View: India must seriously invest in strengthening its indigenous defence industry


By Milind Deora

New Delhi rang in the new year with a rancorous debate over the Rafale jet deal that rocked Parliament. The spectre of Rafale continues to haunt the country’s political discourse. While the deal itself has undergone immense scrutiny and analysis, it would behove us to move past politics and peek into the heart of the matter — the nature of the defence sector in India. The central and state governments regularly invest thousands of crores in equipment, goods and services from both domestic and foreign companies.

There is nothing controversial or newsworthy about it. Why, then, is defence procurement catapulted into controversy so often?

Evidently, defence is highly politicised in the country. For one, it is a matter of national security and defending our borders from State enemies. Second, the end users of defence equipment are the armed forces, which promptly evoke emotional and patriotic responses. The reason that government expenditure and wastage in, say, technological imports from foreign companies doesn’t become an object of controversy, but the very same things in defence do, is because of how ‘politicised’ the armed forces and defence are in India.

The involvement of foreign governments or companies in defence immediately makes it contentious in double measure. Defence equipment is treated unlike any other good or service. Back in the 1980s, for instance, during the Bofors controversy, India banned middlemen like agents and brokers from the arena of defence procurement. The ostensible argument is that brokers conjure up issues of bribery and other unscrupulous activities. But it remains to be explained what stops companies that manufacture defence equipment, or governments themselves, from indulging in illegal kickbacks and the like.

What, then, can we do to stop alleged defence scandals like Rafale from periodically shaking up the country? It is unlikely in the foreseeable future that the narrative around the armed forces could move towards depoliticisation, or disentangling defence from patriotic emotion.

Homemade Benefit

We must look outwards. A country like the US, for instance, whose defence spending is equal to the next seven nations combined, has scarcely any defence controversy or scandal of this nature. This is because the US has a strong indigenous defence industry, and equipment is not imported, but procured from domestic manufacturers such as Lockheed Martin, Boeing, Northrop Grumman, General Dynamics and Raytheon.

There, the politic rhetoric and patriotic sentiment is that America is building for America’s defence, a legacy inherited from US-designed and manufactured Sherman tanks during World War 2.

Indigenisation is a potential gamechanging solution that India has never earnestly considered. Over the years, we’ve only pushed and facilitated a fragile, sensitive politicisation of the armed forces to such an extent that it’s become a national security concern, because top leadership in politics and the army refuse to be decisive for fear of being embroiled in controversy and scrutiny.

Not only that, but we also end up being heavily reliant on foreign suppliers that help to subsidise the economies of Russia, the US, Israel, France, but not India. We also lose the technological expertise that we could have acquired through indigenous manufacturing, and the spin-off technologies and innovation that often stem from it.

And, finally, we remain vulnerable to explosive scandals. If a domestic supplier like Mahindra or Larsen & Toubro were accused of selling defence equipment at a higher cost, it wouldn’t be a national security concern or political controversy that rocks Parliament or brings down governments. It would simply be treated the same as the company in question selling tractors or cars at inflated costs.

It is, therefore, in GoI’s best interest to seriously invest in the strengthening of our indigenous defence industry, and to re-orient policy and research in a manner that stimulates growth in the sector.

Even in terms of R&D capabilities, India’s Defence Research and Development Organisation (DRDO) is ill equipped to produce the kind of high quality research and tech that’s essential for domestic companies to flourish.

Back in 2006, in an article in the Indian Express, ‘Just DRDO Won’t Do’ (, I had written about how DRDO and the Defence Advanced Research Projects Agency (Darpa), the US equivalent of DRDO, were both established in 1958, and yet hold glaringly disparate track records. While a spinoff technology of Darpa’s work was the internet, DRDO was busy innovating insect repellents.

We’ve come a long way from that. But we have a long way to go in catching up with the kind of R&D capabilities that an organisation like Darpa boasts. What’s also significant is that the US has a robust defence R&D ecosystem outside Darpa as well, which is virtually non-existent in India and which we must strive to ignite.

In Defence of Defence

This is where GoI has truly failed the defence sector. It squandered a historic opportunity to facilitate the creation of a strong indigenous defence industry when it chose instead to splurge thousands and thousands of crores on foreign suppliers like Rafale.

The incumbent government has also failed to support through orders or privatise loss making defence PSUs, when, in fact, privatisation and ‘minimum government’ were their electoral planks.

Regardless of what materialises from the Rafale controversy, then, the biggest tragedy is that we failed to leverage this opportunity and utilise this requirement of the air force to strengthen our indigenous capabilities, improve our technological expertise, build intellectual property, and eventually depoliticise defence and the armed forces in India.

The writer is a former Congress minister of state, information technology and communications

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