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Indigenization has to be a core strategic policy for India

Saurav Jha @SJha1618

Updated: September 28, 2015, 11:33 PM IST
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In its first budget presented last year, the new Narendra Modi led NDA government substantially increased the allocation for the Defence Research and Development Organization (DRDO) and has more or less maintained that heightened level of spending in this year’s budget as well. This is a signal that the Modi government accepts that defence R&D in India had thus far been characterized by decades of underinvestment leading to a shortage of manpower and a dearth of critical testing facilities. Concurrently, it has also made aerospace and defence (A&D) a pillar of the 'Make in India' program recognizing the need to increase India's supplier base in this domain. Besides pushing for much greater domestic private sector participation it is also open to attracting 'FDI in defence' for that purpose. So clearly, military hardware indigenization has been adopted as a strategic imperative and the government seems to be proceeding on a twin track of pushing domestic R&D while simultaneously augmenting India’s manufacturing base for defence equipment. This is a wise course of action since both paths reinforce each other. However to ensure the political sustainability of this process it is important to foreground indigenization as a national ideological pursuit.

Among the three pillars of the non-alignment movement, it was actually the erstwhile Yugoslavia under Tito that put the greatest emphasis on indigenization and his country emerged as a remarkable player in the area of conventional armaments in the post-WW2 period. Tito understood that true 'non-alignment' could only be pursued with as little dependence as possible on foreign powers for armaments. Nasser’s Egypt and Nehru’s India unfortunately did not and could not pursue indigenization with similar zeal. Post-1962, India ended up becoming heavily dependent on the Soviets once the Americans turned down Nehru’s request for F-104 Starfighters and the era of license production in India began with Hindustan Aeronautics Limited (HAL) commencing domestic manufacture of the Mig-21 in the mid-1960s. While license production has yielded certain benefits to India it has also calibrated India in the aerospace sector and induced a tendency in the defence public sector units (PSUs) and indeed in the military towards dependency on foreign technology besides the usual inefficiency issues that plague PSUs unless specifically addressed.

After all, as the T-90 production experience shows, transplanting a foreign design conceived in a different industrial eco-system, not to mention under a different doctrinal environment is never easy to do and keeps the importing country dependent on the foreign supplier for maintenance support, thereby curbing strategic autonomy. Mere diversification of sources of foreign technology does not address the dependency issue substantively while creating a diversity of types that can be a headache to operate and maintain. Fortunately however, thanks to Homi J Bhabha and his magnificent obsessions, India was successful in developing nuclear weapons, something that Yugoslavia failed to do. Indeed, I strongly feel the West would have found it quite impossible to 'balkanize' Yugoslavia had it managed to go nuclear.

Now while India need no longer call it 'non-alignment', to burnish its place as one of the major poles of the newly emergent world order, it needs to indigenize its military hardware pool. Whether it be to win the ‘war on jobs’, or to increase the overall technological capability of its economy (a must for winning future ‘wars for jobs’), or to ensure unfettered energy security for its current economy, or to have an area of influence through military exports, or indeed to shape global trends autonomously, it simply cannot let its national budget leak into the hands of foreign players year after year through military imports.

Thanks to our strategic missile programs, where DRDO has clearly delivered, India does have key private players in the A&D space in addition to over a thousand small and medium players also participating. And it is not just strategic missiles, today almost Rs 180,000 crore worth of (non-strategic) DRDO developed equipment has either been delivered or is in various stages of production in India. A lot of this quantum actually comes from radar, sonar and other electronic warfare equipment all of which shouldn’t be imported at all on account of operational security considerations. Essentially, many thresholds have today been crossed and it is time to order what has already been developed in substantial numbers to bring about economies of scale and increase private sector participation in defence. The usual lament about a certain indigenously developed system having high import content can easily be addressed through better minimum order quantities.

After all, the 'system level' intellectual property (IP) which is what really counts in the hi-tech space resides in India for a domestically developed A&D product enabling much easier modification of the design with new sub-systems. The way forward therefore is to facilitate the creation of greater domestic IP by supporting a DRDO that serves as an anchor for both public and private sector entities and has the requisite resources to recruit the fresh young talent it needs. Indeed, Prime Minister Modi’s suggestion of five laboratories headed by young scientists is important especially in light of developing technology for the new cyber, space and special forces joint commands being progressed by the military. Similarly, the process for seeding centres of excellence focused on defence technology with DRDO handholding in places like the IITs has also begun.

Now while Swadeshi needs to be backed to the hilt with a clear focus on domestic R&D and larger orders for domestic equipment through a spiral development approach, Videshi too can be leveraged for the faster growth of India's A&D space. Indian companies have already been given the leeway to partner with foreign players while bidding for specific projects. Moreover foreign A&D players can also be attracted for building key sub-systems such as low-bypass turbofan jet engines domestically by showing them the sheer size of Indian orders. Indeed, discussions on precisely these lines are currently being progressed under the aegis of the Defence Trade and Technology Initiative (DTTI) between India and the United States, given that India’s light combat aircraft (LCA) already uses a General Electric engine. The LCA's MK-2 variant will also be eminently exportable to a host of South East Asian and African countries and in these markets it would be competing with the China-Pakistan JF-17 Thunder which is powered by a Russian engine. So ironically, while the Sino-Pak axis will offer a combat jet powered by a Russian turbofan, India could offer the LCA as competition whilst using an American engine.

Nevertheless, even as India follows a multi-pronged path for 'Make in India', the mindset must be firmly towards building domestic products. In any case domestic R&D has proved to be the only way to absorb foreign transfer of technology as the indigenization of the T-90’s gun barrel shows. This is something that both China and South Korea have understood for a long time. In order to create an eco-system where there is a decided focus on Indian A&D products, the national psychological sphere must take pride in what is being done in India and understand the importance of Indian brand value. For that indigenization needs to be pursued as nothing short of an ideology.
First Published: September 28, 2015, 11:33 PM IST

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