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Editor-in-Cheif view on Defence Industrial base for India

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A prime requisite for the rise of a major power is the capacity to achieve autarky in critical weapon systems. India has been struggling unsuccessfully to attain this autarky for the last six decades. Self-reliance in defence is a vital imperative not just for achieving strategic autarky but also to urgently generate jobs for a rising youth bulge in our demographic profile. By 2026 we will need to generate some 700 million jobs. Off-shoring defence production jobs to USA or France therefore becomes a particularly bad idea in this context.

How do we create a vibrant Defence Industrial Base (DIB) in India?
Why have we failed to craft one so far?

Till date India has passed through three cycles of weapons modernisation. The first one, post independence, saw us spending a measly one per cent of our GDP on defence. This invited the disaster of 1962. The second, post-1962 cycle of modernisation, saw a massive Soviet effort to subsidise our military build-up. It was in this phase that we saw the onset of licensed production in a big way to achieve self-reliance. This was purely an optical illusion. License production as a quick fix did great damage to our in-house Design and R&D capacities. The HF-24 design team, the teams that made our 75/24 Howitzer and 105 mm Field guns were all disbanded and the experience irrevocably lost. Only the Indian Navy retained its Ship Design teams and is today building, rather than buying a new Navy. The Defence Public Sector with its captive customer base felt no need to innovate or carry out any Product improvement or technology development. It failed to carry out any in-house midlife upgrades of the equipment it was manufacturing. The sudden collapse of the USSR in 1990 highlighted the hollowness and fragility of our self-reliance. We went panic buying for spares to keep our Soviet era fleets of jets, tanks and ships going. As it is, most of these were nearing the end of their life cycle. India had to recapitalise its military stock in a major way. The demise of the Soviet Union eclipsed our highly subsidised source of high-tech weaponry. Our own economy came perilously close to collapse in 1991 and we had to divert all our energies in reviving our economy. Our military modernisation had thus to be postponed by over two decades.

We are now into our third cycle of military modernisation. Almost our entire capital military stock of the Soviet era is being replaced. Despite all claims of self-reliance, 74 per cent of this capital military stock is being imported from Russia, Israel, USA and France. Our indigenous Public Sector Defence units have not been able to provide even basic replacement of small arms and rookie trainer aircraft. Some 30 years down the line, we will enter the fourth cycle of military modernisation when the capital stock now being inducted will need to be replaced. Will we still be importing all our weapons in 2030-2040? It is a pathetic thought for a self-confessed Regional Power and an aspiring global power. We need to indigenise with a vengeance – not just for reasons of Strategic autonomy but even more for reasons of economic well being. We need to create a vibrant Public-Private Partnership in Defence. The dynamism of the Private sector must be harnessed at the earliest. Aged and hierarchical defence bureaucracies of the public sector and DRDO by themselves can never deliver self-reliance. Let us not forget that the Private Sector had, in just 17 years, transformed India from a failed economy to a Trillion dollar plus economy.

We need to learn lessons from the Chinese Military-Industrial Complex which is also being corporatised. The simply amazing fact is that the failed state of Pakistan next door has been exporting its small arms and low grade military products to some 30 countries.

We must get in the Private Sector. We must revise FDI levels in defence Industry to 49 per cent from the unviable 26 per cent. The Defence Industry needs to be given tax concessions and incentives (on par with SEZ). We must get the brightest and the best for our R&D and Design Teams. The Private Sector will be able to get them easily. We must put in place the Public-Private Partnerships for foreign tie-ups for producing high-tech military equipment for 2030-40 in place Now. We must not waste out the design experience gained in the LCA and Arjun Projects and build on this to design gen-next tanks, ICVs and fighter jets. In the here and now we must invite Private Sector Indian consortiums to produce a family of modern small arms, Future MBTs and ICVs, Medium Transport Aircraft, Tactical and MALE UAVs as also Multi-role Helicopters for the Navy at the earliest possible. The Private Sector is already getting in a big way into the Homeland Security Sector. Why can’t it happen in the field of Defence Production? The labyrinth of rules and red tape created by the ponderous Ministry of Defence cannot become an end in itself. The Country needs a DIB not a self-serving and self-perpetuating defence bureaucracy.


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