India and Defence Exports: Silver Lining to a Dark Cloud

13 February 2014

C Uday Bhaskar

Member, Executive Committee, IPCS

Defexpo India, held in New Delhi in February, showcased a wide range of land, naval and internal security systems with as many as 624 companies participating - both foreign and Indian. The 368 foreign companies were drawn from 30 different nations who collectively represent the dominant global arms export cluster.

India, which now ranks among the world’s top arms importers (US$ 3. 3 billion in 2010), is clearly a valuable customer, and conservative estimates suggest that if the GDP growth remains robust, over the next decade, Delhi would be spending as much as US$ 100 billion in acquiring major military inventory items from Indian and foreign entities.

However Defexpo is about India seeking to demonstrate its own capability in this hugely competitive market, and some of the global indicators are stark. As per the Stockholm-based SIPRI’s estimates, for 2011, the world’s four major arms exporters were (in US$ billion): US 9. 98, Russia 7. 87, France 2.43, and China 1.35. The 15th country in the list is South Korea with an arms export figure of US$ 225 million. In the same year - 2011 - India ranked at number 54 and had total exports of a mere US$ 8 million.

Clearly, India has to review its arms and military export profile in an objective and holistic manner. While India in the last four decades has made some significant design and development progress in a few critical areas such as missiles, nuclear weapons, nuclear propulsion satellites and to an extent in warships - the track-record in the larger spectrum of conventional arms is distressing.

The unalloyed truth is that there is not a single credible major military inventory item/platform that is truly Indian designed and manufactured. This includes the spectrum of personal weapons, artillery guns, tanks, ships and fighter aircraft. Yes, there are sub-systems that have been introduced and some major breakthroughs are in the pipeline (such as the main battle tank) but they are yet to be realised.

Here, the historical context is instructive. The first modern gunpowder factory was set up in Ichapur, West Bengal by the East India Company in 1787, and a gun carriage unit in Cossipore near Kolkata in 1801. Almost a 100 years later, Ichapur was converted into a rifle factory in 1902 and these factories played a valuable role in World War I.

However, almost 70 years after attaining independence, India, which no doubt had been steadily de-industrialised during colonial rule, has not been able to find the political determination and sagacity to create a reasonably credible indigenous defence production base. Not even for the smallest inventory item - the personal rifle and other small arms such as revolvers - most of which are still imported. This is a paradox, and a shame that for a nation that has over 2 million personnel in uniform - military, para-military and police put together - India did not deem it imperative to design and manufacture its own assault rifle. 

Much the same experience can be related in the case of the Indian army's main battle tank - though the improved version of the Arjun is soon to be inducted - skeptics aver that it may still be delayed. The most deplorable event is the long delay in the inability of the Indian defence PSUs and the eco-system that sustains them from designing and producing a suitable artillery gun. The Bofors scandal going back to the Rajiv Gandhi years in the late 1980s still plagues decision-making.

The track-record in the aviation industry has been even more bleak and notwithstanding the early success of the small fighter aircraft in the 1960s (HF-24 Marut), India still does not design and manufacture its own fighter aircraft, a trainer or a transport plane. Yes, currently the Tejas light combat aircraft and the Dhruv helicopters produced by the DRDO are a silver lining though the last lap is yet to be completed.

In contrast to the other two services, the Indian Navy has had greater success in indigenisation and to an extent exports - but this is only relative. The reason may lie in the fact that the Navy is the only service that has invested in ship design, has uniformed personnel in this cadre and also works in close co-operation with the shipyards. Thus the Navy has become a stakeholder in the process of indigenisation and from the first INS Godavari class frigate in the 1980s, India now designs and produces warships that are deemed credible fighting platforms. Yet here again one must concede that the critical ordnance - guns, missiles and torpedoes - are totally imported.

However, the current Defexpo has drawn attention to the areas where India has made some progress and the synergy between the state-owned defence PSUs and the proven private sector is waiting to be harnessed. 

One visible success story is that of the Kalyani artillery gun by the Bharat Forge group which could be a breakthrough. The entry of major private groups such as the Tatas, Reliance and L&T among others augurs well but the need for nurturing this initiative with political integrity and commitment cannot be over-emphasised. Their entry and success needs to be enabled by the state, and this is where the lack of political will and bureaucratic hurdles need to be redressed - with the utmost urgency.

The current monopoly that defence PSUs have over production of major inventory items, the lack of an empathetic relationship between the military and the DRDO, the step-motherly treatment meted to the private sector, and the near total absence of academia in this endeavour are major policy issues that need to be redressed by the next government on a war-footing.

In ten years, the UPA government alas has shown a singular lack of resolve in this crucial area of national security, and hence the ignominy of watching imported military equipment being paraded on Republic Day. Hopefully Defexpo India will draw the right kind of attention to the contour of the very dark cloud and the silver lining that needs to be burnished.