Make In India: Indian Defence Industry – The Road Ahead

By Maj Gen Rajiv Narayanan

25 May , 2016

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The PMs vision of ‘Make in India’ and the thrust being given in the Defence Procurement Procedure 2106 to ‘Indian Designed, Developed and Made (IDDM)’ products is a welcome shift from the decades old concept of licensed production. While laying the foundations for the Indian Defence Industry, via the Ordnance factories and the Defence Public Sector Undertakings, the then PM, Shri Jawaharlal Nehru, had the lofty vision of setting up an Indian defence industry to meet the needs of the Indian Armed Forces with state of art ‘Indian Made’ weapons and equipment. However, the flaw of having ‘licensed production for a captive market’ belied those dreams.

While many foreign companies from the global defence industry have stepped forward by establishing Joint Ventures (JVs) with Indian private industry, it is unlikely that ‘niche’ technology would be available in India soon.

While the current course correction is laudable, there is a need for a calibrated approach to achieve the same. The vision of the then PM and the current PM remains the same – to provide the Indian Armed Forces with state of art weapons and equipment designed and developed in India. While many foreign companies from the global defence industry have stepped forward by establishing Joint Ventures (JVs) with Indian private industry, it is unlikely that ‘niche’ technology would be available in India soon. No country or company would share its ‘niche technology’ since it would impact its uniqueness and its commercial viability.

The existing system, of licensed production and bureaucratic control would need to be modified in a phased manner. At the same time the Defence research and Development Organisation (DRDO) also needs to be re-vitalised to achieve the PMs vision of India being a manufacturing hub and possessing ‘home grown’ niche technology. The extant systems would need to change, albeit in a progressive manner. The changes envisaged needs to keep in mind that the economy of sale cannot be met solely by the Indian Armed Forces, and hence needs to compete at the International level. It is for this reason that the foreign companies expressing their desire to make in India would hesitate to provide their’ niche technologies’ for further development in India. What they would be willing to share would be only meant for Indian market, thus ensuring their share of this global pie is not impacted.

The Indian Private Industries have limited exposure to the defence technologies, having been a license producer to a captive market, and denied any foreign sales till now. Even the academia has been kept away from it. It is this course correction that has now come about, and needs a careful calibration for it to succeed in the coming decades. A close co-operation at all levels to achieve self-sufficiency in attaining an Indian state of art defence industry would be essential, in the form of a public-private-academia enterprise. The need is of self-sustaining collaboration, rather than competition at this nascent stage. The competition would have to be with the global industry, the competition within would come much later.

The DRDO needs to have a very close interaction with the Academia, as also the Industry, to be able to absorb the plethora of existing and developing technologies, and be able to mature it as a usable defence weapon/ equipment within a viable timeframe.

It needs to be understood that the weapon systems and equipment consist of many subsystems, assemblies and sub-sub parts, which contribute towards the system as a whole. Upgrades to these also enhance the technological sustenance of these weapons and equipment. These are the low hanging fruits that the OFs, DPSUs, private industries and the Academia needs to target, to set a strong foundation for the Indian Defence Industry. With the DRDO, OFs and DPSUs having an established line of laboratories, test benches and various facilities, these need to be shared based on the collaborative approach stated above.

As highlighted by Lt Gen (Retd) JP Singh, during the seminar on FRCV on 16-17 May 2016, there is a need for the Govt of India to step in to provide a fair distribution of load by way of ‘lead integrator’, subsystem developer’ assembly developer’ etc. This needs to be done for each weapon and equipment, not just for the production of new generation weapons and equipment but also for the sustenance of the extant fleet, medium repairs, overhauls, life extension programmes and upgrades. These should be judiciously established keeping in mind the respective strengths, capabilities and capacities.

The target should be to develop world class systems, subsystems, assemblies and sub parts and be providers of the same to the global defence industry. This would be the first step towards achieving necessary experience for the development of niche technologies, which should also develop parallel by the DRDO and the academia. The DRDO needs to be revamped, and move away from its desire to commercialise its products by themselves for financial gains. Research is capital intensive, and the auditors must not dictate terms based on a ‘profit and loss’ system. There is a need to accede to the lack of progress in a particular project, change tack with the positives derived from the previous experiments and accept the loss. Monetary loss cannot be weighed against the valuable experiences gained – that which will never be shared by other countries. It would be naïve to expect that companies that have formed JVs with own industries would share their R&D experiences till date. They would set shop here and start as if with a fresh slate.

Rather than a competitive approach between the public and private enterprises in India there is a need for a collaborative approach at this nascent stage within India.

The DRDO needs to have a very close interaction with the Academia, as also the Industry, to be able to absorb the plethora of existing and developing technologies, and be able to mature it as a usable defence weapon/ equipment within a viable timeframe. The DRDO needs to be re-vitalised and restructured into 3 x verticals, as under

Strategic Laboratories dealing with pure sciences, to study existing and emerging technologies and its applicability to the existing weapons and equipment, and for developing new generation of the same, either evolutionary or revolutionary.

Adaptive Laboratories, which absorb the technologies passed on from the Strategic Laboratories or as developed on its own and function in close co-ordination with the nominated lead integrator(s) and the other systems and assemblies developers to develop new generation weapons and equipment.

Convergence Laboratories,which absorb technologies passed on from the Strategic laboratories, or as developed on its own and function in close co-ordination with the OEM(s) for providing life extension programmes and upgrades to the existing weapons and equipment.

Note: – (a) The involvement of the academia and the user interface needs to be in all three verticals.

(b) The sub-verticals under each can be worked out by the DRDO, as per its functional needs.

A welcome shift in focus has been brought in with the PM’s vision of ‘Make in India’ and has given a new lease of life to the Indian Defence Industry. However, the desire for state-of-art home grown technology can be achieved albeit in a phased manner. Rather than a competitive approach between the public and private enterprises in India there is a need for a collaborative approach at this nascent stage within India. There is a need for a ‘phased adaptive’ approach to ensure strong and deep foundations are established for the future.

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