Wake-up call for the Israel Defense Forces
Despite the IDF’s many achievements, the current war in Gaza reveals once again the necessity of a comprehensive reorganization of the military.
Amos Harel
Haaretz, July 30, 2014
On the 22nd day of the war in the Gaza Strip, the Israel Air Force intensified its bombardments, hitting Hamas targets in spots close to densely populated areas, like the heart of Gaza City. There is obviously a link between these powerful attacks and the death of 10 soldiers the previous day in three separate incidents.
This escalation, however, does not point to a dramatic shift in the Israel Defense Forces’ troop deployment policy. The restrained tone of the press conference Monday evening given by the prime minister, defense minster and chief of staff was no coincidence. At the top they understand that wars have days in which tactical errors result in losses, but the state must absorb them and stick to its strategy, assuming it still believes the strategy is correct.
One can state with caution that Israel seems to be looking to end the operation within a few days, assuming Hamas doesn’t screw up its plans.
The aim is to complete the mapping and destruction of the terror tunnels to the degree possible and remove IDF forces from the Strip. On the one hand, the political echelon fears further entanglement and additional international criticism; on the other hand it doesn’t want to be perceived as having given up too soon, which could exact a high price in political and public support.
In recent days, senior intelligence, political, and military officials have repeatedly made two claims. The first is that the damage the IDF has inflicted on Hamas is incredible. The group has lost military assets and will suffer politically as well, because the Gaza population will hold it responsible for the consequences of the third failed campaign against Israel in five-and-a-half years.
The second is that Hamas is desperate for a cease-fire. The leaders, generals, and intelligence people seem to agree that the public doesn’t yet understand the depth of the blow delivered to Hamas. Its scope and ramifications, they say, will become clear only after the dust settles.
The leaders, generals, and intelligence people, of course, have information that isn’t available to us. But from what we can see at this point, this second assessment doesn’t ring true. Time after time external mediators have proposed cease-fires, but the organization either rejects them or violates them and then adds new demands.
Hamas doesn’t seem to have a discipline problem, probably because most of its military arm’s command mechanisms are still functioning. The impression is that Hamas is stubbornly holding out for the terms it deems critical, especially given the price it has paid for initiating the hostilities. Without achieving a significant easing of the blockade on the Strip, it will have a hard time compromising.
Israel at this point has three options. The first is to declare a cease-fire with no agreement, which is essentially what happened at the end of Operation Cast Lead in 2009. This approach, spearheaded at the time by Tzipi Livni, holds that a strong deterrent action is enough to keep the peace. The second option is to exit via some sort of agreement, even if it’s general, vague and unsigned. That’s what Israel did, aided by Egyptian mediation, after Operation Pillar of Defense in 2012.
The third option is to continue dealing powerful blows to Hamas in the hope that this will provide an even stronger deterrent, or even Hamas’ surrender. But this would probably be possible only by greatly expanding the ground operation, which the government is afraid to do. In any case, the army has not yet positioned the forces that would presumably be needed to execute such a mission.
As the war drags on and the losses mount, it’s no surprise that there are signs of friction between the political and military echelons. Prime Minister Benjamin Netanyahu and Defense Minister Moshe Ya’alon were not pleased by a briefing given this week in which a senior officer said that the prime minister had received a full report on the tunnel threat in June 2013. Indeed, questions about who knew what, and when, about the tunnels will be the focus of political and intelligence clashes once the fighting is over.
Looming in the background is another skirmish – this one over the defense budget. The IDF has estimated the costs of the operation at nearly 5 billion shekels ($1.46 billion). Chief of Staff Benny Gantz is already leveraging the attack on the obsolete armored personnel carrier, in which seven Golani soldiers were killed, to ask for an upgrade of all the army’s APCs.
The incidents on Monday raise some serious questions about the military’s judgment. The mortar fire that killed four Armored Corps soldiers near the border could have just as easily hit the hundreds of civilians who are streaming to the area every day, circumventing the Military Police checkpoints with ease.
