Indigenising defence production: The necessary goal - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Thursday 7 March 2013

Indigenising defence production: The necessary goal

Defence cuts in the prototype development budget have effectively bombed indigenisation

by Ajai Shukla
Business Standard, 8th Feb 13

The anaemic growth in India's defence capital budget this year, along with news that China is expanding its own more robustly, puts indigenisation to the forefront of the conversation again. As Defence Minister A K Antony has argued, it is essential for India to build its own defence equipment to avoid the skulduggery that is involved in buying arms. No country has ever become a great power without building its own arms. This is no longer just a question of strategic autonomy; today it is also a military-technical issue, in an era when the capabilities of defence equipment depend more on software than on hardware and when it is increasingly easy to compromise weaponry sold to another country through the introduction of malware and kill switches.

No defence industry can be built without careful nurturing from the government. If Russia builds some of the world's best fighter aircraft, while being unable to build a decent passenger car, it is because Moscow has spent decades on an aviation production eco-structure while leaving the automobile industry to develop itself. While the private sector has been allowed into defence production since 2001, entrepreneurs have been expected to build their own capabilities - with the ministry of defence (MoD) playing little role in co-ordinating, mentoring, funding or monitoring. Without any funding support for the risky and high-cost research and development, or R&D, that underpins defence systems, and without any assured orders for the weaponry that they develop, why would firms invest? Complicating matters even further is the maze of regulations. Companies cannot build or import ammunition without obtaining time-consuming permissions. No weaponry can be test-fired since the government controls all firing ranges. A range of tax benefits that have been extended to the moribund defence public sector units are denied to private companies.

The MoD must bring together the military, the Defence Research and Development Organisation and the defence industry to identify at least 100 R&D and production projects that will feed into weapon systems that India can realistically build. This will need the MoD to declassify a sanitised version of the military's Long-Term Integrated Perspective Plan, which identifies the capabilities that the military needs to build. The MoD had promised to release a public version of the plan a year ago, but even today the defence industry remains in the dark, with no indication of what systems or sub-systems it should develop and build. Finally, once these projects are identified, they must be allocated to public and private defence players following transparent and fair bidding. This is already provided for in the Defence Procurement Policy, which permits 80 per cent funding by the government, with the defence company paying up the balance. Astonishingly, while the MoD's Acquisition Wing has informally identified a hundred "Make" category projects, not a single one has actually entered development. A year ago, the MoD's Acquisition Wing head had announced that 150-180 "Make" category projects would be identified and put up on the MoD's website. But with nothing having been done towards this, and with the defence budget for the next year slashing funding for this, indigenisation is set to remain a slogan rather than a reality.


  1. I'm starting to think that there is some logic as to why the government is not supporting the private defense industry.

    I think the examples as to why the government should not support private industry are staring at us in our face. The multiple wars America is currently in and has participated in since WWII are prefect examples as to why India should not develop a military industrial complex similar to Americas or the former Soviet Unions. Eisenhower once warned about of the threat that this military industrial complex posed. Unfortunately no one listened until it was too late. American foreign policy has been hijacked by this military industrial complex while it has left Russia in ruin.

    This corporate takeover of government has shaped India's history so profoundly that it is a fundamental part of India. India's policies for the first 50 years of Independence were written to prevent India from becoming what had ruined her people in the preceding 200 years. British imperialism remains quite vivid in the memories of our leaders and in its' people. I do not think they want to see India become what the British once were. War mongers who have been hijack by corporations for their own benefit. It has happened before and it is happening now (USA). Who is to say that it won't happen to India if she lefts her guard down?

    I can say that although it is frustrating to see India's military ill-equipped it is better to see that then see India starting foreign wars and murdering millions of innocent individuals for corporate profit. As the saying goes if you give him an inch, he will take a mile rings loudly. Private businesses will slowly erode the policies and defenses put up to prevent them from hijacking the government for their own benefit. In an area as crucial as national defense we must keep out vigil up to make sure that this does not happen.

  2. Not going to happen, there is too much corruption money in defense imports.

  3. And it will remain so. Still born. Until the mod eats their pride. Realizes that they cannot know al the nuances and issues pertaining to local production. Ever. They really need to cast an side their holier than thou attitude. And listen to the industry. And. I don't just mean to the ratan Tatas. We have so much that one can contribute. Only to be stifled in red Tapism, excessive rules, payment squeeze a perennial, whilst no issues in paying massive amounts to foreign parties.

  4. Thanks for giving that type information.That information is so helpful to us. Indian Defense Industry

  5. HAL has been producing MIG series of aircrafts for decades. It has produced hundreds of them during last five decades. What is the indigenous content of various MIG series of aircrafts. Why is it so that HAL is not able to earn substantial amount of foreign exchange by servicing MIG series of aircrafts in service with the airforce of various countries.
    What are the ‘know-hows’ and ‘Know-whys’ learned from the designers of the aircrafts. Has any of these technologies used during designing of the LCA Tejas. The nation wants to know if HAL is able to manufacture even twenty five percent of components of the engine of MIG 27. Have we ever thought of using a Kaveri engine for this aircraft. No body is even thinking in this line till now, though everybody knows that Kaveri is the future engine for aircrafts manufactured in India. The acquisition of technology and learning process from various collaborations must extend every year and should also generate revenue.
    There is no increase in production level either product wise or Unit wise at HAL. It is now important that every Unit and product of HAL becomes commercially successful and earns foreign exchange. Manufacturing must get more priority in HAL. Helicopter manufacturing capacity of HAL must be increased to hundred per year immediately to eliminate the supply backlog. Influence of foreign agents and lobbyists appears to be the only reason why HAL does not have any significant export earnings. There is so much to be done by MoD, but it has become corrupt to the core. The nation needs a change in governance.

  6. This is one reason I left India. There is too much permit raj still hanging around, especially in security and defense sector. Our govt and constitution is a damper to development. No wonder nothing seems to flourish in India.

  7. since tyagi... connected to aw101 dwals... would wondering... browne visit... to france just after... l1... raises eyebrows...

  8. I think a reverse argument can also be made - with the dismal rate of indigenous research and development from the DRDO, cutting the budget could in fact save money which could then be used to procure mature and proven systems the defense forces are in dire need of to defend the nation.

    Given the track record of domestic development efforts, it is a miracle that India hasn't cut back on this expenditure long ago and forced domestic R&D to become leaner and more efficient.

  9. Thanks for sharing the image with the air defence components in the foreground.


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