: An unrealistic Defence Production Policy

The draft defence production policy is unrealistic and unachievably over-ambitious

By Ajai Shukla
Business Standard editorial
4th April 18

The defence ministry has released a new Defence Production Policy 2018 (DProP 2018), which envisions transforming an India that currently imports more than 60 per cent of its defence needs into one of the world’s top five defence producers. It targets 2025 for becoming self-reliant in 13 weapons platforms, including fighter aircraft, warships, tanks, missiles and artillery, which constitute the bulk of our imports. By 2025, investments of Rs 700 billion (~$10 billion) in defence manufacture are supposed to generate an annual turnover of Rs 1.7 trillion (~$26 billion) in defence goods and services. Of this, Rs 350 billion (~$5 billion) will be exported, effectively multiplying defence exports 15-fold. This is expected to make defence cost effective, provide “strategic independence” and create sovereign capability in selected technology areas that will trickle down to industry in general. The new policy will supersede an earlier policy of 2011 and is expected to be finalised shortly.

Realising these aims will demand difficult changes. First, the military will have to abandon its insistence on imported, state-of-the-art weaponry. In several categories listed for complete indigenisation, homegrown solutions are already available. The Tejas fighter aircraft, Arjun tank, Advanced Towed Artillery Gun and tactical missiles such as Nag, Astra and Akash can join operational service in large numbers and be incrementally improved into world-class systems. Hindustan Aeronautics’ successful light helicopters provide a springboard to more complex helicopters. In building strategic missiles like the Agni series, the Defence Research & Development Organisation has already proven that, when imports are ruled out, it can deliver world-class indigenous alternatives. However, the military (with the honourable exception of the navy) has traditionally insisted on inducting into service only cutting-edge, fully proven weaponry, rather than doing what militaries the world over do – which is to guide weapons development, accept platforms into service when they are just about operational, and then improve them through successive iterations, like the navy has done with its destroyers and frigates.

In order to meet the demand for defence equipment that this would generate, the defence ministry must midwife a defence industrial eco-system – from the micro, small and medium enterprises (MSMEs) that provide every global defence industry its high-technology edge; to the aerospace and defence manufacturing units that build the high-specification components and assemblies that go into weaponry; to the “platform integrators” that produce the completed weapons systems. In addition to unlocking domestic procurement, the government must facilitate defence exports, and award a large number of “Make” contracts, especially in the Make-2 category that provides skill-building opportunities for small defence firms.


Finally, the ministry will have to establish an overarching infrastructural, fiscal and legal environment, and essential testing and validating facilities that individual firms cannot cost-effectively create. Even assuming political will were to be mustered across the multiple ministries involved, establishing a defence production eco-system and revving it up to full steam would take significantly longer than the highly optimistic time frame that DProP 2018 has laid out. Instead of further eroding the already shaky edifice of defence indigenisation with an unrealistic policy, the defence ministry would do well to lay out a realistic roadmap with achievable milestones.

4 comments:

Anonymous said...

So it’s all settled then...The Lady will wave her magic wand, and everything will fall into place. This announcement I note, has resulted in several rounds of self congratulatory mutual back slapping amongst the Babus in the department.
Its now expected the Armed Forces should curb imports and rely on Indian manufactured alternatives.
Our ‘Braves’ with no ammunition to go over the top into enemy trenches, with bare hands scratch the Pakistan eyes out.
Bahut Zabardast larhai Hogi!
Sirif Bayonet say larhai hoyegi!
Our Tejas instead of coming off the production line to be loaded onto trucks and driven straight to a Museum to be placed alongside the Dakota, are now to be delivered to the IAF in their hundreds..???
But I agree with broadsword
Excellent and much needed is creating a “fiscal and legal environment, and essential testing and validating facilities” for firms supplying defence.
“establishing a defence production eco-system”
“provide skill-building opportunities for small defence firms”
“midwife a defence industrial eco-system – from the micro, small and medium enterprises”
But
“accept platforms into service when they are just about operational, and then improve them through successive iterations, like the navy has done with its destroyers and frigates.” ???
The Hindustan motors Ambassador car too, went through successive iterations.
Surely we must have confidence in India’s private enterprise ingenuity to go it alone, to compete with the rest of the world, similar handouts/favouritism elsewhere to small and big firms (however well intentioned) have failed or created inefficiency. In Malaysia, South Korea, Singapore, leave let alone has resulted in rapid industrialisation.

Alok Asthana said...

The need for Indian army and Air Force to accept reasonably good weapon system and then guide their development incrementally, rather than insist on cutting edge technology only, has been brought out well. The reason is simply immaturity and selfish attitude of generals and air marshals. But how the navy has managed to keep out of this national malady is something that surprises me. Needs to be explored.

Anonymous said...

All this GoI and MoD can do is to announce on a grand scale and set over ambitious targets!! they will beat the whole world hands down on this front!!
It is like polishing a building exteriors to a prospective seller and when you enter inside you see nothing around....
enough time has been spent and lost sitting in delhi and writing new policies..new ministers and babus want to put their stamp and have over sized ego.
This is one ministry where this govt has failed miserably!!
Unless you demonstrate by giving a large new contract nobody will ever be interested

Abhiman said...

A very well written article.

In India, nobody makes money if DRDO's products are bought, simply because its a Government entity. People will make money only if expensive foreign weapons are imported. This includes the private Indian partners like Adani and Ambani, who're clamouring to make Gripens and F-16s. This also includes their friends in political circles.

I'm astounded that the mainstream media doesn't bring the absurdity of the MMRCA contest to the general public. As it is, the public is not well informed of matters of defence. Even lesser are aware of the Tejas' coming of age (the Mk1 and Mk1A), the Arjuns pounding the T-90s in comparative trials a decade ago, the efficacy of the Akash, and the lethality of the PAD/AAD missiles.

And yet the armed forces, defying all logic, want 110 foreign fighters, foreign FMBTs, foreign medium SAMs, and Russian S-400s.

It's high time that the media fearlessly questions these procurement decisions. The armed forces cannot be put to such a high pedestal, that they can't ever be questioned. Tough questions must be posed to the armed forces and to the defence ministry.

As someone famously quipped, "The nation wants to know!"