When families are seen picnicking at the Black Arrow Memorial near Kfar Aza, only a few hundred meters from a border where battles are raging, it seems that something is lacking in the military’s control over events. This is directly related to the use of a deficiently armored APC and the attacks on two forward command patrols traveling in unprotected jeeps near the border, attacks that cost the lives of six fighters and officers.
Despite many achievements that the army brass can point to, the current war in Gaza reveals once again the necessity of a comprehensive reorganization of the military. The training of forces, the equipment in use, combat doctrine, and operational plans — all will need to be thoroughly investigated when the hostilities are over.
Despite the IDF’s many achievements, the current war in Gaza reveals once again the necessity of a comprehensive reorganization of the military.
Amos Harel
Haaretz, July 30, 2014
On the 22nd day of the war in the Gaza Strip, the Israel Air Force intensified its bombardments, hitting Hamas targets in spots close to densely populated areas, like the heart of Gaza City. There is obviously a link between these powerful attacks and the death of 10 soldiers the previous day in three separate incidents.
This escalation, however, does not point to a dramatic shift in the Israel Defense Forces’ troop deployment policy. The restrained tone of the press conference Monday evening given by the prime minister, defense minster and chief of staff was no coincidence. At the top they understand that wars have days in which tactical errors result in losses, but the state must absorb them and stick to its strategy, assuming it still believes the strategy is correct.
One can state with caution that Israel seems to be looking to end the operation within a few days, assuming Hamas doesn’t screw up its plans.
The aim is to complete the mapping and destruction of the terror tunnels to the degree possible and remove IDF forces from the Strip. On the one hand, the political echelon fears further entanglement and additional international criticism; on the other hand it doesn’t want to be perceived as having given up too soon, which could exact a high price in political and public support.
In recent days, senior intelligence, political, and military officials have repeatedly made two claims. The first is that the damage the IDF has inflicted on Hamas is incredible. The group has lost military assets and will suffer politically as well, because the Gaza population will hold it responsible for the consequences of the third failed campaign against Israel in five-and-a-half years.
The second is that Hamas is desperate for a cease-fire. The leaders, generals, and intelligence people seem to agree that the public doesn’t yet understand the depth of the blow delivered to Hamas. Its scope and ramifications, they say, will become clear only after the dust settles.
The leaders, generals, and intelligence people, of course, have information that isn’t available to us. But from what we can see at this point, this second assessment doesn’t ring true. Time after time external mediators have proposed cease-fires, but the organization either rejects them or violates them and then adds new demands.
Hamas doesn’t seem to have a discipline problem, probably because most of its military arm’s command mechanisms are still functioning. The impression is that Hamas is stubbornly holding out for the terms it deems critical, especially given the price it has paid for initiating the hostilities. Without achieving a significant easing of the blockade on the Strip, it will have a hard time compromising.
Israel at this point has three options. The first is to declare a cease-fire with no agreement, which is essentially what happened at the end of Operation Cast Lead in 2009. This approach, spearheaded at the time by Tzipi Livni, holds that a strong deterrent action is enough to keep the peace. The second option is to exit via some sort of agreement, even if it’s general, vague and unsigned. That’s what Israel did, aided by Egyptian mediation, after Operation Pillar of Defense in 2012.
The third option is to continue dealing powerful blows to Hamas in the hope that this will provide an even stronger deterrent, or even Hamas’ surrender. But this would probably be possible only by greatly expanding the ground operation, which the government is afraid to do. In any case, the army has not yet positioned the forces that would presumably be needed to execute such a mission.
As the war drags on and the losses mount, it’s no surprise that there are signs of friction between the political and military echelons. Prime Minister Benjamin Netanyahu and Defense Minister Moshe Ya’alon were not pleased by a briefing given this week in which a senior officer said that the prime minister had received a full report on the tunnel threat in June 2013. Indeed, questions about who knew what, and when, about the tunnels will be the focus of political and intelligence clashes once the fighting is over.
Looming in the background is another skirmish – this one over the defense budget. The IDF has estimated the costs of the operation at nearly 5 billion shekels ($1.46 billion). Chief of Staff Benny Gantz is already leveraging the attack on the obsolete armored personnel carrier, in which seven Golani soldiers were killed, to ask for an upgrade of all the army’s APCs.
