By MAJ GEN (DR) RS MANN (RETD)
Preamble
- India’s quest for self-reliance in military hardware has been underway for more than three decades now. While numerous committees have been formed over the years to examine the issue and recommend the way forward and incremental measures have been introduced from time to time, it is only recently that the MOD is in mission mode to achieve a transformation in the Indian military Industrial complex. The adverse effects of the Russia – Ukraine war on the delivery of equipment and spares from Russia as well on global supply chains, has highlighted the urgency of this transformation, especially in light of the tensions on our northern borders. Towards this end various measures have been implemented, primarily by way of procurement policies focused on indigenous products, discouragement of imports, rationalization of tax structures to provide a level playing field to all players private or public, encouragement of exports, incentives for SMEs/MSMEs, funding for defence innovations, streamlining of acquisition procedures including defence offsets, to name a few. The key agent for these changes has been the Defence Acquisition Procedure 2020 (DAP 2020). It is however appropriate at this stage to assess the adequacy of these measures and identify what more can be done.
Intent
2. Many nations have developed their defence industrial bases to global standards in the 20th Century. To draw lessons from these endeavours, it is intended to examine the experience of different nations since world war 1, as the challenges and pathways essentially remain the same. Thus the case of Germany post World War 1, the Soviet Union post World War II, and more recently, Israel, China and South Korea is worthy of examination.
3. Germany. After World War I ended in November 1918 with its defeat, Germany’s military production was severely restricted and it was forced to disarm under the terms of the Treaty of Versailles. However, with Hitler’s rise in the late 1920s, the German government began to secretly build up its military capabilities, despite the restrictions placed upon it. Thus, in less than 10 years Germany developed its armed forces into the most formidable war machine in Europe, fielding the best tanks, fighters, Naval ships and submarines and artillery guns amongst the adversaries, and in large numbers. Just to give prespective, Germany manufactured 4,733 fighters and 3562 other aircrafts in 1939. Annual production of tanks peaked at 5964 tanks by 1945. They developed the first V2 liquid propelled rocket which was used effectively in the Battle of Britian. Here are some key factors that contributed to the rapid rejuvenation of the German military industry:
a. Strategic planning: The Nazi government recognized the importance of scientific and technological development for building a strong military. It implemented policies such as centralized research institutions and funding for military-related research to attract talented scientists and engineers.
b. An essential element that assisted Germany in developing its military industry so rapidly, was the establishment of the German War Ministry’s Weapons Office (Heereswaffenamt) in 1922. This organization was responsible for overseeing the development and production of military equipment and weapons. It employed many experienced engineers and scientists who had previously worked on military projects during World War I and paid them handsomely.
c. The Nazi government also took advantage of the political situation in Europe during the 1930s to attract scientists and engineers who were fleeing persecution in other countries. Many of these refugees were highly skilled and experienced, and their expertise was instrumental in the development of new military technology.
d. Industrial infrastructure: To build the industrial infrastructure necessary for producing military equipment in such large numbers, the Nazi government used a combination of government control and private enterprise. Germany underwent a significant industrialization process during the 1930s and the government invested heavily in military-related industries, such as steel production and armaments manufacturing. It established state-owned enterprises and took over existing industries, giving the government greater control over production and allocation of resources. The Nazis also implemented a series of economic policies that increased efficiency and productivity in the German economy, allowing for greater output from the military industry.
e. Raw materials: To obtain the raw materials necessary for manufacturing military equipment in such large numbers, the Nazi government implemented policies such as import substitution, where domestic production was increased to replace imported goods. The government also seized control of resource-rich territories, such as Austria and Czechoslovakia, which provided access to key resources such as Copper, oil, coal and iron ore.
f. Technological advancements: Given adequate resources and incentives, German engineers and scientists made significant advancements in military technology, such as the development of the Messerschmitt Bf 109 fighter plane and the Tiger tank, which gave the German military a technological advantage over their opponents.
g. Government incentives: The Nazi government offered significant financial incentives to scientists and engineers who were willing to work on military-related research projects. These incentives included high salaries, generous research budgets, and access to state-of-the-art research facilities.
h. Collaboration with industry: The Nazi government worked closely with the private sector, particularly in the arms industry, to develop new military technology. This collaboration provided scientists and engineers with access to cutting-edge research facilities and equipment, as well as opportunities for collaboration with other experts in their field.
