Current Modi government in India has accorded highest priority to make in India for boosting its economy and creating employment to its young population. Defence production is one of the priority areas for make in India so as to make India self reliant in defence production where about 70 percent of capital acquisitions in weapon and equipment comes through import. Self reliance in defence production will prepare the nation better to deter and meet the challenges from perceived adversaries. Total global defence export business is to the tune of 1.5 trillion dollars. Therefore, it makes sense to give a boost to defence production in make in India.
One has to pause and think how a countries like China and South Korea that were either at par or inferior to India in industrial and technological development till 1970s became now exporters of defence items and India remained one of the biggest importers in Asia. Definitely, the answer lies in technology acquisition through FDI in civil as well as in defence technology. Therefore, if India wants to boost its defence production, it should learn lessons from China and South Korea and should attract FDI in defence production. Unfortunately, state owned defence manufacturing units and PSUs could not do much as they were constrained by inefficiency of DRDO in developing new products and weapon systems. What ever little bit they could do is mainly due to technology provided by erstwhile USSR during cold war.
For acquisition of technology, two pronged strategies have to be adopted. First strategy which is long term, may focus on invigorating DRDO through structural reforms and creating parallel R&D organization in defence public sector units or in joint venture under PPP model with well defined IPR sharing so that indigenous defence technology development could be propelled. The other strategy which is relatively short term is to attract FDI in defence production as it will bring not only bring the contemporary or best technology but will also bring capital required. Government has already increased the FDI from 26% to 49% in defence sector, and in strategic defence technology there is a mechanism to take FDI beyond 49% also.
However, in order to boost up the make in India programme in defence sector, one has to realise that defence industries works in monopolistic or oligopolistic market where buyers are few mainly the branches of government involved in external and internal security. Therefore, one has to ensure that sustained market has to be there for those who are investing in defence production so that reasonable return on investors investment are assured. Without assured market for a reasonably long period, nobody will invest their money. So, first reform has to be made at demand side. There should be a long term perspective plan for acquisition where specifications needs to be frozen for a reasonable period of time keeping in mind the availability of technologies at competitive and affordable price, strategic requirements based on capabilities of potential adversaries and incubation period of next generation weapon system development. GSQR should not be based on whims and fancy of some of decision makers with vested interest and should not change frequently. Manufacturers views should also be taken while framing GSQR. If a contract is won by one company, then it should supply the item for 5 to 10 years till it recovers its return on investment or technology is phased out globally or becomes irrelevant. Besides providing stable, predictable and assured indigenous market government should also help the investors in accessing the global market through diplomatic means. Apart from above it will also require adequate infrastructure and facilities in form of road, power, water, port, and ease of doing business through tax reform, land acquisition, simple environmental and other statuary clearances. A boost in defence production in India will improve its defence preparedness, boost economy and provide employment apart from changing the technological landscape of India as it will also boost civil industries.
Avinash Chander, DRDO chief was removed on 13th January,2015 from this coveted post stating the reason tha induction of young blood is required to propel R&D activities at greater speed. Perhaps the same have been indicated by PM Modi during his address to DRDO scientists on 20th August, 2014 when he directed the DRDO to ensure delivery of cutting-edge weapon systems to the armed forces in time to keep India ahead in the national security arena and lackadaisical attitude will not work.Though the stern message was couched in mild language, the intent behind it could not be lost. Most of DRDO projects, ranging from Tejas light combat aircraft to long-range surface-to-air missile systems, after all, are running years behind schedule with huge cost overruns. . This indicates that Modi Government is not going to spare any lackadaisical approch in defence research and development. The same will be applicable to defence production units under Ministry of Defence and DPSUs (Defence Public Sector Units). Though Avinash Chander has earned good name in missile programme in India. But, international peer group and experts also see lacklusture in India's development of military technology. Given below is the view of international expert published in SIPRI specially about missile development programme.
Military research and development (R&D) in India is not progressing as rapidly or as far as its leaders had hoped and observers had predicted. The obstacles preventing India from developing a more advanced military technology base are primarily technical and economic, stemming from chronic problems with project management rather than any lack of scientific resources. Indian military R&D programmes have achieved some immediate goals but have not created the anticipated technological momentum that would allow them to move from limited import substitution to indigenous innovation. Consequently, reports to the effect that sophisticated conventional or nuclear weapons are easily or inevitably within the grasp of India or other countries that do not share India's scientific resources should be viewed with scepticism.
The Prithvi (Earth) battlefield support missile's role can be expected to be similar to that of the US Army Tactical Missile System (ATACMS), but it is less flexible, being limited in particular by the decision to use liquid fuel and the Indian Army's limited battlefield surveillance capabilities at the missile's full range. Strictly speaking, the Prithvi system should include an integrated surveillance and mission planning supportcapability and is incomplete without one. Although the Army has accepted the first delivery of the Prithvi and is beginning field testing, it is reportedly reluctant to buy more than 80, given a procurement budget that has fallen by 17% in three years. While its role may be similar to that of the ATACMS, the Prithvimissile is more closely comparable to the Soviet Scud-B or the German V-2.
The Agni (Fire) missile test bed is a completely indigenous design. India's chronic problem of systems integration in programmes of this level of complexity have only been overcome in cases where there is foreign management assistance. Also, there is no service requirement whatsoever for the Agni, a significant barrier to its deployment in the procurement budget crisis. The Indian Air Force has not been given a strategic or nuclear bombardment mission for which it might use the Agni, nor does the Army require a missile with the Agni's range.
In view of same DRDO and DPSUs have to mend their ways and tighten their belts. It needs overhaul its organizational structure and change its organizational culture. Will it be able to meet the expections of PM Modi in delivering cutting edge defence technology in a reasonable time frame that is yet to be seen.
Defence preparedness requires acquisition of means to match the capability of perceived adversaries apart from will power. The means includes fighting forces, their skills, weapons, equipment and other supplies required for operation in theater of war. Modern warfare is highly technology intensive, so major challenge before armed forces are acquisition of weapons and equipment with adequately high degree of technology matching that of the perceived adversaries. Now country has provided adequate budget allocations for acquisition of weapon, but the same is not utilized due to non availability of adequate indigenous sources of supplies on account of poor performance of DRDO and DPSUs, and importation of the same sink into quagmire of corruption in many cases and this delays acquisition. There is need to develop defence R & D as well as production facilities in private sector as US does. Indigenous private players in defence production has to be assured of load on sustainable basis and government need to support them in getting market abroad. For achieving this, there should be a rationality in choice of specification and quality requirements of weapon and long term perspective plan needs to be shared also with the local manufacturer of weapons and equipment in private sector , so that they could gear up themselves to meeting requirements of defence forces.