The incidents on Monday raise some serious questions about the military’s judgment. The mortar fire that killed four Armored Corps soldiers near the border could have just as easily hit the hundreds of civilians who are streaming to the area every day, circumventing the Military Police checkpoints with ease.
When families are seen picnicking at the Black Arrow Memorial near Kfar Aza, only a few hundred meters from a border where battles are raging, it seems that something is lacking in the military’s control over events. This is directly related to the use of a deficiently armored APC and the attacks on two forward command patrols traveling in unprotected jeeps near the border, attacks that cost the lives of six fighters and officers.
Despite many achievements that the army brass can point to, the current war in Gaza reveals once again the necessity of a comprehensive reorganization of the military. The training of forces, the equipment in use, combat doctrine, and operational plans — all will need to be thoroughly investigated when the hostilities are over.
While
dedicating the formidable Indian warship INS Virkamaditya, the
retrofitted Russian aircraft carrier to the nation at an impressive
ceremony held in June, Prime Minister Narendra Modi made a strong pitch
for an all round self-reliance in the defence production sector with a
view to meet the growing and diverse needs of the Indian defence forces.
Rightly and appropriately, Modi wondered why should India, which has
many impressive technological strides to its credit, import defence
equipment at first place. Elaborating on the need for self-sufficiency
in defence production, Modi drove home the point:”We need to give
immense importance to latest technology. We must be self sufficient. Why
can’t we send our defence equipment to other countries?” The logic of
Modi was that India which has already sent probes to Moon and Mars
cannot forever depend on imported defence hardware. Moreover, the need
for self reliance in defence production projected in the election
manifesto of the Bharatiya Janata Party (BJP), the largest and dominant
partner of the National Democratic Alliance (NDA) government, can by no
means be taken lightly by Modi. There is no denying the fact that Modi
is all for giving a big push to the creation of a vibrant Indian
military industrial complex that would not only meet the needs of Indian
defence forces but also turn India into a major exporter of arms and
ammunition.
Taking a cue from the spirited advocacy by Modi of the need to position India as a leading arms exporter - from being a major importer now - Defence Research and Development Organisation(DRDO) has made it clear that there is a huge potential for the export of missiles, fighter aircraft and related defence hardware from India. However, DRDO chief Avinash Chander said that the country would need to adopt a new “policy mechanism” to facilitate the large scale exports of defence equipment. ”We have a list of equipment that includes the Light Combat Aircraft(LCA) Tejas, Akash air defence system, Prahar class of missiles and Indo Russian supersonic cruise missile BrahMos along with a number of systems that can be exported” stated Chander. According to Chander, the biggest advantage that India could derive in the defence export market is the “competitive and affordable price tag” of Indian defence and aerospace products.
All said and done, attaining the goal of indigenous defence production on a large enough scale to meet the demands of Indian defence forces would be a complex and time consuming process. For India would need to overcome the sixty years legacy of “lost opportunities and shocking neglect’ to build a self reliant defence production base. What’s more, most of the Indian origin defence equipment continues to feature a large number of imported components and sub-systems. And for long, defence production in India has been synonymous with the units of state owned Ordnance Factory Board (OFB) numbering forty one and nine defence public sector undertakings with private sector playing a very marginal role in the entire exercise. Not surprisingly then, two third of India’s defence hardware requirement is met through imports and India had also notched up the not so pleasant distinction of being the largest arms importer.
The on-going consultation to hike the level of FDI (Foreign Direct Investment) in India’s defence sector happens to be a major initiative of Modi government to expand the scope and sweep of defence production in India. In this context, the Department of Industrial Policy and Promotion (DIPP) is batting for 100% FDI in case of the investing foreign partner willing to make available state of the art technology and 74% in case of the transfer of technology that is not cutting edge. But then a section of the Indian industry advocates the need for capping the FDI in defence sector at 49%. But there is also a view that 49% FDI may not be alluring for global companies to invest in India. It would only sustain the continuation of the status quo situation.
