Buying at home

With less money to buy arms, indigenisation is now imperative

Addressing the Combined Commanders' Conference recently, Prime Minister Manmohan Singh bluntly warned the Indian military that the growth slowdown would lead to curbs on new purchases. He said, "While we must take into account the capabilities of our adversaries, we have to plan our long-term acquisition on the assumption of limited resource availability." This is an important and timely warning. It is certainly clear that the military's insistence on foreign purchases has led to expectations that are unaffordable. Consider just the Indian Air Force (IAF): it is understrength at the moment, with only 36 out of 39.5 fighter squadrons ready. Further depletions to the number of squadrons are likely when various ageing MiG-21s and MiG-27s are removed from service in the next few years. But the IAF, in order to make up the deficit, has a shopping list that might total $100 billion (approximately Rs 6 lakh crore) in the next 10 to 15 years. This is clearly unaffordable. The army is in a similar position.

However, the unfortunate fact is that the civilians at the defence ministry have not controlled the free-spending instincts of the military and warned them against the idea of expensive foreign purchases. The prime minister urged "the defence ministry and the armed forces, as also the DRDO [Defence Research and Development Organisation], to build on this experience and urgently review the different Task Force reports that our government has initiated with a view to achieving a higher index of indigenous capability in military inventory production". This admonition is overdue. Indigenisation is the only way out. It is worth noting that this dovetails with a time when the rupee is weakening, which means that imports have become more expensive; and when the government has woken up to the crisis in Indian manufacturing and is pushing various incentives for investment in the sector, particularly in high-tech enterprises. Military development has historically, across countries and decades, created clusters of excellence in manufacturing and research that are exactly the kind of thing that New Delhi's policies are supposed to make happen. Thus, working with the private sector to increase defence production in India satisfies not just defence but also economic imperatives.

While the current government in recent years corrected its poor record in terms of spending on defence, the spigot of funding is about to be turned off thanks to the slowdown. Meanwhile, some at the defence ministry are unhappy at the thought of the defence public sector enterprises being pushed aside by increasing private sector participation; and the military does not believe in anything but foreign purchases. Put together, this momentum means that nothing will change without a serious push towards the private sector. Over the past year, the defence ministry released a sanitised version of its long-term integrated perspective plan in order to give private companies a sense of the military's requirement. But too few actionable items were on the list. To get the private sector moving, the ministry must realise that funding support for risky and expensive research and assured orders for the weaponry so produced will be essential. This will cause defence public sector undertakings and the military to scream blue murder, and will require the defence ministry, in turn, to take a few risks and deal with the inevitable accusations of favouritism. But that is the cost of indigenisation - and of defence readiness in an economic downturn.