In summary, the Nazi government used a combination of strategic planning, government incentives, propaganda, collaboration with industry, and exploitation of the political situation to attract and retain scientists and engineers to develop new technology in arms after World War I. These efforts were instrumental in the rapid development of new military technology, which contributed to Germany’s military strength in the lead-up to World War II.
4. The Soviet Union. After the end of World War II, the Soviet Union focused on rebuilding and expanding its military industry to ensure its security and maintain its status as a world superpower. Given below are some key factors that contributed to the Soviet Union’s buildup of its military industry after World War II:
a. Government incentives: The Soviet government offered significant financial incentives to scientists and engineers who were willing to work on military-related research projects. These incentives included high salaries, generous research budgets, and access to state-of-the-art research facilities.
b. Centralized planning and manufacture: The Soviet government implemented centralized planning, which allowed it to direct resources towards military-related research and development. They also established large state run arms manufacturing complexes. This approach ensured that the country’s limited resources were used efficiently and effectively, and that research efforts were focused on key priorities.
c. State-controlled research institutions: The Soviet government established state-controlled research institutions, such as the Institute of Atomic Energy and the Institute of Nuclear Physics, which provided scientists and engineers with access to cutting-edge research facilities and equipment. These institutions were also tasked with developing new military technology, which helped to attract and retain talented researchers.
d. Human Resource. The Soviet Union brought in qualified scientists and engineers from outside to develop military technology after World War II. The Soviet Union’s recruitment of German scientists and engineers, who were brought to the Soviet Union as part of Operation Osoaviakhim after world war II, under direction of Soviet intelligence agencies, is well known. They used a combination of incentives and coercion to recruit German scientists and engineers. They were offered attractive salaries, housing, and other incentives, as well as the promise of protection from prosecution for war crimes. These German scientists and engineers were instrumental in the development of rocket technology, jet engines, and other advanced weapons systems. In addition to recruiting German scientists and engineers, the Soviet Union also brought in experts from other countries to work on military-related projects. For example, the Soviet Union recruited nuclear physicists from the United States and other countries to work on the country’s nuclear weapons program.
e. Education system: The Soviet government also invested heavily in the education system, which helped to develop a highly skilled workforce. The country’s education system emphasized science and technology, and provided students with the skills and knowledge needed to work in research, development and large scale manufacture.
f. Raw material: The Warsaw bloc controlled by the Soviet Union gave it access to large parts of resource rich Eastern Europe and Central Asian nations. It rapidly established facilities to efficiently extract and provide the raw materials needed by its massive state controlled arms manufacturing establishments. At the peak of the cold war, USSR was manufacturing 1500 tanks annually in 1985. The occupation of eastern Ukraine by Russia is also to enable access its rich deposits of minerals and rare earths,
g. In summary, the Soviet government used a combination of government incentives, centralized planning, state-controlled research institutions, investment in the education system, and collaborations and incentives to attract and retain scientists and engineers to develop new technology in arms after World War II. These efforts were instrumental in the rapid development of new military technology, which contributed to the Soviet Union’s military strength during the Cold War.
5. Israel. After gaining independence in 1948, Israel faced significant security challenges due to hostile neighbors and major arms embargoes. As a result, Israel began to develop its military industry to meet its security needs through a well thought out strategy. Israeli Military Industries (IMI) was established in 1933 as a clandestine arms manufacturer and became the foundation of Israel’s defence industry. Bedek Aviation Company which later became IAI, was formed in the 1950’s and it focused on aircraft maintenance and repair. Similarly, RAFAEL was also founded in 1952 for development of missiles and other advanced systems. From this start, Israel’s defence industry today ranks among the world’s top exporters, with annual sales exceeding $7 billion. Its defence industry’s success stems from its unique blend of innovation, adaptability and strategic partnerships, driven by the necessity of self-reliance in a challenging regional environment.