The current level of FDI investment in Indian defence sector is 26% which is said to be far from attractive to foreign manufactures to invest in the Indian venture. After much dithering, in July 2013 the then Indian Government decided that FDI of more than 26% could be allowed on a case by case basis subject to the condition that such a “relaxation” helps India “access modern and state of the art defence technologies.” According to a study by the New Delhi based Stratcore India, the plan to boost the FDI in defence sector could result in the creation of half a million jobs over the next one decade if manufacturing can be managed according to a plan and the government can facilitate collaboration among foreign companies and their Indian counterparts.
The Modi Government going beyond paying lip service to the cause of defence self reliance has clearly demonstrated that it means business - serious one at that - in pushing the country towards the goal of indigenous defence production. In a first step taken in around one month of assuming office, Modi Government has smoothened the road for an increased participation of the private sector industries in country’s defence production infrastructure. To this end, it has announced a relaxation that would no longer require any industrial licence to produce a large number of components and sub systems required in fighting equipment. The new notification issued by the Union Commerce and Industry Ministry makes it mandatory to have manufacturing licence only for heavier battle field systems including tanks, armoured vehicle, aircraft and warships. Further, the control on the dual use items with both defence and civilian applications have been relaxed. According to the notification issued by the Ministry of Commerce and Industry,” it is clarified that dual use items, having military as well as civilian applications other than those specially mentioned in the list would also not require industrial license from the defence angle.” Indeed, at the end of the day the relaxation in the licensing norm could boost the prospects of heavy engineering firm including Bharat Forge, L&T Mahindra, and Walchandnagar Industries which have already forayed into the Indian defence production sector. This landmark decision augurs well for giving a quickening impetus to the task of build a resurgent Indian military industrial complex with the growing participation of the private sector.
“This step is important as it would bring more clarity to the procedures and it will encourage new entrants into the defence sector. The Indian defence industry is already at the bottom of the value chain and there is very less incentive for anyone to set up a defence industry in India,” says Baba Kalyani, Chairman and Managing Director of the Pune based Bharat Forge. Kalyani also happens to head the Confederation of Indian Industry’s national committee on defence.
If the massive outgo of foreign exchange for the import of weapons were to be diverted to support research, development and production in India, the country could easily walk on the road of self reliance in defence production. It was the obsession with secrecy that Indian bureaucracy nurtured all these years that blocked the participation of private industry in the defence sector. Of course, the Indian private sector lacks the technological base and manufacturing infrastructure good enough to turn out high performance, superior quality fighting equipment. This gap can be filled either through public-private sector participation or investment and participation by foreign companies. Further, the Indian private sector comes in very poor light in so far as the investment on research and development is concerned. As such the Indian government should come out with a slew of incentives to encourage investment in research and development to achieve technological excellence in critical areas of defence and aerospace products development.
Currently, much of the investment on defence and aerospace research and development is borne by the state owned research organisations and public sector enterprises. It was a relaxation announced in 2001 by the then NDA government led by Atal Bihari Vajpayee that enabled the participation of the private sector into the Indian defence production matter subject to the condition that they get an industrial licence from the commerce ministry. But then the task of building a vibrant Indian military industrial complex showcasing India’s technological prowess is challenging and daunting.
- See more at: http://www.claws.in/1230/turning-india-into-an-arms-exporter-radhakrishna-rao.html#sthash.o6GBKZfz.dpuf
Taking a cue from the spirited advocacy by Modi of the need to position India as a leading arms exporter - from being a major importer now - Defence Research and Development Organisation(DRDO) has made it clear that there is a huge potential for the export of missiles, fighter aircraft and related defence hardware from India. However, DRDO chief Avinash Chander said that the country would need to adopt a new “policy mechanism” to facilitate the large scale exports of defence equipment. ”We have a list of equipment that includes the Light Combat Aircraft(LCA) Tejas, Akash air defence system, Prahar class of missiles and Indo Russian supersonic cruise missile BrahMos along with a number of systems that can be exported” stated Chander. According to Chander, the biggest advantage that India could derive in the defence export market is the “competitive and affordable price tag” of Indian defence and aerospace products.
