Self-reliance in defence

 

By Ajai Shukla

Editorial comment in Business Standard, 6th Aug 20

The defence ministry released, in successive weeks, the drafts of a new Defence Acquisition Policy (DAP-2020) and a new Defence Production and Export Promotion Policy (DPEPP-2020). The two are together intended to promote the design, development and manufacture of home-grown weapons platforms, to boost the indigenous content of all weaponry the military uses and defence exports to provide business for domestic defence producers. The DPEPP-2020 targets the production of Rs 175,000 crores (US$ 25 billion) in aerospace and defence goods and services by 2025. Of that, Rs 35,000 crore (US$ 5 billion) worth of equipment is to be exported – a pledge that Prime Minister Narendra Modi earlier made at the Defexpo 2020 in February.

 

Since current defence production amounts to about Rs 70,000 crore, achieving the DPEPP-2020 target requires India’s aerospace and defence industry to double domestic sales over the coming five years and more than triple exports from the current levels of about Rs 11,000 crore. While these targets are ambitious, there is some welcome scaling down from the previous 2018 policy which stipulated that India must enter the world’s top five defence producers and become self sufficient by 2025 in building the country’s requirement of fighter aircraft, helicopters, warships, tanks, missile systems, gun systems, and small arms and ammunition. Instead of this, the proposed policy only plans to notify a negative list of weapons and platforms, the import of which would be embargoed with effect from a specified year. However, a clause in the policy allows the military the wiggle room to continue importing weaponry it deems essential.

 

Achieving these domestic production targets will require the military to stop insisting on imported, state-of-the-art weaponry and, instead, partner domestic industry in creating alternatives here. Home-grown solutions are available in the Tejas fighter aircraft, Arjun tank, Advanced Towed Artillery Gun, Pinaka rocket launchers and tactical missiles such as Nag, Astra and Akash. In successfully building ballistic missiles like the Agni series, the Defence Research & Development Organisation has already proven its capability to deliver cutting edge strategic systems. The three services must accept domestic weaponry into service, and then partner industry in improving it into world-class systems. 

 

Since the current defence capital budget is just Rs 118,534 crore and only a limited raise is realistically possible, exports must be increased for absorbing Rs 175,000 crore worth of defence production. The government has already taken some steps: Defence attaches in Indian embassies abroad have been charged with exploring export opportunities. A liberalised trade environment has been created for defence exports by obtaining Indian entry into three of the four global export control regimes: Missile Technology Control Regime, the Wassenaar Arrangement and the Australia Group. Entry into the fourth – the Nuclear Suppliers Group – could soon happen. Friendly foreign countries such as Myanmar, Maldives and Sri Lanka have been offered “credit lines” for purchasing Indian defence equipment. A nodal agency, the Indigenous Defence Equipment Exporters Association, was set up last year for processing defence export inquiries from prospective customers across the globe.

 

Finally, boosting defence production requires production to switch from low-value items to building high-value combat platforms such as aircraft, helicopters, tanks, air defence systems and warships. Not only would this raise the value of domestic defence production but also provide a stamp of Indian military approval to encourage potential foreign buyers.