Since the industrial revolution no country has become a major power without becoming an Industrial Power1. Japan & Germany emerged from the ravages of the Second World War at the back of a vibrant manufacturing sector. China’s ascendancy to being the world’s second superpower is a result of its colossal manufacturing prowess. The decline of manufacturing in the United States is its biggest concern and has been at the root of the political upheaval in the world’s most powerful democracy.
The “Make in India” initiative launched by the Prime Minister in 2014, brought a new squall of energy & excitement across multiple industrial sectors and perhaps the most critical was Defence Manufacturing. Companies – large & small have announced plans or have already entered into the sector. An emerging global power like India cannot stay an arms importer for long with only a public sector establishment for all of its requirements. Indigenous design, development & manufacturing and the inclusion of the Indian Private Sector had to be given a new lease of life.
Amongst the many reforms, the major one was the introduction of “Strategic Partnership(SP)” model for procurement of strategic platforms for the Armed Forces, formally announced by the government in May 2017.
Strategic Partnerships – Grand Vision
Ambitions of the political leadership to institute corrective mechanism and vision of the government could only be matched, in an inclusive embrace of the private sector.
Concept of SP model includes Private Industry as a partner to the Armed Forces, in the development of sustainable long-term design & manufacturing capabilities. SPs hold the key, for the Armed Forces to get the procurement executive to act in an atmosphere conducive to near-hassle free & expedited induction.
In the SP Model, the government has provided a strengthening balance to the sector. It is about a holistic development of capabilities, infrastructure, creation of jobs, idea is for the private industries to engage with complex technologies and build strategic systems in a long-term partnership with the government, under the umbrella of a well-defined protocol.
In concept, while the selection of the foreign platform and the foreign OEM needs “Exclusivity”, the selection of the potential SPs demands “Inclusivity”, as a mandate for exercising formidable options.
Strategic Partner Selection: Inclusivity key to the success of the model
The Experts committee report indicated, “The selection procedure for such Strategic Partners is the most crucial element in operationalising the idea. The entire scheme rests on it”.
The earlier model of the Raksha Udyog Ratnas simply never took off. Do we intend to repeat this error again?
The spirit of the policy has been & should continue to be based on the principle of “Inclusivity”. Broad based selection is the key to create a large pool of potential SPs from the domestic private industry. Towards this, the selection criterion needs to be flexible, adaptable and inclusive to bring about healthy options. We cannot afford to create another exclusive club, of established companies in the private sector with an antediluvian approach with something like the segment specific criteria that have been specified in the policy document. Questions like Do you have experience in (i) production of aircraft/helicopters or components? (ii) special machining capabilities/composites manufacturing (iii) hangars exclusively available for production, testing and assembly of aircraft? These questions may fuel rejection rather than selection.
Selection on the basis of overall capabilities included in the general criteria (ability to setup a supply chain and collaborate with large set of partners) and a realistic assessment to bring such capabilities to ground in the stipulated time-frame, would help. Had Mukesh Ambani’s Jio-venture been asked such questions, we as ordinary citizens would never have known that we paid exorbitantly. So was the case with Capt GR Gopinath of the famous Air Deccan, who revolutionised costs in air travel; other established players just followed suit.
The SP Model cannot be based on the principle of elimination on stated parameters, rather be on the sound principles of Inclusion and deep selection. A broad-based selection with an inclusive approach allowing as many possible contenders without any fear of favour is the call of the hour.
The SP Model has the potential to create a complete eco-system in the country, provided it is executed using the inclusive framework. New entrants will harness the strength in the existing system, apply innovative methods, work with a differentiated framework and bring new culture in sync with their global partners and venture to create Development Partners in consonance with their philosophy. Large conglomerates who have proven their mettle in other industries should be allowed to participate alongside established ones in the defence space to create depth in the sector. May the most efficient private player help the nation in its journey to become a global power.
New geographies will emerge, new opportunities will fuel expectations and growth. New technologies will have a chance to proliferate and new entrants would romance them better, while new markets will emerge in a quest for exports.
A new India, industrially strong India, a regional superpower, with home-grown military might, is waiting to happen.
(The writer is an Independent Consultant, Defence and Aerospace. Views are personal)