Here are some key factors that contributed to the development of Israel’s military industry from scratch:
a. Government investment: The Israeli government invested heavily in the arms industry, providing funding and incentives for the development of new military technologies. This included the establishment of state-owned enterprises and research institutions, as well as subsidies for private companies.
b. Technological innovation: Israel’s arms industry relied heavily on technological innovation. Israeli scientists and engineers developed cutting-edge technologies such as the Iron Dome missile defense system and the Merkava tank. Significant defence technologies were transferred from the US to Israel through defence offsets.
c. Strategic alliances: Israel formed strategic alliances with other countries, particularly the United States, which provided access to advanced military technologies and expertise. The United States also provided significant financial and political support to Israel, which helped to fund the development of the country’s arms industry.
d. Exploitation of human capital: Israel’s arms industry also benefited from the country’s highly educated workforce. Israel has a strong tradition of education and a high percentage of the population holds advanced degrees in fields such as engineering and computer science. This has helped to develop a skilled and innovative workforce that is well-suited to the development of advanced military technologies.
f. Technological innovation: The Israeli military industry relied heavily on technological innovation to reduce the need for raw materials. For example, Israel developed lightweight composite materials to replace heavy metals in military equipment, which reduced the need for raw materials.
g. Strategic partnerships: Israel formed strategic partnerships with other countries to obtain raw materials needed for the military industry. For example, Israel formed a partnership with South Africa during the apartheid era, which allowed it to obtain materials such as uranium for its nuclear program.
h. Attracting Global Specialists. Israel brought in qualified scientists and engineers from US and Europe to work in its high-tech industries, including the military industry. One of the most famous examples of this was the recruitment of Israeli scientists and engineers who had worked on the Manhattan Project, the U.S. government’s program to develop the atomic bomb during World War II. Many of these scientists and engineers were Jewish, and they were attracted to Israel’s scientific and technological innovation and its commitment to national security. Israel also established partnerships with universities and research institutions around the world to facilitate the exchange of knowledge and expertise. For example, the Technion – Israel Institute of Technology has partnerships with universities and research institutions in the United States, Europe, and Asia, which allows for collaboration and the sharing of ideas and technology. Furthermore, Israel has also established specialized programs to attract scientists and engineers to work in the country’s military industry. An example of this is Israel’s Defense Ministry program called “Brain Gain,” which offered financial incentives and other benefits to Israeli scientists and engineers working abroad, to encourage them to return to Israel and work in the country’s defense industry.
j. Overall, Israel’s military industry was built on a foundation of sound strategy, ingenuity, technological advancements, strategic partnerships, talent recruitment, and military modernization. These efforts helped Israel develop a strong military industry, which played a significant role in securing its borders and maintaining its security throughout the region.
6. China. China’s development of modern weapons in the modern era has been a gradual and ongoing process that has taken place over several decades. Here are some key factors that have contributed to China’s development of modern weapons from obsolete weapons:
a. Long Term Strategy. With Deng Xiaoping’s economic reforms, China opened itself to foreign investments and it soon became the manufacturing hub of the world in key sectors including IT Hardware, Communications, ICs etc, enabling dual use. It further ensured secure and stable supply of critical raw materials to fuel military modernization, and technological advancement, encouraging Chinese companies to invest in overseas mining and extraction projects in South America and Africa, strategic stockpiling, diversification and domestic exploration. The Belt and Road Initiative also facilitates access to raw materials and markets. China’s strategic raw materials strategy supports its long-term military and technological ambitions as it today has the monopoly on global supply of rare earths.
b. Strategic investment. China has made strategic investments in its defense industry, investing in research and development to develop new military technologies and modernize its existing weapons systems. This included the establishment of state-owned enterprises and research institutions, as well as subsidies for private companies.
c. Technology transfer. China has acquired foreign military technology and expertise through technology transfer and joint ventures with foreign companies. This has allowed China to quickly develop its military capabilities and improve its weapons systems.
d. Reverse engineering. China has reverse engineered Russian military technology, particularly during the 1990s and 2000s when the two countries had close military ties. Russia was a major supplier of military hardware to China during this time, including fighter jets, tanks, and missile systems. China has since developed its own domestic arms industry, but it still relies on Russian military technology for some key components, such as engines for fighter jets and helicopters. Some of the military technologies that China has reverse engineered from Russia include the Su-27 fighter jet, the S-300 air defense system, and the SA-15 missile system. China has also reverse engineered Russian tanks, including the T-72 and T-90, and developed its own domestic versions.
e. Domestic innovation. China has encouraged domestic innovation in its defense industry, fostering a culture of creativity and innovation among its researchers and engineers. This has led to the development of new military technologies and the improvement of existing ones. China’s arms industry relied heavily on technological innovation, particularly in the areas of electronics, software, and advanced materials. Chinese scientists and engineers have developed cutting-edge technologies such as stealth aircraft, anti-ship missiles, AI, robotics, communication technology and advanced radar systems amongst others.
