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.