A Comprehensive Strategy Needed
The Kargil war made me realise that unless India becomes adequately self-reliant in arms, ammunition and equipment for its Armed Forces, its national security will remain highly vulnerable
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The Kargil war made me realise that unless India becomes adequately self-reliant in arms, ammunition and equipment for its Armed Forces, its national security will remain highly vulnerable.
During that war, we had major deficiencies, not only of items imported from abroad but also those produced within India. In that crisis situation, every exporting country and OEM exploited us. Some cited ‘political sanctions’ due to Pokhran nuclear tests, but were willing to sell their old surplus weapons. Others sold us half dud ammunition at exorbitant prices. Imported satellite pictures turned out to be three years old and thus, useless.
The situation is not different today. Our Armed Forces are in urgent need of modernisation to be able to defend itself in a deteriorating regional security environment. Why? Because India’s primary defence industrial base comprising 39 ordnance factories (OFs) and 10 defence public sector undertakings (DPSUs) have been thriving on licensed production (with technology acquired long ago) and their captive buyers. They have neither the capability to develop new state of the art equipment, nor undertake R&D for product improvement. Only 30 per cent products developed by the DRDO have entered services in the last 17 years.
It has taken more than a decade for the government to realise that 26 per cent FDI is insufficient to induce OEMs to collaborate with Indian partners. Till recently, out of $280 billon of FDI, only $5 million had come for the defence industry. Of 104 industrial licences sanctioned, only 35 companies have started work. The acquisition procedures, vested interests, and the age-old nexus between OFs, DPSUs and Ministry of Defence (Production) have worked to stall moves towards open competition. Some other problems are:
Blacklisting of a large number of OEMs. Those who do not carry this cross, find cultural mismatch in working with DPSUs and OFs. They prefer collaboration with private sector companies.
India is around 135th in the Ease of Doing Business Index. It takes 80 to 137 weeks to complete procurement procedures up to placing of orders in India.
Despite the push to kick-start the Make in India programme and the urgent need to modernise the armed forces, the budgeted allocation is neither sufficient nor does it facilitate defence industrial activity. Even with the latest increase in the FDI and an elaborate DPP mechanism in place, India’s defence industrial base will take 25-35 years to make up deficiencies in our arms and equipment with a reasonable level of modernisation!
There is a need to work out a comprehensive strategy and holistic policy framework for the immediate and long-term defence requirements. The strategy should include (a) facilitating OEMs and domestic defence industrial houses to expand their hi-tech base soonest; (b) creation of a skilled worker base by the government and industry; (c) assured purchase orders when a product meets user’s qualitative requirements; (d) simultaneous off-the-shelf purchase of urgently required items from the approved OEMs; (e) an unambiguous export policy on defence equipment and; (f) sufficient defence budget for capital purchases.
Notwithstanding the desire to Make in India, in the initial stage we should also place orders on the OEMs for some complete (or in CKD condition) items considered minimum essential to address our immediate operational needs, lest we are caught in another Kargil war situation.
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