The Chinese aggression of 1962, rudely awakened the Government of India (GoI), from its deep slumber, to focus on the requirements of the Armed Forces, to protect the territorial integrity of the Nation.
India has been the biggest importer of defence platforms inventory. Though the mantra was indigenisation, not much was realised and the import not just continued, but only kept rising in leaps and bounds. Efforts were being made to indigenise both major and minor equipment and weapon systems, to reduce imports and make equipment battle-worthy, with maintenance and desired modifications within the country at the least cost. Previous governments enhanced direct foreign (FDI) investment for defence requirements to the extent of 26 per cent. Even this policy failed to discourage imports and encourage local manufacturing of the military hardware. The imports continued unabated. Finally, the GoI decided to raise the FDI to 49 per cent.
The present Government in its first term made Make in India its mantra. Unfortunately, this too did not yield the desired results. Breaking past traditions, the present government, in its initial term, for the starter, placed an order for manufacturing of Self Propelled (SP) Guns on Larsen & Toubro (L&T) India. L&T had participated in a global tender for this order and won the contract hard way. The second big change was, changing the management system of the Ordnance Factory, Korba. It will now be headed by a retired Major General and will hence be a joint Indo-Russian defence enterprise. About 50 SP Guns have been supplied by L&T till date and the Ordnance Factory, Korba will soon start production.
The present stand-off at LAC with China and Covid-19 pandemic (ironically), have been blessing in disguise for Make in India mission in defence production; compelling the government to bring about major changes in the policy of procuring defence hardware of all kinds for all the three defence services. In May, Finance Minister Smt Nirmala Sitharaman allowed FDI in defence up to 74%. This was followed by another path breaking announcement, brought by MoD, to ban imports of 101 items, for procurement by the services over the next five years. Some of these items may have been already introduced into the Services or maybe in the pipeline in various stages of procurement. Those already in Service can enhance their Qualitative Requirements to desired levels.
Certain important initiatives were taken in the last 8-10 months which finally led to the ban on 101 Items.
• Introduction of Intellectual Property Rights and Patenting of Defence Technology and Products developed in India. (February 2019)
• New Items added for granting a licence to produce in India such as Artillery Guns, Warships, Tanks. (September 2019)
• Formulation of New Department of Military Affairs and Appointment of Chief of Defence Staff. One Important Task was to regulate the Defence Procurements of all Three Services in Acquisition Wing Of Min of Defence. (December 19)
• As a part of defence diplomacy, Indian Missions in 10 more countries to have Defence Attaches to attract FDI and Export of Indigenous Equipment. (February 2020.)
• An announcement by the Finance Ministry to increase FDI in Defence from 49% to 74%. (May 2020)
Banned Items
By prohibiting the import of these 101 items will now be available for the Indian industry to produce and supply to the defence services. Additionally, only Indian companies will be able to compete among themselves and no foreign vendor will be able to bid. These 101 items will come in the ban list, in a phased manner. To make this clear, there will be different cut-off dates for various items starting from December 2020, December 2021 and so on. Some of these will be banned by December 2020 and the last in December 2025. This is an excellent way ahead, as the Services will not be starved of vital equipment needed to upgrade or replace the existing critical gaps in their inventory and yet gradually but definitely progress to made in India military hardware. We all are aware that the lead time for the manufacture of defence platforms are long. Rafale was ordered in 2016, and the first batch has been received now and supply will continue till 2022 (or last will be received not earlier than 2022.).
Military-Industrial Complex
Manufacturing of equipment required by the Army, in particular, has been in the domain of Ordnance Factory Board (OFB) and Defence Public Sector Undertakings (DPSU). It was a legacy of the British Raj which continued for 70 years after Independence. As it is, procurement of such critical and exorbitantly costly weapons from a Government-owned Public Sector Undertaking was not the best way forward after the independence in 1947.
The Army has no other option, but to obtain their requirements from these government agencies and there can be other scenarios which can be worse than this. Immediately after independence, India had to balance the economy between defence requirements, social needs and infrastructure development. On this tightrope walk, not surprisingly defence was relegated to the last. In terms of budget allocation, the bulk is now being spent on Pay and Allowances leaving little for modernisation.
This has led to procurement on a piecemeal retail basis, rather than bulk. This makes the allotment of these resources to be controlled centrally, and unavailable when needed most. The changing environment of NO Imports of 101 items, must be seized by the industry captains and made full use of, to create military-industrial complex in developing defence clusters like Uttar Pradesh Defence Industrial Corridor, presently planning to develop. There is a budget of 4 lakhs crores up for grabs.
Additionally, it will open up possibilities of export of equipment to other nations. The Armed Forces will get all their needs to face their adversaries in the most efficient manner. It will also deter our neighbours, to cast an evil eye on the Indian territory.
Government of India, Industry Captains the Three Services have a golden opportunity to join hands and make this decades-old dream come true.
• As a starter, GoI must fund research in high value cutting edge equipment needed for the Services.
• The private sector must choose partners who have a high standing in the world as an exporter of highly proven equipment.
• Feedback for the existing export can be assessed.
• The industry must nurture MSME, small industry to produce quality goods. As even low tech items like fasteners and rubber items are known to have the reason for failure in the exploitation of the equipment.
• Punitive punishments must be imposed in case of equipment failure after being accepted by the services to ensure quality and safety. Bulk production must adhere to quality.
• All such orders must be kept out of Courts which will lead to inordinate delays if failures occur.
Advanced Light Helicopter, Light Combat Aircraft, Pinaka are examples of already introduced equipment. Rifles, Night Vision Devices, Tanks, Infantry, Combat Vehicles, Guns are examples of Prototypes developed and being tested by Private Industries. The Indian Industry has enough experience to produce Drones, Radio Sets, Remotely Operated Vehicles, UAVs, Robots and many other types of equipment. There is no doubt in the next decade India will move from importer to a Major Exporter of Defense platforms.