All said and done, attaining the goal of indigenous defence production on a large enough scale to meet the demands of Indian defence forces would be a complex and time consuming process. For India would need to overcome the sixty years legacy of “lost opportunities and shocking neglect’ to build a self reliant defence production base. What’s more, most of the Indian origin defence equipment continues to feature a large number of imported components and sub-systems. And for long, defence production in India has been synonymous with the units of state owned Ordnance Factory Board (OFB) numbering forty one and nine defence public sector undertakings with private sector playing a very marginal role in the entire exercise. Not surprisingly then, two third of India’s defence hardware requirement is met through imports and India had also notched up the not so pleasant distinction of being the largest arms importer.
The on-going consultation to hike the level of FDI (Foreign Direct Investment) in India’s defence sector happens to be a major initiative of Modi government to expand the scope and sweep of defence production in India. In this context, the Department of Industrial Policy and Promotion (DIPP) is batting for 100% FDI in case of the investing foreign partner willing to make available state of the art technology and 74% in case of the transfer of technology that is not cutting edge. But then a section of the Indian industry advocates the need for capping the FDI in defence sector at 49%. But there is also a view that 49% FDI may not be alluring for global companies to invest in India. It would only sustain the continuation of the status quo situation.
The current level of FDI investment in Indian defence sector is 26% which is said to be far from attractive to foreign manufactures to invest in the Indian venture. After much dithering, in July 2013 the then Indian Government decided that FDI of more than 26% could be allowed on a case by case basis subject to the condition that such a “relaxation” helps India “access modern and state of the art defence technologies.” According to a study by the New Delhi based Stratcore India, the plan to boost the FDI in defence sector could result in the creation of half a million jobs over the next one decade if manufacturing can be managed according to a plan and the government can facilitate collaboration among foreign companies and their Indian counterparts.
The Modi Government going beyond paying lip service to the cause of defence self reliance has clearly demonstrated that it means business - serious one at that - in pushing the country towards the goal of indigenous defence production. In a first step taken in around one month of assuming office, Modi Government has smoothened the road for an increased participation of the private sector industries in country’s defence production infrastructure. To this end, it has announced a relaxation that would no longer require any industrial licence to produce a large number of components and sub systems required in fighting equipment. The new notification issued by the Union Commerce and Industry Ministry makes it mandatory to have manufacturing licence only for heavier battle field systems including tanks, armoured vehicle, aircraft and warships. Further, the control on the dual use items with both defence and civilian applications have been relaxed. According to the notification issued by the Ministry of Commerce and Industry,” it is clarified that dual use items, having military as well as civilian applications other than those specially mentioned in the list would also not require industrial license from the defence angle.” Indeed, at the end of the day the relaxation in the licensing norm could boost the prospects of heavy engineering firm including Bharat Forge, L&T Mahindra, and Walchandnagar Industries which have already forayed into the Indian defence production sector. This landmark decision augurs well for giving a quickening impetus to the task of build a resurgent Indian military industrial complex with the growing participation of the private sector.
“This step is important as it would bring more clarity to the procedures and it will encourage new entrants into the defence sector. The Indian defence industry is already at the bottom of the value chain and there is very less incentive for anyone to set up a defence industry in India,” says Baba Kalyani, Chairman and Managing Director of the Pune based Bharat Forge. Kalyani also happens to head the Confederation of Indian Industry’s national committee on defence.
If the massive outgo of foreign exchange for the import of weapons were to be diverted to support research, development and production in India, the country could easily walk on the road of self reliance in defence production. It was the obsession with secrecy that Indian bureaucracy nurtured all these years that blocked the participation of private industry in the defence sector. Of course, the Indian private sector lacks the technological base and manufacturing infrastructure good enough to turn out high performance, superior quality fighting equipment. This gap can be filled either through public-private sector participation or investment and participation by foreign companies. Further, the Indian private sector comes in very poor light in so far as the investment on research and development is concerned. As such the Indian government should come out with a slew of incentives to encourage investment in research and development to achieve technological excellence in critical areas of defence and aerospace products development.
