Maj Gen (Dr) Ashok Kumar, VSM (Retd):
We are once again discussing MRO (Maintenance, Repair, and Overhaul) and comprehensive National Power as part of our MRO Dialogues. We have previously touched on this subject, and today, we will examine it from a general perspective.
We are privileged to have Maj Gen Rajiv Narayanan,AVSM, VSM (Retired) with us. Maj Gen Narayanan is an expert in mechanized and mountain warfare and has an extensive background, including serving as a defense attaché at the Embassy of India in Tajikistan. He is a distinguished fellow of the USI and has published numerous articles and papers in leading journals in India and abroad. His knowledge of comprehensive National Power and how MRO activities can contribute to it is unparalleled.
Welcome, Maj Gen Narayanan. We are eager to hear your views on MRO opportunities in India.
Maj Gen Rajiv Narayanan:
Thank you very much. I am grateful to Gen Matharu and to you for providing this platform to share my views from a user’s perspective. When we look at MRO opportunities, it’s essential to consider how successful equipment manufacturers in India manage their MRO and sustainment activities, which contribute to their success.
Firstly, we must acknowledge that no OEM (Original Equipment Manufacturer) produces all the subsystems and systems they need. Typically, they produce about 20-25% of the critical components and rely on a robust ecosystem of ancillary suppliers for the rest. They act as the lead integrator to produce the final system.
For MRO, successful OEMs outsource servicing to franchisees who receive the necessary spares directly from these ancillary suppliers, not through the OEM. These franchisees are trained by the OEM to understand the mechanics of repairing the system. This model offers a blueprint for MRO opportunities in India, both domestically and internationally.
Thanks to the Ukraine war, many countries in our region, including Africa, are looking to India for the maintenance and upkeep of their Soviet-era or Russian-era weapons and equipment. A recent example is the MoU between Uganda and HAL (Hindustan Aeronautics Limited) for the maintenance of SU-30s.
From a military perspective, MRO operations are different because a single workshop may handle multiple types of equipment. Nevertheless, India has immense opportunities in the MRO sector. We have skilled manpower, developing infrastructure, and the capability to meet international standards, as evidenced by numerous international MNCs expressing interest in sourcing materials from India.
To achieve self-reliance (Atmanirbharta), we must develop an ecosystem that meets global standards. This involves becoming a trusted ancillary for OEMs, thereby reducing costs by sourcing spares domestically rather than internationally. Building this ecosystem will help establish India as a significant part of the global supply chain.
Moreover, initiatives like the SAGAR(Security and Growth for All in the Region) will foster regional stability and benefit neighboring countries by potentially involving them in our supply chain. To succeed, we must focus on developing infrastructure, such as ports, dedicated freight corridors, communication grids, and energy and water resources.
The strategic window for establishing our credentials as a reliable MRO hub is limited. Once proven, opportunities will expand, facilitating India’s growth as a supply chain hub.
Maj Gen Ashok Kumar:
Thank you, Maj Gen Narayanan. You’ve highlighted the vast MRO opportunities in India, not just in defense but also globally. With the current strategic window, India has the potential to significantly enhance its standing on the world stage.
In your view, how can MRO contribute to India’s comprehensive National Power, which is crucial for achieving its rightful place among the community of nations?
Maj Gen Rajiv Narayanan:
When we look at comprehensive National Power, the West typically considers three main factors: economy, military strength, and diplomacy. A fourth factor, STEM (Science, Technology, Engineering, and Mathematics), has also become important. Human resources play a critical role in all these aspects.
India has a vast pool of human resources at various skill levels—skilled, semi-skilled, and unskilled. By establishing ourselves as an MRO hub for global companies, we can leverage this human resource effectively.
The moment we create and offer ourselves as a reliable MRO hub, it not only enhances our economic strength but also contributes to military readiness and diplomatic influence. Our skilled workforce will be instrumental in achieving these goals, ensuring internal stability and fostering growth in STEM fields.
What happens is a lot of jobs get generated. It’s not just in the organized sector; even in the unorganized labor market, many jobs are created. When people have good livelihoods, they are less likely to be diverted into negative activities. Education becomes crucial here. Skilling is necessary, whether for skilled or unskilled workers, to handle these jobs effectively.
Once a robust ecosystem of ancillaries develops, both within and between states, dependencies increase. This reduces the tendency to destabilize others because it would have a reverse impact on oneself. A parallel can be drawn to Europe’s current situation: they had high dependencies on various resources from Russia, and when conflict arose, prices of everything soared. These dependencies are critical, and many in the global South are observing this closely.
A better economy leads to more funds for social welfare schemes for the underprivileged, covering areas like education and security. When job opportunities arise from good education, youth are less likely to be sidetracked into causing internal instability. With interstate dependencies, the geopolitical, geo-economic, and geostrategic stability of the region improves. This doesn’t mean external forces won’t try to destabilize, but it helps create a stable and secure environment for India, contributing significantly to comprehensive National Power (CNP).
Maj Gen Ashok Kumar:
Thank you, sir. You’ve rightly connected how MRO and related activities can contribute to comprehensive National Power significantly. But for this to happen, there are certain challenges. Skilled manpower is not evenly distributed, and there are challenges in staying updated with the latest technology. What are the challenges we face in today’s times in achieving this?
Maj Gen Rajiv Narayanan:
One primary challenge is providing stable infrastructure. No company will come here without it. This includes roads, freight corridors, railways, ports, power, energy, water, and critically, land. Many state governments have started creating land banks to address land acquisition challenges, but a balanced labor law is also essential to avoid strikes and disruptions while not skewing too much towards a capitalistic model.
