Defexpo hobbled

Editorial: Business Standard

18th Feb 2008

There is nothing pretty in the spectacle of wealthy global defence suppliers urging developing countries to spend on exorbitantly priced weaponry, but that is what India’s premier defence exhibition, Defexpo India 08, is all about. Behind the glitzy displays, the glossy handouts emblazoned with names like Lockheed Martin and Rosoboronexport, and the easy talk about “strategic partnership” and “spreading insecurity”, is India’s failure to identify its defence needs and build up the capability to meet them cheaply and indigenously. Without a carefully debated long-term procurement vision, a process for identifying and developing key technologies, and a plan for marrying the capabilities of India’s defence public sector with the dynamism of private enterprise, the government has created a happy playground for international arms majors. 

Despite that, Defexpo India 08 echoes with complaints from both international and Indian exhibitors. They complain that the government has undermined the very purpose of a defence exhibition --- which is to put buyers in direct touch with sellers --- by failing to announce the new defence procurement and offsets rules that it has promised for over a year now. A clear set of rules are essential for substantive business to be transacted, and for a slew of non-binding MoUs between Indian and global defence companies to be translated into actual contracts. 

Instead of clearing the decks for such business by announcing policy changes at the high profile platform of Defexpo India 08, Mr AK Antony merely repeated his promise to announce the changes in April. Exasperated exhibitors --- both foreign and Indian --- are wondering aloud why Defexpo wasn’t postponed to April then. The government’s delay stems from fundamental flaws in its approach to equipping the military. South Block’s procurement philosophy rests on laying down a set of rules, which bind the military and the bureaucracy in purchasing new equipment. While good rules are useful, especially in guiding civil servants with inadequate background in defence and security, the search for watertight regulations not just delays, but often derails defence planning. Equipment procurement is an inherently subjective process, which cannot be reduced to merely buying the world’s best piece of kit from the vendor who quotes lowest. Procurement is an inherently subjective process; complicated by issues like time sensitivity, threat scenarios, equipment compatibility, and vendor reliability. Identifying the world’s best equipment is seldom important in defence planning; far more important is the subjective judgement of what is sufficient for one’s own needs. 

But that seems far beyond India’s Ministry of Defence (MoD). At an opening-day seminar at the Defexpo, the MoD had no answers to exhibitors’ requests for clarifications on taxation and policy issues. Instead a series of senior MoD officials lingered over the 2001 opening of defence production to the private sector and the Defence Procurement Policy of 2006, which is about to be superseded. 

But despite frustration over the MoD’s lack of clarity, the global defence industry has arrived in record numbers. A seminar speaker from the British MoD summed up the Defexpo: India needs global technology; and the global defence majors need India’s market.