ENHANCED ROLE OF DOMESTIC DEFENCE MANUFACTURERS IN INDIA
Production of defence equipment with modern technological trends has always been a challenge for most of the countries in the world. This has resulted in the majority of the nations in the world importing the defence equipment to meet their domestic defence needs. The defence industry has become so lucrative in export oriented countries that they hold lot of say in foreign policy of the country concerned. Not only this, there have been instances in the world wherein the export oriented countries related to defence equipments have been instrumental in initiating / prolonging a conflict so that their market of defence exports remains always vibrant . Russia – Ukraine war could also be such a case as being reported by some media platforms .
Be that what it may ,it is essential for any country to be largely self reliant in the defence domain. It is therefore essential that defence manufacturing be patronised if a country wants to become self-reliant. This is more so for a country like India which has two nuclear armed adversaries like China and Pakistan sharing its land borders that too with lot of active disputes on the border. Both these adversaries have in their possession Indian land – with Pakistan in form ot POK while Aksai chin is with China besides some other areas in other locations.
Though a little late, India has embarked on the path of indigenisation. It is therefore important that defence manufacturing by domestic industries be patronized by the Government of the day to meet its own defence needs as well as exporting these products to friendly foreign countries in the world.
While the Government is largely moving in the said direction, there are numerous areas where it requires to do more hand holding, undertake process simplification and set targets which could be achievable despite being ambitious .There is a serious need to understand and appreciate the enhanced role of defence manufacturers in India for making the country self reliant in this field. Some steps needed are as under :
Parameters of Acceptance. There may be cases wherein the domestic defence manufactures may not be able to produce the best defence equipment as available in the world market at this stage and it is therefore required to be upfront stated that the defence forces of the country will accept all the equipments of domestic manufacturers even if they are graded 7 or more on a scale wherein the best in the market is graded 10 on this Scale. Need of a formal agency to adjudicate and upfront commitment by all the stake holders for this is essential for all the equipments which are ‘in service’ but are of import ‘origin’. This will help to build up confidence in the domestic defence manufacturers.
Purchase from Domestic Defence Manufacture. Unlike the market of FMCG products, defence manufacturers can sell their products only to the Government organs. It is therefore important that the Government patronizes the domestic manufacturers. It was a welcome announcement in the budget presented in Feb 22 to make purchases from domestic manufacturers minimum being 68 percent which was earlier 58%. When the budget was announced on 01 Feb 23 in the recent past, it was expected to be raised beyond 68 percent, however, it did not happen. The Government has now taken it to 75 percent post budget which is a very welcome move. It is however, more important to objectively assess as to what has been the quantum of the real purchase from the domestic defence manufacturers. It is also important that this percentage to be meaningful, it must be related to indigenous products. If the interpretation is related to Indian defence manufactures including imported equipment/assemblies / components by them, the basic purpose will be defeated. While speaking in GIS23 in Lucknow ,Hon’ble RM announced that the Government is considering to enhance the percentage of procurement from 68 percent (which has now been done) but he also cautioned that the practice of importing and then branding this product under this category must stop. It is therefore essential for the government to factually state as to what percentage of defence purchase in capital procurement has been done from the domestic manufacturer in FY 21-22 and FY 22-23. An objective assessment will be key to the evolution of future pragmatic measures even if we have fallen short of our stated objectives.
Transfer of Technology (TOT). During GIS 23 at Lucknow , the Hon’ble RM also emphasized that there is no advantage of grinding the already grinded wheat and therefore TOT whether with Government, DRDOs or PSUs will be transferred to the domestic manufacturers ‘free of cost’. While the announcement is a welcome sign but it will be worthwhile to see if the same is available to the private manufactures ‘free of cost’ in a simple and transparent manner. It will be a very positive change if what is stated, can be achieved.
Indigenisation Lists. The Government has come out with four indigenisation lists wherein the first two lists cover the duration of four years, the third covers the duration of five years and the fourth one covers the duration of 10 years. The duration is supposedly based on the type of equipment being banned for imports and each item has given its own timeline. It is obvious that due diligence would have been done while including the items in these lists including the timeline for banning the imports . It appears that more diligence is needed on these lists as well as those which may come up later as the timelines have already started slipping. In addition to the inputs from the service HQs, DRDO, PSUs, the MOD should co-opt inputs from the domestic defence manufacturers as well as only then the timelines set forth will be possible to be achieved. A fresh re-appraisal should be undertaken without any further delay.
There are other major concerns which need to be addressed to realise the enhanced potential of the domestic defence manufacturers in India to translate this thought of indigenisation into reality .Third party quality audit certification and allocation of testing facilities as well as Ranges with defence forces must be looked into . The need is not only making the provision but it must be simple, transparent and low cost/ no cost as the case may be. India has the potential to extend its shoulder not only to meet its own defence needs but also of those who are our friendly countries.
This article has been first published in Sunday Guardian.
