For sure, this has been the avowed objective of the procurement policies and procedures, such as they are, for a long time.
By Amit Cowshish
The chief of defence staff General Bipin Rawat has set the tone for the defence procurements in the coming years with a clear message that the dependence on, if not preference for, import of expensive foreign weaponry must give way to indigenous equipment and platforms. For sure, this has been the avowed objective of the procurement policies and procedures, such as they are, for a long time. In fact, since 2014, there has been a renewed focus on Make in India in defence since. That none of this has worked would be an understatement.
According to a report by the Stockholm International Peace Research Institute (SIPRI) published earlier this year, India was the second-largest importer of arms in the world over the past five years (2014-19)and ranked 23rd in the list of the top 25 exporting countries, most of the exports being from the state-owned production units to some neighbouring countries.
This is not where India should have been two decades after the defence sector was opened to foreign direct investment and private sector participation and several years of pursuing the goal of self-reliance in defence.
The newness of what General Rawat has said lies not just in an oblique admission of these ground realities, but a candid acknowledgement that the preference for imports is often on account of unrealistic services qualitative requirement (SQRs), or specifications, formulated by the armed forces.
These SQRs are such that neither the Indian industry nor the defence research and development organisation (DRDO) can achieve them within the desired time frame.
Any suggestion that SQR formulation is a problem area and, therefore, these have to be more realistic, is generally countered with vehement assertions that dilution of the SQRs would amount to compromising on the military capability that the equipment is required to deliver.
General Rawat’s statement that hand-holding of the Indian industry requires the armed forces to accept weapon systems even if initially they meet 70 per cent of the SQRs – for given the opportunity, they will eventually deliver the weapon systems with cutting-edge technologies – puts paid to the traditional opposition to gradual scaling up of the specifications as the industry gains more and more experience.
Coming from the chief of defence staff, it should carry weight with the armed forces and address one of the most intractable problems faced by the industry. Setting realistic SQRs and improving the existing system of field trials for indigenously designed and/or manufactured equipment would go a long way in boosting Make in India than any other measure.
The objective of the field trials must be to enable the participating vendors to rectify any deficiency noticed during the trials within a reasonable time so that they remain in contention, rather than eliminating them at the first sign of failure to meet any of the several parameters on which the equipment is generally trial-evaluated.
For sure, it will take a lot of doing to translate the chief’s thoughts into action on the ground, ensuring their acceptability by the individual services being the first major task. The services too will have to figure out to what extent the SQRs can be scaled down for the benefit of the Indian industry without making any serious compromises on the operational needs.
These developments should not have the foreign vendors worried about their prospects in India. For one thing, India will continue to need some state-of-the-art equipment, whose SQRs cannot be eased, making it difficult for the Indian industry to make it in India within the desired time frame.
Such equipment, platforms and weapons systems may continue to be imported while the Indian industry climbs up the learning curve, or the Indian industry may need to tie up with the foreign vendors for co-development and/or co-production of such equipment. This situation is unlikely to change any time soon.
How the chief’s ideas play out and whether these will energise the fledging Indian defence industry, especially the micro, small and medium enterprises, and the start-ups, would also depend on some other crucial factors.
First, it must be made easier for the defence companies to operate in India. This requires a fundamental attitudinal change so that they are treated as partners and not potential defaulters. This also requires quick decision-making. The civilian and military leadership has a significant role to play in this as their attitude, as well as the speed and quality of their decision-making, can make or mar any project.
Second, the procurement procedures need to be made simpler than what they are. The draft Defence Procurement Procedure 2020, released by the defence ministry on 20 March, seems to have made the procedure more complex, rather than making it simpler.
Most importantly, financial realism that now also takes into account the post-COVID 19 fiscal constraints, will have to be the basis of the future procurement plans drawn up to strike a balance between the security needs and the imperatives of promoting indigenous defence production.
(The author is former Financial Advisor (Acquisition), Ministry of Defence. Views are personal.)