f. Strategic partnerships. China formed a strategic partnerships with Russia, which has provided access to advanced military technologies and expertise. An example of this is the joint project to develop the Su-57 fighter jet. Russia also provided significant financial and political support to China, which helped fund the development of the country’s arms industry. These partnerships have been based on a mutual interest in developing advanced military technologies and countering the military capabilities of the United States.
g. Exploitation of human capital. China’s arms industry also benefited from the country’s highly educated workforce. China has a strong tradition of education and a large percentage of the population holds advanced degrees in fields such as engineering and computer science. This has helped to develop a skilled and innovative workforce that is well-suited to the development of advanced military technologies. China also brought in qualified scientists and engineers from outside to develop military technology. China has a long history of recruiting talented individuals from around the world to work in its high-tech industries, including the military industry. China also established partnerships with universities and research institutions around the world to facilitate the exchange of knowledge and expertise. For example, China’s Tsinghua University has partnerships with universities and research institutions in the United States, Europe, and Asia, which allows for collaboration and the sharing of ideas and technology. Furthermore, China has also established specialized programs to attract scientists and engineers to work in the country’s military industry. For example, China’s Thousand Talents Plan is a program that offers financial incentives and other benefits to foreign scientists and engineers to work in China and contribute to the country’s scientific and technological development, including in the military industry.
h. Import substitution. China also implemented import substitution policies, where domestic production was increased to replace imported goods. This approach helped to reduce the country’s dependence on imported military technologies and ensure a reliable supply of military equipment.
j. Theft of military technology. There have been allegations that China has engaged in the theft of military technology from other nations and carried out reverse engineering to develop its own military technologies. China has been accused of stealing military technology through a variety of means, including cyberattacks, industrial espionage, and the theft of intellectual property. Some of the technologies that have been alleged to have been stolen include advanced jet engines, stealth technology, and guidance systems for missiles and unmanned aerial vehicles (UAVs). These allegations have been made by several countries, including the United States and have been the subject of numerous investigations and disputes. In response, many countries have implemented measures to prevent the theft of military technology, including stricter export controls, increased cybersecurity measures, and the imposition of economic sanctions.
k. Overall, China’s development of a modern defence industrial base has been a gradual and ongoing process that has taken place through strategic investment, technology transfer, reverse engineering, domestic innovation, and military modernization. Through these efforts, China has been able to develop a robust defense industry and become a major military power on the global stage.
7. South Korea. South Korea’s development of its military industry after World War II was shaped by its experiences during the Korean War and the ongoing threat posed by North Korea. Some key factors that contributed to the development of South Korea’s military industry are given below:
a. Strategic Partnership. The United States provided significant military aid and technical assistance to South Korea during and after the Korean War to counter North Korea as well as to outflank the USSR during the cold war. This support helped South Korea rebuild its military and develop its defense industry. South Korea also established joint ventures with foreign defense companies to develop military equipment. The United States provided significant financial and political support to South Korea, which helped to fund the development of the country’s arms industry.
b. National security concerns. South Korea’s national security concerns, particularly the threat posed by North Korea, drove the development of its military industry. South Korea invested heavily in its defense industry to ensure that it had the capability to defend itself against potential adversaries.
c. Industrialization policies. South Korea’s government implemented policies to promote industrialization, which included developing the defense industry. Defence Offsets played a key role here as transfer of technologies from the US were enabled. This led to the creation of a domestic defense industry that produced a wide range of military equipment, including tanks, aircraft, and naval vessels.
d. Technological innovation. South Korea’s arms industry relied heavily on technological innovation, particularly in the areas of electronics, software, and advanced materials. Thus South Korean scientists and engineers could develop cutting-edge systems such as the K2 Black Panther main battle tank and the KF-X fighter jet.
e. Education and training programs. South Korea established education and training programs to develop a skilled workforce in the defense industry. This included establishing military academies and technical schools to train engineers and technicians. It has a strong tradition of education and a high percentage of the population holds advanced degrees in fields such as engineering and computer science. This has helped to develop a skilled and innovative workforce that is well-suited to the development of advanced military technologies.
h. Overall, South Korea’s development of its military industry after World War II was driven by its national security concerns, the support of the United States, industrialization policies, education and training programs, and strategic partnerships. These efforts helped South Korea develop a strong defense industry, which has played a significant role in maintaining its security and becoming a major player in the global defense market.
