There is a rapid change in the geo-political and resultant security environment in the world. With USA not willing to play Global Policing role, any more, the importance of regional powers and regional alliances has grown.
The security situation is not only fluid but has become a little complex, the Rashtriya Rakshamantri recently emphasized during the launch of Def start up challenge 5. He further emphasized that ; considering these fast changes India has to focus on self reliant def manufacturing industry.
As No Nation can ever emerge as a strong player in armament which is weak in manufacturing, the Make in India vision becomes important.
Defense manufacturing and acquisition of weapon systems is a complex process and India which is one of the largest importer of weapon systems despite making huge noises for last 7 decades about indigenization of weapon systems will have to take concrete steps rather than relying on rhetorics.
Notwithsatnding the above, the current Govt has shown reasonable urgency and focus on this aspect and has taken few steps ;
One. To support defence modernisation, in the budget 2021-22 the defence capital outlay has been increased by 18.75% from the preceding year. This is the highest ever increment in the last 15 years.
Two. The Government has also spelt out its vision of achieving a turnover of Rs US$ 25Bn including export of US$ 5 Bn in Aerospace and Defence goods and services by 2025.
Three. The Government of India has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route.
Four. An innovation ecosystem for Defence titled Innovations for Defence Excellence (iDEX) was launched in April 2018. iDEX is aimed at creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defence and aerospace needs. More than 700 start-ups participated in 18 problem statements pertaining to National Defence requirements, launched under 3 rounds of Defence India Start-up Challenges (DISC). 58 winners were announced after rigorous evaluation of applications by the High-Powered Selection Committees. Contracts have already been signed with several winners followed by release of first tranches and second tranche is also being released for some cases for prototype/ technology development.
Five. Defence Innovation Organisation (DIO) launched as a non-profit company to foster technology development and innovative products with commercial potential for the defence sector. The company is being formed by Bharat Electronics Limited (BEL) and Hindustan Aeronautics Limited(HAL). The Defence Ministry had in December approved the creation of a Defence Innovation Fund (DIF) under which the DIO is being formed
Six. In Feb 2018, Government decided to establish two defence industrial corridors to facilitate growth of defence industrial base in the country. They span across Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli in Tamil Nadu and across Aligarh, Agra, Jhansi, Kanpur, Chitrakoot and Lucknow in Uttar Pradesh (UP). About Rs. 800 crores each in UP Corridor & in TN corridor have already been invested.
Seven. The govt has also tried to bring in transparency in def acquisition at the same time simplified procedure for licences and def procurements.
Although Its too early to comment on the efficacy of these measures as India which has till now been one of the largest importers of military hardware but the recent results are encouraging;
One. The exports grew from Rs 1000 cr in 2014 to almost 11000 cr in 2020. India in last seven years has exported def hardware amounting Rs 35000/ crores.
Two. Many big reputed brands with deep pockets and huge investment capabilities have now shown keenness in def manufacturing and have set up some of the world’s largest facilities; Tata Advanced Systems Limited, Tata Power SED, L&T, Bharat Forge, Mahindras, Reliance Naval and Engineering Limited which has the largest engineering infrastructure in India and one of the largest in the world. Its the first private sector company in India to obtain the license and contract to build warships. It has recently won a contract for repair and alteration work of warships of US 7th fleet which was earlier done in Singapore.
Three. As a result L&T has won a contract to manufacture K9 Vajra self propelled guns.
Given the results achieved, as of now it appears that necessary focus is being given to this neglected sector but there is a long way to go as def manufacturing without the govt’s hand holding will not make the desired progress.
One can easily assess for himself as to how far the Nation has to go to achieve self reliance by this small example. Indians for last one decade have been discussing that Terrorists are likely to use Drones against high value targets like Airforce bases etc, now that the attack has taken place the Indians are going around the market to ink a deal with foreign manufacturers and what is more laughable is Pakistan is also approaching the same manufacturer from Turkey, which is a leading manufacturer of High tech Drones. Is it not shameful? Were we sleeping all these years? If a country like Turkey can manufacture , whats wrong with us?
So, Defence manufacturing needs ; Research and Development, ramping up design and capabilities on critical technologies, improve quality, Ease to do business, provide Govt support to Private sector, assured purchases and marketing.
However, the consumers of these products i.e the armed forces feel ; there is still inadequate investment in R&D and only lip service to technology funding. The allocation to DRDO remains sticky – around six per cent of defence expenditure though successive parliamentary committees have recommended a minimum allocation of ten per cent. the Quality of the product served to them is not upto the desired standard and the whole process is still taking lot of time as a result by the time the desired product is served to them it becomes obsolete and Private sector giants such as the Tata, L&T and Mahindra etc allocate mere 1 % on R&D where as in countries such as France where corporate organisations invest more than ten per cent in R&D, PSUs such as HAL show a poor level of value addition as they are largely system integrators.
So, lets not get elated by the increase in exports as these are items of low technology like Helmets, bullet proof jackets, artillery shells etc.
So, it’s a long road ahead before India emerges as a top player in def manufacturing and becomes self reliant. Therefore, Unless Make in India becomes a mission that is driven with total resolve by the Govt, India will continue to struggle modernizing its armed forces