What’s holding up arms indigenisation?
There is no alternative to indigenisation. The importing country is not in a position to develop forward technology leaving its armed forces holding obsolete equipment. Then there is the ever-present danger of denial of crucial supplies by the exporter in times of conflict
IN the early 1940s, barely a few years after Tata Steel had set up its central research laboratory in Jamshedpur, the company was asked by the then British Indian Government to develop and make armour plate steel for the war effort. Not only did the company develop the highly specialised steel within a year but also used it to make infantry combat vehicles called Tatanagar, which earned a lot of praise for their performance from the Allied troops fighting in the Middle East. Today, seventy years later, we are looking to import infantry combat vehicles from a European country. That is the sad tale of independent India’s search for self-reliance in defence equipment.
About 75 per cent of India’s weapons purchases came from imports during 2007-11. In his recent presentation of the union budget for the next financial year, the finance minister, P. Chidambaram, expressed grave concern about the worsening current account deficit (CAD). But India’s military machine is in urgent need of modernisation which may cost as much as 100 billion US dollars in the next 10 years. With the tight foreign exchange availability, achieving this modernisation will be almost impossible if we stick to the 75 per cent imports model of the past.
Arms imports have a whole slew of harmful side effects. Corruption is not the only fallout, although the noise made about kickback scams by the media seems to indicate that. There are worse evils such as high levels of profiteering in spares and services by the foreign equipment suppliers. Since equipment imported is not the same as technology acquired, the importing country is not in a position to develop forward technology and its armed forces are left ultimately holding a lot of obsolete equipment. This is very true about India. Then there is the ever-present danger of denial of crucial supplies by the exporter country in times of conflict if its foreign policy dictates such a course.
Impediments to indigenisation
Therefore, there is no alternative to indigenisation. So what is holding it up? Historically, the first big impediment placed was the placing all the development and production eggs in the single basket of the public and ordnance factory sectors. Burdened by poor work and management cultures and handicapped by government diktats, these entities were short on productivity, innovation and anticipation. They rarely met delivery schedules for equipment involving well-established technologies. Their achievement in delivering equipment with new technologies was much worse. This pushed our armed forces to import and plug the supply—demand gap. The private sector, which had done such a commendable job in meeting the demands of the Allied forces during the Second World War, was largely ignored.
The second major impediment to indigenisation came as a result of easy and cheap access to arms from the Soviet Union in the early sixties. Although this flight to succor by the USSR came as a knee-jerk reaction to the debacle with the Chinese in 1962, the dependence rendered us technologically lazy. Even some brave and briefly successful efforts at self–reliance were given up. A prime example of this is the dismantling of the fighter aircraft design team in Hindustan Aeronautics Limited (HAL) which had been built up with considerable effort by Kurt Tank, Ghatge, Rah Mahindra and others and which had come up with the HF--24 Marut jet fighter all on its own in the fifties.
The pursuit of indigenously designed fighters was given up in the sixties just because the USSR dangled before us the carrot of the cheaper and supersonic MiGs. If that design team of HAL had been kept and strengthened over the years, perhaps we would have made a much better job of developing the fourth generation fighter than the sorry tale that the LCA project has been. India’s dependence on Russian arms technology has been so addictive that even today, though the Soviet Union is no more, over three-quarters of our defence equipment imports are still from Russia.
The third crucial obstacle to increasing self-reliance in our defence equipment has been, ironically, the very institution tasked with increasing indigenisation — the Defence Research and Development Organisation (DRDO). Formed in 1958 from the amalgamation of 10 existing defence laboratories, it is today a network of more than 50 laboratories manned by over 5,000 scientists and about 25,000 support staff conducting research and development on a range of topics from spices to missiles.
By and large, the DRDO has failed to deliver, barring perhaps in the areas of food, radar networks and missiles. Even in the case of missiles, perhaps it was the strong base technology acquired from our successful space programme that enabled the development. In many critical areas like light arms, ammunition, artillery, tanks, aircraft, submarines, electronic systems and others, its performance in developing new products has been characterised by inordinate delays, incompleteness resulting in unexpected problems in series production and inability to incorporate latest technologies. The result has been a scramble for imports by the defence establishment.
A committee set up in 2007 under P. Rama Rao, former secretary, department of science and technology, to recommend restructuring of the DRDO, had suggested setting up of a Defence Technology Commisssion, merging the labs into seven clusters and creating a commercial arm to spin off products and technologies for civilian use. Frankly, this does not deal with the basic problem that there is a wide credibility gulf between the defence manufacturing units and the DRDO labs.
Encouraging private sector
It is time to seriously consider merging the DRDO labs of similar domain into the production units, as for example, Laser Research and Development Establishment into Bharat Electronics Limited and National Aeronautical Laboratory into HAL. At least then, we will see more synergy and symbiosis between R&D and production. The proposed Defence Technology Commission could then become like the DARPA in the USA and direct grants for advanced technology development to our technical universities which are starved of both funds and meaningful research projects.
A succession of defence ministers have, over the decades, rendered lip service to the cause of defence equipment indigenisation but not much action was taken on the ground by them. The latest to mouth the self-reliance slogan is the current defence minister, A.K. Antony, no doubt spooked by the kickback imbroglio involving the Augusta helicopter deal. He has promised to again revise the Defence Procurement Procedure, the latest version of which was released as recently as 2011. He wants to create conditions for the private sector, particularly the small and medium enterprises (SMEs) to play a greater part in defence production. Antony would be well advised to first consult some of those SMEs who have supplied components to the defence sector in the past. He might be unpleasantly surprised by the flurry of criticism he receives about the long delays in inspection and payments for the supplies made. Even large private enterprises which have taken up big projects for developing defence equipment have come up against the stone wall of indifference from the concerned customers in the defence sector.
The noises being made by the defence ministry about encouraging private sector involvement in production and the policy of compulsory 30 to 50 per cent offsets of local purchase against value of imports has enthused a few major Indian groups to invest in manufacturing facilities for defence equipment. However, they still have to tie up with foreign producers to access the technology. Foreign companies would be more inclined to such joint ventures if the FDI limit is liberalised beyond the present 26 per cent.
Perhaps Antony would do well to set up an Indigenisation Commission, under an entrepreneur–bureaucrat, with members drawn from private sector companies, both large and small, which have actually developed and supplied arms in the past. This commission could be tasked with identifying obstacles to the indigensation process and suggesting methods to eliminate them.
Wednesday, June 5, 2013
Posted by Professional Matters at 7:31 PM