8. Summarisation. A reading of the experience of these five nations reveal some common threads.
a. Some of the nations discussed above faced adverse security situations to start with which catapulted national defence and thus defence industry into centre stage. The Soviet Union faced the Cold War, Israel had hostile Arab neighbours all around and South Korea faced an aggressive North Korea. The same is the case with India, which faces a two and half front adverse security situation by way of Pakistan, China and insurgency/ Naxal movements. A ‘whole of nation approach’ was however adopted by all these nations to develop their military industrial complexes, whereas in case of India, it has been primarily a MoD driven exercise. This is where security sectors such as Space, Nuclear, defence, AI, Semiconductors etc differ from other sectors and need a ‘whole of nation approach’. As can be seen from these examples, setting up an effective and modern defence industrial base in a defined time frame, is not ‘mission impossible’.
b. Strategic Alliances. All nations banked upon some form of strategic alliances to develop their defence industrial capacity. Despite a close security embrace with the Soviet Union in the Cold War era, and later with Russia, India was not able to leverage the same. However, the current global geostrategic environment is favourable to India, as the world converges to buttress India against the Chinese threat. This must now be leveraged to maximum effect by India using all tools of the state.
c. Clear Strategic Vision. It can be seen that a holistic approach has been adopted by all these nations. Not only did they secure the source of raw materials needed for their military industries, they also attracted talent from abroad through different routes. The Germans and Soviets attracted experts from other nations, while the Chinese and Israelis attracted qualified Chinese and Jews from all over the globe. India has an extremely qualified diaspora all over the globe which needs to be tapped. Further, it can been seen that the Chinese also exploited reverse engineering of Russian arms as well technology espionage for identified critical technologies, without concern of the fallout. India needs to develop a clear ‘all of nation’ strategic approach using multiple tools such as geo-strategic convergence with other nations, diplomacy, financial leverage to buy-out foreign firms etc – in summary a compherensive policy is needed which should address all related issues such as critical raw materials, technology, support to Indian conglomerates to go big and domestic policies encouraging a defence industrial ecosystem and nuturing human potential. There is a need to identify defence technologies that we simply must have at any cost.
d. Nuturing Human Potential. These nations had a focussed drive on generating human expertise in identified areas by their central organisations. This is a key aspect as given all the resources, the outcomes are only equal to the human resource managing it. It can be seen that India is lacking in this aspect as not only did we fail to leverage the massive arms imports and synergy with USSR/Russia of the past, as China did, even now, no apparent focus on this vital aspect is visible. Infact, India lost a unique opportunity, at the break-up of USSR, when Soviet engineers and scientists were out of work. Our inability to develop an indigenous jet engine despite decades of efforts, is a glaring example. Most defence industrial base matters continue to remain in the hands of generalists. Nor is there any talk of creating a separate cadre for this specialised job. A concerted drive is essential to nuture human resource for the defence industrial base, especially in critical areas.
e. There is a lot to learn from the experience of these nations, as they went about developing their defence industrial bases within finite periods. It must also be acknowledged that India has adopted some of the common positive steps that have emerged from an examination of these nations. These include key policy reforms, import restrictions on defence equipment, nurturing innovation in defence technology, collaborating with the Private Industry while reforming the Government owned sector, rationalisation of tax structures etc. However there are difficult measures that await action. These include pioneering a ‘whole of nation approach’ towards the defence industrial sector, defining the desirable defence industrial ecosystem in detail, establishing an overarching strategy towards defence, adopting a transformational approach towards defence structures and procedures including automation of processes, greater delegation of authority with accountability (proposals still goes through multiple levels of scrutiny and vetting which more often than not results in
contrarian views and excessive delay). While nurturing innovation in defence technology, administrative structures also need to be flexible and innovative, and eschew old mindsets. To give perspective to the problem, Indian manufactures only 20 to 30 fighter aircraft (both license production and indigenous) in a year. Similarly, 150 to 200 tanks are produced every year. This despite large deficiencies and obsolescence of these key weapons systems in the Armed Forces. One just needs to compare this with the German and Soviet outputs of WW II and the Cold War, to understand the long road ahead. Our present trajectory will not bring us anywhere near equation with China. Perhaps we are headed more towards middle level defence industrial capability like South Korea or Turkey.
This article was earlier published in the Force Magazine
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