Delivering the Lovraj Kumar Memorial Lecture here, Vittal said, "We will be increasingly facing denial regimes and unless we are able to develop strategic technologies and have the production facilities set up in our country, in future when a real crunch comes, we will be found wanting."Criticising the Bombay Club, Vittal said their swadeshi argument was invoked to plead that a level playing field must be created for the Indian industry to face the competition.

The genuine test of a swadeshi or pseudo-swadeshi was whether at the end of it the Indian industry was able to become strong enough to take on global competition within the country as well as abroad. If a policy provided only a crutch to the industry benefiting at the cost of the customer who is denied a choice, then it is not genuine swadeshi.

He, however, supported availability of cheap capital to the industry as Japan and South Korea had done. This put the Indian manufacturers at a disadvantage and he called for certain export-oriented industries like garments, leather and information technology be granted duty advantage to compete in the global market.

Vittal said that a conscious strategy to develop a military industrial complex would help us overcome our perennial posture as a developing nation, fear of the MNCs and a grow above the very marginal voice on any major issue of international importance that we have been.

Creating a military industrial complex would mean an intelligent and well thought out strategy by which the government would co-opt both the public and private sector and systemically develop capabilities of manufacturing the best defence equipment.

Vittal cited the instance of China and US, where such complexes had a significant role to play in developing the economy. This alone should be the reason for India emerging as a military power.

"In fact, when the People's Liberation Army of China started its business ventures, it was a temporary expedient to make up for the inadequate defense budgets. After 15 years of spectacular growth, Chinese Business Military Complex (CBMC) is likely to be a permanent and powerful presence in the its economy," Vittal said.

He said another country we could learn from is Israel. "Whether we look at China or Israel, we find that we lacking in this strategic vision of consciously developing a military industrial complex.

Yet another reason for developing such a complex was that without an economically viable weapons system most of the technologies in the military areas were of no use. He cited the instance of nuclear technology, which was difficult to weaponise at a competitive price. "Every technology development for defence will also have civilian use and in this way, the economic production of these various systems will become more manageable."

He applauded technology transfer in the nuclear science area and said that technologies developed for defence must be systematically transferred to the civilian side. ``In this way we would be building a base for economic production of strategic items, which may also have spin off benefits as in Israel and China."