NEW DELHI — Under a new policy, at least half of India’s total weapon
and equipment needs in the next 10 to 12 years — worth more than $100
billion — could be produced domestically.
Analysts and military
officers are divided about the wisdom of relying so heavily on the local
defense industry to meet the military’s needs quickly and effectively. The
new approach, announced this month, is based on a countrywide “Make in
India” campaign launched by Prime Minister Narendra Modi to boost the
domestic industry, a source in the Defence Ministry said.
Under the new policy, the categories of Make India and Buy and Make India will be used for about half the weapon purchases. Under these categories, tenders will go only to domestic industry.
“The new policy will be one step forward and two steps backwards as the domestic defense industry is not mature enough to meet such big orders for weaponry and equipment, and depending on it will only result in further delays in acquiring weapons for our defense forces,” said Nitin Mehta, a defense analyst here. “How can a defense industry which exports weapons worth only $100 million a year suddenly balloon to manufacture weapons and equipment worth nearly $100 billion in the next 10 years?”
A senior Defence Ministry official said India’s defense industry has the potential to produce submarines, warships and high-tech weaponry, and that the percentage of imported Indian weapons and equipment could even be reduced from the current 70 percent to 40 percent in 10 years.
“Committing orders and encouraging the domestic industry to partner with overseas defense companies on an equity sharing basis or through a consortium approach will be the new way procurement of weapons will be done in future,” the official said. An executive with private-sector defense major Larsen and Toubro defended the government’s move.
“During the past decades plus, India has been importing weapon systems under Buy [global] or Buy and Make [with transfer of technology to state-owned defense companies], which has not altered the import-vs.-domestic ratio of 70 percent imports and 30 percent [domestic],” he said. “That the national security cannot continue to be in the hands of the foreign original equipment manufacturers is long felt and must be realized.”
Defense analyst Amit Cowshish said he favors boosting domestic industry, emphasizing the urgent nature of weapons for the military. “Everything that the armed forces requires is urgent and if the assumption is that Buy and Make Indian or Make projects entail unacceptable delays, obviously these options rule themselves out.”
Analysts and military
officers are divided about the wisdom of relying so heavily on the local
defense industry to meet the military’s needs quickly and effectively. The
new approach, announced this month, is based on a countrywide “Make in
India” campaign launched by Prime Minister Narendra Modi to boost the
domestic industry, a source in the Defence Ministry said.Under the new policy, the categories of Make India and Buy and Make India will be used for about half the weapon purchases. Under these categories, tenders will go only to domestic industry.
“The new policy will be one step forward and two steps backwards as the domestic defense industry is not mature enough to meet such big orders for weaponry and equipment, and depending on it will only result in further delays in acquiring weapons for our defense forces,” said Nitin Mehta, a defense analyst here. “How can a defense industry which exports weapons worth only $100 million a year suddenly balloon to manufacture weapons and equipment worth nearly $100 billion in the next 10 years?”
A senior Defence Ministry official said India’s defense industry has the potential to produce submarines, warships and high-tech weaponry, and that the percentage of imported Indian weapons and equipment could even be reduced from the current 70 percent to 40 percent in 10 years.
“Committing orders and encouraging the domestic industry to partner with overseas defense companies on an equity sharing basis or through a consortium approach will be the new way procurement of weapons will be done in future,” the official said. An executive with private-sector defense major Larsen and Toubro defended the government’s move.
“During the past decades plus, India has been importing weapon systems under Buy [global] or Buy and Make [with transfer of technology to state-owned defense companies], which has not altered the import-vs.-domestic ratio of 70 percent imports and 30 percent [domestic],” he said. “That the national security cannot continue to be in the hands of the foreign original equipment manufacturers is long felt and must be realized.”
Defense analyst Amit Cowshish said he favors boosting domestic industry, emphasizing the urgent nature of weapons for the military. “Everything that the armed forces requires is urgent and if the assumption is that Buy and Make Indian or Make projects entail unacceptable delays, obviously these options rule themselves out.”
But because top officers with the defense forces are represented during the procurement process, “it is, therefore, inconceivable that a proposal would get categorized as Buy and Make or Make if the services, as users, do not support such categorization,” he said.
Vivek Rae, former director general (acquisition) in the MoD, said, “Most weapon systems and platforms would need to be imported in the foreseeable future. There is no short-term fix in the quest for indigenization. Make India projects should focus on key futuristic technologies and not on low-tech areas.”
Cancellation of Global Tenders ::
Since August, MoD has canceled two global light utility helicopter (LUH) projects, one for the Air Force and the other for the Navy, and sent a request for information (RFI) to domestic companies to determine interest in producing the helicopters. However, none of the private-sector defense companies — which have no experience in manufacturing military helicopters — has been able to forge partnerships with any overseas company to compete for the LUH order.
Under the Make India category, domestic companies are allowed individually or in a consortium to design, develop and produce weapon systems in which the government contributes up to 80 percent of the funds in the design stage.
The Future Infantry Combat Vehicle program, worth $12
billion, and the Tactical Communication System program, worth $2
billion, are the two projects designated in the Make India category, but
have yet to take off.So far, no big-ticket defense projects have been executed in the Buy and Make India category.
Rahul Bhonsle, retired Indian Army brigadier general and defense analyst, said, “Categorization has to be done based on the capabilities of the domestic defense industry and not arbitrarily. Moreover, the primary aim of the defense procurement procedure is to ensure that the armed forces capacity building remains on stream.”
“The sudden turn towards the domestic companies with RFIs worth billions is unlikely to turn into production, and the Indian defense forces will suffer,” said an Army official.
In the past year, MoD has issued more than a dozen RFIs to domestic industry worth $15 billion and sought participation in numerous high-tech projects. But the domestic industry has no experience in manufacturing such systems, the MoD source said.
However, Rajinder Bhatia, CEO of private-sector defense company Bharat Forge, said, “Indian industry has responded to a large number of RFIs.”
He added, “Make India programs should be for high-tech projects only. Rest of the procurement should be either Buy Indian Or Buy and Make Indian.” A serving Air Force officer said that relying on only domestic sources under a fixed policy will lead to undue delays in acquisition of weaponry affecting the combat worthiness of the defense forces.
Modi's Resolve to arm India to the teeth ::
India, the second most populous nation in the world, is in the midst of a $100-billion defense upgrade program. In August, Modi urged India to build up its military might to the point that no other country "dare cast an evil eye" on the South Asian nation. He also said that India had to stop relying heavily on defense imports and focus instead on local research, design and manufacture.
Modi's new government has raised the foreign investment cap on India's defense industries to speed up modernisation of the military. India has fought three wars with nuclear-armed rival Pakistan, two of them over the disputed Himalayan territory of Kashmir. The country has also been seeking to shore up its defensce capabilities to counter a military build-up by an increasingly assertive China.
0 Comments