Currently, much of the investment on defence and aerospace research and development is borne by the state owned research organisations and public sector enterprises. It was a relaxation announced in 2001 by the then NDA government led by Atal Bihari Vajpayee that enabled the participation of the private sector into the Indian defence production matter subject to the condition that they get an industrial licence from the commerce ministry. But then the task of building a vibrant Indian military industrial complex showcasing India’s technological prowess is challenging and daunting.
- See more at: http://www.claws.in/1230/turning-india-into-an-arms-exporter-radhakrishna-rao.html#sthash.o6GBKZfz.dpuf
While
dedicating the formidable Indian warship INS Virkamaditya, the
retrofitted Russian aircraft carrier to the nation at an impressive
ceremony held in June, Prime Minister Narendra Modi made a strong pitch
for an all round self-reliance in the defence production sector with a
view to meet the growing and diverse needs of the Indian defence forces.
Rightly and appropriately, Modi wondered why should India, which has
many impressive technological strides to its credit, import defence
equipment at first place. Elaborating on the need for self-sufficiency
in defence production, Modi drove home the point:”We need to give
immense importance to latest technology. We must be self sufficient. Why
can’t we send our defence equipment to other countries?” The logic of
Modi was that India which has already sent probes to Moon and Mars
cannot forever depend on imported defence hardware. Moreover, the need
for self reliance in defence production projected in the election
manifesto of the Bharatiya Janata Party (BJP), the largest and dominant
partner of the National Democratic Alliance (NDA) government, can by no
means be taken lightly by Modi. There is no denying the fact that Modi
is all for giving a big push to the creation of a vibrant Indian
military industrial complex that would not only meet the needs of Indian
defence forces but also turn India into a major exporter of arms and
ammunition.
Taking a cue from the spirited advocacy by Modi of the need to position India as a leading arms exporter - from being a major importer now - Defence Research and Development Organisation(DRDO) has made it clear that there is a huge potential for the export of missiles, fighter aircraft and related defence hardware from India. However, DRDO chief Avinash Chander said that the country would need to adopt a new “policy mechanism” to facilitate the large scale exports of defence equipment. ”We have a list of equipment that includes the Light Combat Aircraft(LCA) Tejas, Akash air defence system, Prahar class of missiles and Indo Russian supersonic cruise missile BrahMos along with a number of systems that can be exported” stated Chander. According to Chander, the biggest advantage that India could derive in the defence export market is the “competitive and affordable price tag” of Indian defence and aerospace products.
All said and done, attaining the goal of indigenous defence production on a large enough scale to meet the demands of Indian defence forces would be a complex and time consuming process. For India would need to overcome the sixty years legacy of “lost opportunities and shocking neglect’ to build a self reliant defence production base. What’s more, most of the Indian origin defence equipment continues to feature a large number of imported components and sub-systems. And for long, defence production in India has been synonymous with the units of state owned Ordnance Factory Board (OFB) numbering forty one and nine defence public sector undertakings with private sector playing a very marginal role in the entire exercise. Not surprisingly then, two third of India’s defence hardware requirement is met through imports and India had also notched up the not so pleasant distinction of being the largest arms importer.
The on-going consultation to hike the level of FDI (Foreign Direct Investment) in India’s defence sector happens to be a major initiative of Modi government to expand the scope and sweep of defence production in India. In this context, the Department of Industrial Policy and Promotion (DIPP) is batting for 100% FDI in case of the investing foreign partner willing to make available state of the art technology and 74% in case of the transfer of technology that is not cutting edge. But then a section of the Indian industry advocates the need for capping the FDI in defence sector at 49%. But there is also a view that 49% FDI may not be alluring for global companies to invest in India. It would only sustain the continuation of the status quo situation.
The current level of FDI investment in Indian defence sector is 26% which is said to be far from attractive to foreign manufactures to invest in the Indian venture. After much dithering, in July 2013 the then Indian Government decided that FDI of more than 26% could be allowed on a case by case basis subject to the condition that such a “relaxation” helps India “access modern and state of the art defence technologies.” According to a study by the New Delhi based Stratcore India, the plan to boost the FDI in defence sector could result in the creation of half a million jobs over the next one decade if manufacturing can be managed according to a plan and the government can facilitate collaboration among foreign companies and their Indian counterparts.
