As Asia grapples with the management of strategic change and related security challenges, countries across the region - from India to Japan - are strengthening their defence capabilities. Meanwhile, despite periodic changes and updates of its defence production and procurement policies to try and build indigenous capacity, India's ministry of defence (MOD) has been largely unable to remedy severe constraints in the country's defence industrial base. Around two-thirds of India's defence hardware requirements are still being imported. There are endemic delays in domestic production programmes while costs continue to escalate, seriously undermining India's defence preparedness. This is an area of vulnerability that India can ill afford.
Symptoms of this deficiency abound. Even after three decades of development, the serial production of the Tejas Light Combat Aircraft is still some years away. Russian-origin SU-30MKI fighters basically continue to be assembled, not manufactured, by Hindustan Aeronautics Ltd. The long-awaited medium multi-role combat aircraft contract remains bogged down over modalities for co-production of the Rafale. In contrast, as pointed out by former Air Chief N A K Browne, "the streamlined induction and speedy operationalisation of our new assets like Mi-17 v5, C-130J, Pilatus PC-7 and C-17 aircraft have afforded us unprecedented response capabilities." Sadly, outright imports seem to work, with timely deliveries and without cost overruns.
Even in the middle of a prolonged diplomatic impasse with the US over the past month, it is significant that India concluded a contract worth $1.01 billion for the acquisition of six additional C-130J "Super Hercules" aircraft on December 27 last year. This may be welcome for the Indian Air Force but gives rise to concerns in some quarters about "dependence" on the US. However, a growing defence trade and technology partnership with the US is hardly likely to push India into defence dependence. If that were indeed the case, then India's defence relationship with the erstwhile USSR and now Russia would have to shoulder much of the blame. According to the Stockholm International Peace Research Institute, Russia accounted for 82 per cent of Indian arms imports during 2006-10. Decades of defence ties with Russia have not helped kick-start India's domestic defence industry, and can only be described as a patron-client relationship. Therefore, holding up the nascent India-US defence relationship as a signal of India's dependence on international players would be a wrong diagnosis. The problem lies elsewhere.
There are a number of structural constraints bedevilling India's domestic defence industry. In the past, India shunned private participation in its defence industry, while Cold War dynamics restricted defence industrial interactions with the West. Defence Public Sector Units (DPSUs) emerged as the principal players, and there are today more than 50 Defence Research and Development Organisation facilities, 41 ordnance factories and nine DPSUs. The fact that this combine is still struggling to meet the growing needs of the Indian defence forces because of inherent limitations speaks for itself. Attempts at indigenisation have been largely rhetorical and less than satisfactory, to say the least.
It was only in 2001 that the defence industry was finally opened up for the Indian private sector, but procurement policies have remained heavily skewed in favour of seemingly overburdened but chronically under-performing DPSUs. The latest iteration of the Defence Procurement Procedure 2013 mandates purchases from an Indian maker as the most preferred option, which could potentially be made to work to the advantage of the Indian private sector, which still lacks operational experience, technology and resources. However, moving from the monopoly of DPSUs to the oligopoly of a few Indian private sector companies would not be a sustainable model either. What India requires is a vibrant defence industrial base with multiple domestic and international players engaged in healthy partnerships as well as competition to provide the best weaponry for the armed forces.