Education is crucial. As global attention turns to India for stability amid geopolitical flux, external threats will attempt to create internal tensions. Disrupting education and skill development, creating labor issues, and obstructing land acquisition are methods used to destabilize. While some states have resolved these issues with land banks, others face challenges due to high percentages of arable land.
Moreover, after the 20th Congress, many companies are looking to decouple from China, but it’s a slow process. For instance, Tata’s shift from Singur to Sanand took a year to set up the factory and another year to train skilled manpower for specific company needs.
Every company has unique requirements for their workforce, and while institutions provide general training, each company must train employees to fit their specific operational culture. This takes time and is a challenge that needs addressing.
Additionally, existing global powers are wary of rising powers like India, fearing a loss of their economic dominance. Instead of direct conflict, they use geo-economic tactics to weaken rising powers. Thus, our internal security and military apparatus must be prepared to counter these multi-domain threats.
Maj Gen Ashok Kumar:
Thank you, sir. You’ve covered both national and international dimensions. Now, what are the specific challenges in military maintenance? What lessons can we learn from this, especially for the defense fraternity and industries like MSMEs and aerospace?
Maj Gen Rajiv Narayanan:
I’ll share an anecdote from my experience commanding a unit in mountainous terrain where disruptions were frequent. Initially, as the deputy and later as the GOC, we identified fast-moving, slow-moving, and critical spares.
We used the extensive dealership network available and integrated the TSS (Technical Store Section) of the workshop into the dealer grid. We created our own software with the help of signals to link all workshops. Fast-moving and slow-moving spares were barcoded, allowing us to track availability in real-time. This system worked well, reducing downtime and the need for excessive spare holdings.
In contrast to civilian franchise networks where each product type has a separate franchisee, military workshops handle multiple equipment types. Availability of spares and reduced downtime are crucial for operational readiness and combat power.
Our traditional procurement system is outdated. By leveraging technology and collaboration with civil industry, we achieved significant improvements. Credit also goes to my colleague, late Colonel Vinay Gupta of the EME, whose acceptance and efforts were instrumental in this success.
Maj Gen Ashok Kumar:
Thank you, sir. Your personal experience demonstrates how adopting technology and collaborating with the civil industry can overcome antiquated systems and enhance military maintenance efficiency.
That’s very encouraging to know, sir. In fact, with the technology and ecosystem currently being created in the country to partner with the private sector, we have tremendous capabilities. If we collect this with a forward-thinking mentality, we can foresee many efficient changes to ensure quality equipment is available to users, allowing them to prosecute wars without restraint on that count. While you’ve highlighted certain challenges and ways to overcome them, can you suggest some additional recommendations on how we may move forward?
Maj Gen Rajiv Narayanan:
Yes, certainly. First, I’ll address the military portion, and then the overall OEM MRO setup in the country.
There are two critical things:
1. Private entities from whom we procure equipment are very forthcoming. They can easily identify all the ancillaries and know where these parts are coming from. They don’t need to procure the spares directly from the OEM; they can tap into their ancillaries.
2. This is a big challenge for the Ordnance factories and DPSUs because they don’t share this information.
When we look at MRO, we must reach out to the OEMs who ask us to provide this ecosystem. Let’s create an ecosystem for MRO so they share all the technology and, if any SMEs are required to make those spares, they share them with us. This becomes a stepping stone.
We are also working to bring their R&D here. Some OEMs have expressed interest in establishing their R&D here. When we have a trustworthy and dependable MRO facility, it sustains the model and increases trust. More OEMs will want to come here because it becomes economically viable to function from here. We should expand the ancillaries, especially with like-minded countries in the region. We must be careful in selecting our partners, which will help India become economically strong and self-reliant.
Maj Gen Ashok Kumar:
You have highlighted the international landscape, emphasizing India’s strategic location in the Indian Ocean region and its huge potential. Considering this, goal-setting is essential for concentrated efforts. What goals should we set in this direction?
Maj Gen Rajiv Narayanan:
Firstly, we need to make people aware. As awareness increases, decision-makers will recognize the ongoing efforts. For a phased approach, start with making MRO a success, then R&D, and eventually OEMs, leading to India becoming a major manufacturing hub in the global supply chain.
With the war in Ukraine, many Soviet-era and Russian equipment users are looking towards India for sustenance, as Russia cannot provide it due to their involvement in the war. This is an opportunity we cannot afford to miss or spoil. By providing a trustworthy MRO cover, we establish our capability and potential.
Step-by-step:
1. Make MRO a success.
2. Bring in R&D.
3. Attract more OEMs.
4. Become a manufacturing hub.
MRO Channel Forum can play a crucial role by selecting good themes and progressing with discussions involving not just uniformed personnel but also economists, business houses, and experts from management institutions. A panel discussion with varied perspectives can lead to significant learning and effective problem-solving.
Eventually, we should involve Niti Aayog, FICCI, and other influential bodies to reach decision-makers. We aim to make a mark as a panel that discusses live issues and grasps opportunities for Atmanirbhar Bharat.
Maj Gen Ashok Kumar:
Thank you very much, sir. Today, although the subject was MRO and comprehensive national power, the canvas you covered was vast. You highlighted practical experiences from both the military domain and global perspectives. I am sure the readers will gain valuable insights. As a primary member of the MRO Channel Forum, you have provided important guidance on leveraging this platform for the larger good of this subject and the country. Thank you very much for your time.
Maj Gen Rajiv Narayanan:
I interact with students, and when I say MRO, they look lost. I am sure with these inputs, the actual stakeholders and future stakeholders will be more knowledgeable on these issues.
Maj Gen Ashok Kumar:
Thank you very much, sir. We have highlighted the MRO and comprehensive national power and will continue to bring more such themes and deliberations in the future.