The Modi Government going beyond paying lip service to the cause of defence self reliance has clearly demonstrated that it means business - serious one at that - in pushing the country towards the goal of indigenous defence production. In a first step taken in around one month of assuming office, Modi Government has smoothened the road for an increased participation of the private sector industries in country’s defence production infrastructure. To this end, it has announced a relaxation that would no longer require any industrial licence to produce a large number of components and sub systems required in fighting equipment. The new notification issued by the Union Commerce and Industry Ministry makes it mandatory to have manufacturing licence only for heavier battle field systems including tanks, armoured vehicle, aircraft and warships. Further, the control on the dual use items with both defence and civilian applications have been relaxed. According to the notification issued by the Ministry of Commerce and Industry,” it is clarified that dual use items, having military as well as civilian applications other than those specially mentioned in the list would also not require industrial license from the defence angle.” Indeed, at the end of the day the relaxation in the licensing norm could boost the prospects of heavy engineering firm including Bharat Forge, L&T Mahindra, and Walchandnagar Industries which have already forayed into the Indian defence production sector. This landmark decision augurs well for giving a quickening impetus to the task of build a resurgent Indian military industrial complex with the growing participation of the private sector.
“This step is important as it would bring more clarity to the procedures and it will encourage new entrants into the defence sector. The Indian defence industry is already at the bottom of the value chain and there is very less incentive for anyone to set up a defence industry in India,” says Baba Kalyani, Chairman and Managing Director of the Pune based Bharat Forge. Kalyani also happens to head the Confederation of Indian Industry’s national committee on defence.
If the massive outgo of foreign exchange for the import of weapons were to be diverted to support research, development and production in India, the country could easily walk on the road of self reliance in defence production. It was the obsession with secrecy that Indian bureaucracy nurtured all these years that blocked the participation of private industry in the defence sector. Of course, the Indian private sector lacks the technological base and manufacturing infrastructure good enough to turn out high performance, superior quality fighting equipment. This gap can be filled either through public-private sector participation or investment and participation by foreign companies. Further, the Indian private sector comes in very poor light in so far as the investment on research and development is concerned. As such the Indian government should come out with a slew of incentives to encourage investment in research and development to achieve technological excellence in critical areas of defence and aerospace products development.
Currently, much of the investment on defence and aerospace research and development is borne by the state owned research organisations and public sector enterprises. It was a relaxation announced in 2001 by the then NDA government led by Atal Bihari Vajpayee that enabled the participation of the private sector into the Indian defence production matter subject to the condition that they get an industrial licence from the commerce ministry. But then the task of building a vibrant Indian military industrial complex showcasing India’s technological prowess is challenging and daunting.
- See more at: http://www.claws.in/1230/turning-india-into-an-arms-exporter-radhakrishna-rao.html#sthash.o6GBKZfz.dpuf
Taking a cue from the spirited advocacy by Modi of the need to position India as a leading arms exporter - from being a major importer now - Defence Research and Development Organisation(DRDO) has made it clear that there is a huge potential for the export of missiles, fighter aircraft and related defence hardware from India. However, DRDO chief Avinash Chander said that the country would need to adopt a new “policy mechanism” to facilitate the large scale exports of defence equipment. ”We have a list of equipment that includes the Light Combat Aircraft(LCA) Tejas, Akash air defence system, Prahar class of missiles and Indo Russian supersonic cruise missile BrahMos along with a number of systems that can be exported” stated Chander. According to Chander, the biggest advantage that India could derive in the defence export market is the “competitive and affordable price tag” of Indian defence and aerospace products.
All said and done, attaining the goal of indigenous defence production on a large enough scale to meet the demands of Indian defence forces would be a complex and time consuming process. For India would need to overcome the sixty years legacy of “lost opportunities and shocking neglect’ to build a self reliant defence production base. What’s more, most of the Indian origin defence equipment continues to feature a large number of imported components and sub-systems. And for long, defence production in India has been synonymous with the units of state owned Ordnance Factory Board (OFB) numbering forty one and nine defence public sector undertakings with private sector playing a very marginal role in the entire exercise. Not surprisingly then, two third of India’s defence hardware requirement is met through imports and India had also notched up the not so pleasant distinction of being the largest arms importer.
