WION Edit: India's defence manufacturing gaps

India aspires to become a global power and for that, India must have a modern military force, among other things. India buys a bulk of its defence equipment and there is urgent need to make it domestically.

So, there's a market, there's demand, there's a push from the government and India has the technological know-how, then why hasn't Make in India made a difference?

Last year, Former Army Chief General VP Malik - the man who led the Indian Army during the Kargil war spoke about it. And he made a strong case for making defence equipment in India.

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He said that unless India becomes adequately self-reliant in defence, our national security remains vulnerable.

So, why has India's domestic arms industry not flourished?

For the longest time, defence manufacturing in India was in the hands of state-owned companies. Private players were allowed only in 2001. A report from 2019 says that even today, bulk of the business goes to the public sector units.

Last year, the annual turnover of private sector companies was close to Rs 15 thousand crores. Public sector units earned more than four times this figure. Their turnover was well over Rs 60 thousand crores.

But, the Armed Forces have not had good experiences working with India's Defence PSUs. They give three reasons:

First, professionalism, or the lack of it. Second, delays in deliveries, and third, overshooting the budget.

Let's take the case of HAL, it had the exclusive rights to manufacture foreign jets in India. Last year, the Indian Air Force told the government that production delays are impacting its combat strength, particularly, when it comes to the Mirage 2000 and Jaguar Fighter fleets that were undergoing upgrades.

The IAF pointed out delays, ranging from two to six years. As a result, costs have also gone up. Furthermore, India lacks the talent to develop futuristic weapons.

Research and Development is still restricted to government agencies like DRDO. So, the Defence Forces have little choice and they have to resort to off the shelf purchases.

All the major contracts the Narendra Modi government has signed have been off the shelf. There has been no transfer of technology, this includes 36 Rafale jets from France, the S400 Missile Defence system from Russia, and the Apache and Chinook from the US.

Although, the government should be given credit where it's due. Some major bottlenecks for the entry of the private sector have been removed under the Modi government, like - increasing the FDI cap, easing licensing conditions and reduced time frame for obtaining defence exports approvals.

Several private players have entered the market - Adani Defence and Aerospace, Tata Advanced Systems, Bharat Forge and Mahindra and Mahindra. They have all tied up with foreign Defence manufacturing firms.

But as of last year, some deals were yet to be finalised, a few have even hit dead ends or have been cancelled.

The private sector hasn't really been able to graduate from making small components to creating full-blown systems.

First of all, finalise the pending deals. Second, invest more in defence research and development. Third, encourage private players and startups to build indigenous offerings. And fourth, push for weapons imports that come with a technology transfer.

This will boost India's know-how in defence manufacturing.

Another major concern is the budget. India might not have enough money to clear big-ticket purchases. This is where the Defence Forces must consider deeper integration of resources and talent and open up some room in the budget.

The appointment of the Chief of Defence staff is a step in that direction. The more immediate concern is the pending defence procurement. Public-private partnerships must be encouraged to complete priority purchases.

Delaying the development of India's defence manufacturing not just makes our imports bills bigger, it even forces the Armed Forces, bureaucrats and the government to make compromises with national security.

(Disclaimer: WION Edit is the channel's take on the big events of the world)