Aiming for the top

SOURCE: INDIA TODAY

This year, India saw a convergence of multiple security threats, economic, military and health-related. A pandemic triggered an economic crisis and a military deployment by China triggered anxiety on the country’s northern borders. But, as they say, sometimes it takes a crisis to kickstart reform, especially in the defence sector.

In May, the ministry of defence (MoD) rolled out some of its biggest policy incentives to boost indigenous defence manufacturing. The biggest post-Independence reforms announced over the past year include the appointment of a new chief of defence staff (CDS), a decision to corporatise the 40 defence ordnance factories and banning certain defence imports. These will help India address the twin challenges of modernising its ageing military hardware and indigenising its military to achieve self-sufficiency.

The first India Today Defence Summit, held virtually on November 21, brought key stakeholders on board to discuss the MoD’s indigenisation drive. There was plenty of optimism about the current round of defence reforms which has set clear objectives and deliverables. It was heartening to see government officials speak of the public and private sector in the same breath, marking a huge change in attitude. There are, of course, concerns over the long road ahead, the yawning gap between technology and indigenous capacity and the slow pace of realisation between an intention and an order. The summit addressed these issues and many others.

THE MoD’S VISION FOR ATMANIRBHAR BHARAT

The defence ministry has, for the first time ever, set a goal of a $25 billion or Rs 1.75 lakh crore turnover in defence manufacturing in the next five years. This includes an export target of $5 billion or

Rs 35,000 crore worth of military hardware. It has given a commitment of orders worth

Rs 50,000 crore to the Indian industry each year and hiked FDI in defence under the automatic route from 49 per cent to 74 per cent.

Raj Kumar, secretary, defence production, says ‘Atmanirbhar Bharat’ is a step-up from the MoD’s 2016 ‘Make in India’ policy; it is an expression of confidence in indigenous capabilities. The MoD had announced a first negative list of 101 items (for which there would be an embargo on import) and is planning to follow soon with a second list. The course correction includes increasing the indigenous content in imported equipment and reserving items for production by Indian owned and controlled entities. The system is changing in unprecedented ways. As M.V. Gowtama, chairman and managing director of the public sector Bharat Electronics Ltd, says, Indian defence firms now routinely get tips on export opportunities from embassies and military attachés overseas, which was unheard of in the past. The key to all government policy, however, is time, particularly for private sector players in defence for whom time and money are inextricably linked. No one knows this better than Satyanarayan Nandlal Nuwal whose Solar Group is one of the world’s top five commercial explosives manufacturers and who is beginning to receive his first orders after nearly a decade of investing in the defence sector.

INVESTING IN FUTURE-READY DEFENCE TECHNOLOGIES

One of the biggest challenges facing India’s armed forces has been the need to equip itself with rapidly changing defence technologies. But, given the existing deficiencies in the defence industrial production base, these technologies are either never conceptualised or never acquired in time. It could well be argued that the current procurements for warships, tanks and fighter aircraft were part of an earlier ‘revolution in military affairs’, whereas the blistering rate of change means that the era of the ‘disruption in military affairs’, where hypersonic missiles, combat drones and robots, can potentially change the face of war. India’s previous system of users, designers and production agencies working in silos rather than jointly is not fit for the purpose of acquiring rapidly-evolving critical technologies.

The panelists, which included an official from the government’s premier defence research agency, a leading private sector producer and a military-academic, highlighted the need to rethink technologies, a civil-military fusion with armed forces driving procurements while being plugged into a network comprising the DRDO, academia and industry. This is the approach the US followed in the past century and what China has done in the present one. This is the only way India can boost its percentage of indigenous military hardware to a desired 80 or 90 per cent.

SMALL ARMS, BIG WORRIES

WHEN WILL INDIA BECOME ATMANIRBHAR IN SMALL ARMS?

Among the biggest Indian defence conundrums is that a country that is self-sufficient in making intercontinental ballistic missiles is today shopping for simple assault rifles from the US, Russia and, believe it or not, even the UAE. Beginning this year, the world’s second-largest army began receiving its first US-made assault rifles and will set up a production line to build a Russian rifle. There is a promise meanwhile that future procurements will be made from the Indian industry, but so far there is no sign of this happening.

Small arms manufacturing was a public sector monopoly, specifically of the giant ordnance factories. The problem, as articulated by our panelists, a decorated Indian army general, a former chairman of the Ordnance Factory Board and the CEO of a Bengaluru-based start-up, is this: most of the technology and knowhow are already available within the country, but we need guidance and synergy that will come from all stakeholders being on board. The army, in particular, needs to have skin in the game by encouraging the development of an indigenous small arms industry, just as manufacturers do, to make investments in production capacity.

FROM A BUILDER’S NAVY TO AN EXPORTER’S NAVY

CAN INDIAN SHIPBUILDING MAKE THIS LEAP?

An area where the government’s export push has great potential is the design, construction and export of warships. India is fully self-sufficient in warship construction, it makes all classes of fighting vessels, from aircraft carriers to frigates, in its domestic shipyards. The country still has some distance to go before it can break into the export market, but now would be a good time to begin. This year, the Garden Reach Shipyard and Engineers (GRSE) Ltd delivered the fourth and last unit of the Kamorta class anti-submarine corvette, the warship with an indigenous content of over 80 per cent, the highest ever for an Indian platform. Indigenous designs like these have export potential.

The panelists, the head of one of India’s largest public sector shipyards and the head of the defence division of India’s largest private sector defence player, agreed that it was time for India to start developing and exporting complete platforms. The India head of Spain’s largest shipyard, another panelist, explained how his country broke into the highly competitive world of global warship exports, first by meeting the needs of their navy by gradually indigenising platforms and then focusing on export markets.

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