By Josy Joseph
Mar 10, 2013
When the clouds of corruption hovering over the Agusta-Westland helicopter deal (worth over Rs 3,500 crore for 12 helicopters) burst in February with the arrest of former Finmeccanica chief executive and chairman Giuseppe Orsi, all defence minister AK Antony could do was express helplessness in fighting corruption in defence deals.
Recovering from the initial embarrassment of the revelations, the government seems to have finally accepted that the long-term solution to rampant corruption is an urgent and immediate turn towards aggressive indigenisation in military manufacturing. And indications emerging from the Ministry of Defence are that such a new course of action is under preparation, and could soon be unveiled. However, the transition from being a heavy importer of military wares to creating a robust military-industrial complex within is a stroll in an unmapped minefield.
Take a cue from China
A recent study by the Stockholm International Peace Research Institute (Sipri) pointed out that India has in recent years become the world's largest recipient of arms, accounting for 10 per cent of global arms imports in the period 2007-11. In contrast, China, which was the largest recipient of arms between 2002 and 2006, fell to fourth place in 2007-11.
This is mainly because China has aggressively pursued indigenisation over the past couple of decades . As a result most of its current defence budget — officially estimated at $119 billion for this year — will be spent on purchases from within the country. As such, a massive amount of money flows into its domestic military-industrial complex which has a multiplier effect — on R&D, employment generation, and battlefield surprises for adversaries.
The fact is that India's present efforts, and systems , are not up to the task of creating a robust military-industrial complex. The vested interests of the defence public sector units (DPSUs), ordnance factory board (OFB) and the Defence Research and Development Organisation (DRDO) actually symbolise what is stopping India from creating such a thriving complex, even though the country has one of the world's most dynamic manufacturing sectors. By keeping private sector on the margins of defence procurement, India has allowed itself to be caught in a vortex of imports and public sector inefficiencies.
Yet many Indian private sector players have exhibited their manufacturing capabilities, innovative leadership and growth ambitions across various segments. Several Tata group companies, L&T, the Mahindra group, Reliance and others continue to remain optimistic of a breakthrough. Whenever called in to meet a challenge these companies have shown they are capable of it. Larsen & Toubro built the hull for India's indigenous nuclear submarine and is now ready to build conventional submarines. However, the navy and the MoD do not seem to be very enthusiastic. Tata Power SED (Strategic Electronics Division) recently exhibited a 155mm/52 calibre truck mounted howitzer, developed in partnership with Denel of South Africa. The company says it is presently 50 per cent indigenous. However, the Army doesn't seem to be very excited, arguing that Denel is blacklisted in India.