Defence Technology Development Models in India

The setback in the Sino-Indian War of 1962 and the Kargil episode of 1999 had exposed deficits in combat preparedness of the defence forces. Various models were adopted to make India self reliant in military technology out of which only a few have worked satisfactorily. Despite opening up of the defence sector for private participation in 2001, India still depends on imports to meet 74 per cent of its defence requirements. The goal of increasing indigenous component to 70 per cent of India’s defence requirements still seems to be a distant dream. 

Despite the fact that India has been following licensed production route for decades for large scale projects like tanks (T-55, T-72 and T-90), aircrafts (MiG series, Jaguar), ICVs etc., no genuine and substantial technology has been transferred to India. Licensed production model could not make major inroads into indigenisation, particularly in the field of design and development. According to a case study by Bonn International Center for Conversion, from 1960s to 1980s an over emphasis on licensed production led to a situation of under-supply, forcing the government to opt for immediate short term measures in terms of imports.

With a view to carry out holistic indigenous development, Defence Research and Development Organisation (DRDO) was set up in 1958. However, an analysis in the last two decades indicates that only one-third of the products/ solutions developed by DRDO have been used by the Armed Forces. DRDO’s unflattering track record, in terms of timelines to design and develop major defence solutions like the LCA, Arjun MBT, Kaveri engine etc. are examples of underperformance. A recent audit by the Comptroller General of Defence Audit (CGDA) highlighted the fact that DRDO has been developing equipment which are either sub-standard or have extended deadlines and additional budgets. An analysis carried out of the research being done by DRDO indicates that a large segment of R&D is devoted to non-critical technologies. Technologies like preservation of food items, juices, mosquito repellents etc. can be hived to the private sector leaving DRDO to concentrate on core technologies. Similarly, the Ordnance Factory Board (OFB) and Defence Public Sector Undertakings (DPSUs) have also been spending enormous amount of money for production of defence equipment, most of which are available off the shelf. But, when it comes to indigenous development of military solutions in conjunction with DRDO, OFB and DPSUs have not been able to upgrade their facilities and expertise to match the global standards. DRDO needs to invest more time and resources for continuous development of critical technologies, which have long gestation periods, to reach a stage of fruition. The private industry players find it very difficult to develop core products for the military as they are hampered by the tedious acquisition processes and a lack of conducive operating environment.

Where appropriate decisions have been taken for developing strategic solutions, the results achieved have been favourable. The Joint Venture (JV) between DRDO and Russia’s NPO Mashinostroeyenia for development of BrahMos supersonic cruise missile is one of the bright spots in the indigenisation saga. BrahMos has not only strengthened India’s technological base but has become the market leader in its field. The joint development of Fifth Generation Fighter Aircraft (FGFA) is another area of cooperation between India and Russia, which is expected to enhance India’s armament industrial base. Both countries are confident that FGFA would be one of the world’s most advanced fighters. Similar projects and practises, if implemented in the coming years, will give the much needed push to the industry to absorb technology from foreign partners and eventually develop defence solutions on its own. This approach might take time, but the approach seems to be right.

Introduction of offsets in defence procurements is being viewed as a promising model for indigenisation.  However, more than seven years after its inception, offsets don’t seem to have achieved the desired results. This is largely due to the extremely strict Defence Procurement Procedure (DPP) guidelines, reluctance of local private companies, 26 percent cap on FDI which deters the foreign vendors to participate, inactive offset management agency, lack of clarity of offset contracts, and delays in decisions on offset related issues. Offsets can be used very effectively to obtain high end technologies, provided the offset provisions are managed efficiently by the government. The latest revision in the offset policy in August 2012 by the policy makers is a positive development. Such measures need to be enhanced.

Lately, new models are being adopted to achieve self reliance. In June 2012, the MoD flagged off India’s first competitive development of a major military system, the Tactical Communications System (TCS). The TCS has become the first 'Make' programme under DPP 2011. As per DPP, the 'Make' programme will have the government providing approximately 80 per cent of the funds for development and rest will come from the industry. Future Infantry Combat Vehicle (FICV) programme is another such example where local Indian industry has been invited to develop solutions for Army in collaboration with suitable foreign technology partners. This is a welcome change as it provides a level playing field for the private and public enterprises, and encourages the private companies for greater participation in defence manufacturing. The outcome of such programmes is yet to be analysed as these are at a very nascent stage. IAF is also planning to adopt a different model for indigenous development of aircrafts through the private industry, rather than depending solely on HAL. Popularly known as the Avro model, it envisages the development of aircraft for replacement of Avro transport aircraft fleet under the aegis of a suitable consortia led by foreign/Indian private companies. The consortia formation approach and Public-Private Partnerships (PPP) are viable options to synergise and enhance national competence in producing state of art defence equipment. The success of TCS, Avro replacement, FICV and BMS projects lies in understanding the dynamics of technology, management and the business environment.

These new developments are positive signs, as new entrants need some level of initiation and hand–holding in order to compete with established players. The efforts of the decision makers to create a level playing field will provide the much needed push to the private industry. It is time to analyse the global defence industry and emulate the successful examples instead of experimenting blindly. Unplanned indigenisation without taking into account our capability and technology absorption capacity has led to severe deficiencies and failed systems in the past. Close synergy between technology developers and the users is required at the decision making and development level for a vibrant and healthy Defence Industrial Base.

The author is a Research Assistant at Centre for Land Warfare Studies (CLAWS), New Delhi.

Views expressed are personal