The on-going consultation to hike the level of FDI (Foreign Direct Investment) in India’s defence sector happens to be a major initiative of Modi government to expand the scope and sweep of defence production in India. In this context, the Department of Industrial Policy and Promotion (DIPP) is batting for 100% FDI in case of the investing foreign partner willing to make available state of the art technology and 74% in case of the transfer of technology that is not cutting edge. But then a section of the Indian industry advocates the need for capping the FDI in defence sector at 49%. But there is also a view that 49% FDI may not be alluring for global companies to invest in India. It would only sustain the continuation of the status quo situation.
The current level of FDI investment in Indian defence sector is 26% which is said to be far from attractive to foreign manufactures to invest in the Indian venture. After much dithering, in July 2013 the then Indian Government decided that FDI of more than 26% could be allowed on a case by case basis subject to the condition that such a “relaxation” helps India “access modern and state of the art defence technologies.” According to a study by the New Delhi based Stratcore India, the plan to boost the FDI in defence sector could result in the creation of half a million jobs over the next one decade if manufacturing can be managed according to a plan and the government can facilitate collaboration among foreign companies and their Indian counterparts.
The Modi Government going beyond paying lip service to the cause of defence self reliance has clearly demonstrated that it means business - serious one at that - in pushing the country towards the goal of indigenous defence production. In a first step taken in around one month of assuming office, Modi Government has smoothened the road for an increased participation of the private sector industries in country’s defence production infrastructure. To this end, it has announced a relaxation that would no longer require any industrial licence to produce a large number of components and sub systems required in fighting equipment. The new notification issued by the Union Commerce and Industry Ministry makes it mandatory to have manufacturing licence only for heavier battle field systems including tanks, armoured vehicle, aircraft and warships. Further, the control on the dual use items with both defence and civilian applications have been relaxed. According to the notification issued by the Ministry of Commerce and Industry,” it is clarified that dual use items, having military as well as civilian applications other than those specially mentioned in the list would also not require industrial license from the defence angle.” Indeed, at the end of the day the relaxation in the licensing norm could boost the prospects of heavy engineering firm including Bharat Forge, L&T Mahindra, and Walchandnagar Industries which have already forayed into the Indian defence production sector. This landmark decision augurs well for giving a quickening impetus to the task of build a resurgent Indian military industrial complex with the growing participation of the private sector.
“This step is important as it would bring more clarity to the procedures and it will encourage new entrants into the defence sector. The Indian defence industry is already at the bottom of the value chain and there is very less incentive for anyone to set up a defence industry in India,” says Baba Kalyani, Chairman and Managing Director of the Pune based Bharat Forge. Kalyani also happens to head the Confederation of Indian Industry’s national committee on defence.
If the massive outgo of foreign exchange for the import of weapons were to be diverted to support research, development and production in India, the country could easily walk on the road of self reliance in defence production. It was the obsession with secrecy that Indian bureaucracy nurtured all these years that blocked the participation of private industry in the defence sector. Of course, the Indian private sector lacks the technological base and manufacturing infrastructure good enough to turn out high performance, superior quality fighting equipment. This gap can be filled either through public-private sector participation or investment and participation by foreign companies. Further, the Indian private sector comes in very poor light in so far as the investment on research and development is concerned. As such the Indian government should come out with a slew of incentives to encourage investment in research and development to achieve technological excellence in critical areas of defence and aerospace products development.
Currently, much of the investment on defence and aerospace research and development is borne by the state owned research organisations and public sector enterprises. It was a relaxation announced in 2001 by the then NDA government led by Atal Bihari Vajpayee that enabled the participation of the private sector into the Indian defence production matter subject to the condition that they get an industrial licence from the commerce ministry. But then the task of building a vibrant Indian military industrial complex showcasing India’s technological prowess is challenging and daunting.
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