View: India needs to shake off its import-dependence in defence

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By Sanjaya Baru

A“peaceful, gain-loving nation,” wrote Alfred Thayer Mahan, one of the great grand strategists of the 19th century, “is not far-sighted, and far-sightedness is needed for adequate military preparation.” This he said of the US of the pre-World War 1 era in which politicians were averse to investment in defence manufacturing, preferring to import instead.

The so-called ‘military-industrial complex’ of the US was built in the inter-war years and helped alter the course of 20th-century history. Much the same can be said of independent India. Of all the ‘major powers’ of our time, India remains the most import-dependent nation with respect to defence equipment.

Of the many differences that presently distinguish what has been dubbed ‘L’Affaire Rafale’ from what was famously called ‘L’Affaire Bofors’ is the changed policy environment defined by the ‘Make in India’ programme in defence manufacturing.

In the mid-1980s, when India mounted one of its biggest defence import programmes — taking defence expenditure to over 3% of national income for the first time after the mid-1960s — there was hardly any domestic capacity and capability to manufacture arms. Over the past decade, that capacity is being slowly built up.

Even so, India remained the world’s largest importer of defence equipment in the period 2013-17, accounting for 12% of the global total, according to the Stockholm International Peace Research Institute (Sipri). Of the top five defence spenders in the world in 2017 — the US, China, Saudi Arabia, Russia and India — the Saudis and Indians are the most ‘import-dependent’.

No country, especially one the size of India and facing the geopolitical environment that it does, can call itself a ‘major power’ with that level of import dependence in defence.

It was a recognition of this shortcoming, combined with the fact of the failure of the public sector to make India self-reliant in defence equipment, and the hope that domestic manufacture of defence equipment by the private sector could help boost the share of manufacturing in national income, that prompted the erstwhile Planning Commission to include defence manufacturing as a focus area in the 12th Five-Year Plan.

Take it Private

The commission’s report, ‘The Manufacturing Plan’ (goo.gl/R3cyB5), stated, “There is a need to increase private sector participation. This needs to be a focus area for this sector.” It then went on to suggest the creation of a National Defence Manufacturing Council, “under the aegis of the Prime Minister’s Office” to ensure that domestic manufacturing “gets due focus and support from the different governmental agencies”.

The arrangement entered into between the governments of India and France for the import, and subsequent domestic manufacture of Rafale fighter jets, must be viewed in this context. For a decade now, ever since ‘Make in India in defence manufacture’ was launched, there has been hardly any progress on the ground precisely because of the way in which the Indian political process and public discourse have paralysed government’s ability and willingness to act. The Rafale agreement and arrangement sought to cut through this maze and move things forward.

By stoking the Rafale controversy for short-term political gain, Congress president Rahul Gandhi may be hurting the long-term national interest of promoting an Indian private sector in defence manufacturing. More worryingly, he may willy-nilly play into the hands of those who wish to keep India import-dependent.

Creating and sustaining a private sector in defence manufacturing is not easy. It is always fraught with the risk of political controversy for the simple reason that it is an industry with only one buyer — the government. A recognition of this fact discouraged even US politicians from supporting the manufacture of defence equipment by domestic industry till World War 1.

American politicians routinely objected to permitting private investment in domestic defence manufacture till they recognised the need for self-reliance given the problem of disruption of naval commerce during war.

Both Communist Russia and China have developed their own domestic defence manufacturing base. India has, unfortunately, not been able to do so mainly because of the inability of the defence public sector undertakings (PSUs) to deliver on orders placed with them.


PSUs Have No Defence


Apart from the inadequacies of the defence PSUs, the indigenisation of defence manufacturing has also been thwarted by powerful lobbies both within the armed forces, and government favouring imports over domestic manufacture.

While controversy is inherent to the business in which there is only one buyer and many suppliers, both local and global, the further progress of ‘Make in India in defence manufacturing’ will depend on how the national political leadership deals with an issue like Rafale. As a responsible political party, Congress must stop hurting the cause of self-reliance in defence and ought to be more ‘far-sighted’.

The writer is distinguished fellow, United Service Institution of India, New Delhi





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