Time for an indigenous arms industry

Union Defence Minister Manohar Parrikar and U.S. Defence Secretary Ashton Carter signed the 10-year Defence Trade and Technology Initiative in early June, to extend defence cooperation between the two countries. The move has been hailed as “path-breaking”, but in reality the agreements on joint technology development are far below expectations. In fact, to expect any country to share cutting-edge defence technology would be gross naivety. As the Narendra Modi government enters its second year, it’s time to map the challenges facing it in the defence sector.

 There is no choice for India but to go Indian. Results will only flow if cogent policies drive decision-making, even as field work continues. With 250 million people on either side of the poverty line, the defence budget has rarely crossed 2 per cent of the GDP, and it is doubtful if it ever will. To make optimal use of the scarce money, the Ministry of Defence’s (MoD) task is cut out along two avenues: operational and administrative.

Operationally, two basic issues require immediate consideration. First, the Defence Procurement Procedure (DPP) has to be urgently revamped, to address the “hollowness” of the forces (as one Chief put it). Second, the Defence Offsets Management Wing (DOMW) must be strengthened immediately. Even as the security environment has palpably deteriorated, the defence acquisition process has failed to get India out of the arms import trap.

The Defence Research and Development Organisation’s efforts have been embarrassingly poor. The reality is that India will continue to import for the next two decades. These frightfully expensive acquisitions need leveraging through the DPP and DOMW to ramp up Research and Development and manufacturing capabilities. The phrase ‘in war there is no prize for runner-up’ might be a cliché but unfortunately never truer, as ‘victory’ and ‘defeat’ have acquired new definitions. Vietnam, Iraq and Afghanistan have shown that these terms have a contextual hue, and considering that India’s future wars will be short and sharp, time and intensity are also keyfactors.

State of arms
India’s acquisition process must enable an indigenous defence manufacturing base that delivers on quality, timeliness of supply, and capacity

1. India has the third-largest armed force in the world.
2. India is one of the largest importers of conventional defence equipment and spends about 40 per cent of its defence budget on capital acquisitions.
3. About 60 per cent of its defence requirements are met through imports.
4. The allocation for defence in the last budge was approximately Rs. 2.4 crore.
5. In 2015, the budgetary allocation for defence was Rs. 2.6 crore, an increase of over 7 per cent.

 Our defence procurements need to address these complexities, and if a confrontation drags on, the nation must have the ‘strategic depth’ of a continuous supply chain, which only an indigenous arms industry can ensure. So, India’s acquisition process must become the enabler of an indigenous defence manufacturing base that delivers on quality, timeliness and capacity.

Achilles heel

India’s acquisition hierarchy, however, has an Achilles heel in the absence of a structure that ‘owns’ the acquisition process. Thus, targets, responsibility and accountability cannot be fixed. The Department of Defence Production, Director-General (Acquisition), and the MoD are amorphous behemoths; no responsibility can be pinned on any one of them.

What happens elsewhere? The U.S. set up a Defence Acquisition Corps when it realised that its acquisition system had been “managed and over-reformed into impotence with volumes of oversight regulations,” as a defence historian put it. Doesn’t that sound familiar? The U.K. ensures continuity, and hence accountability, through an integral civil services permanent cadre in its MoD. India has deputationists and part-timers who come and go from any Ministry, with no attachment to the ‘spirit of indigenisation’.

Any reform of the DPP has to start with the creation of an entity that ‘owns’ the acquisition process. This entity should have officers of all departments influencing defence indigenisation and must work under one head, who will oversee the process of drafting policy and implementation. The careers of personnel in this organisation should swim or sink with the progress of defence indigenisation. Naysayers just need to look at the Telecom Regulatory Authority of India to understand that creating such an entity is possible.

DOMW augmentation

The immediate reform of the DOMW is the second major requirement. With offsets still a norm, the nation has paid at least 10 to 15 per cent more in each contract as a cost of offsets. The 36 Rafales that are coming from France have a $4 billion offset estimate, while the total estimate in the next decade could reach $100 billion! To manage such massive amounts, there are only 10 people manning the DOMW today. The staff needs to be immediately expanded and must be given a fixed tenure of at least five years. In parallel, training in defence acquisition needs to be institutionalised through the upcoming National Defence University.

Pride in uniform is the mantra that gives the armed forces josh. It’s time this lost sheen was restored to them. In its second year in office, the government must work on the administrative aspects of defence building. The nation expects the armed forces to deliver everywhere. Surely, the government can respond with correct pay, housing and ‘one rank one pension’ policies?

(Manmohan Bahadur, a retired Air Vice-Marshal, is a Distinguished Fellow at the Centre for Air Power Studies, New Delhi).
Source: thehindu.com