The search for defence atmarnirbharta

The phrase that characterises this new world is weaponised interdependence. Such weaponisation comes more easily to those in control of the main nodes of the global economy, giving them coercive power. One could even think of panopticon situations (the usual example being a single guard in a circular prison who can watch all the inmates). Think the SWIFT interbank communication system. Equally, they could offer choke points for coercive use. Choke points can also be points of vulnerability--think submarine cables which, if cut, could cripple an adversary for a while.

For a middle power like India, such a world is more complex and offers many new challenges, and only imperfect answers or solutions. In the spirit of atmanirbharta,  can India hope to ensure its security and sovereignty in such a world by producing all that it needs--as Bessent asked? Think of the major weapons platforms and technologies that are currently imported. Or not rely on others for critical inputs--something that even the major powers don’t attempt? Most obviously, what price strategic autonomy when 90 per cent of the country’s oil and half its gas needs are imported? And what price sovereignty in the face of penal tariffs and arbitrary trade sanctions?

It is obvious that the goal in such a world has to be not just economic efficiency and competitiveness, and must include the issue of vulnerability and ways to minimise it--without paying too great a price through higher costs that localisation often imposes, affecting competitiveness. Hence the current attempts at domestic chip manufacture and the setting up of data centres. Yet interdependence is written into the scenario and must be dealt with.

The asymmetric conflicts in Ukraine and Iran pose their own urgent questions for the economy. Hundreds of missiles and drones (offensive and defensive) have been fired in a day, for days on end, in both theatres. Can India hope to develop such a supply capability, given its limited manufacturing base, or (as a more sensible alternative) turn civilian industrial units to military use in short order?

Ukraine has also demonstrated the impossibility of territorial gain as an objective, with kill zones effectively freezing the line of conflict. Does that render futile the traditional approaches to armed strength, which eat up much of defence budgets? And Sindoor made clear that wars now are fought in the cyber-physical world. What are the capabilities needed to handle such conflicts? To what extent do we have them?

Sensible policies can always provide answers. India could become an electro-state, for instance, by copying China’s example to reduce oil dependence, and multiply storage capacity in order to insulate against supply shocks. China can store more than four months’ oil requirements, whereas India’s strategic reserves are for barely 10 days. When availability can trump price in a critical agricultural input like fertiliser, sensible policy can serve to boost the domestic production of an item that does not after all involve rocket science.

India has always been wary of international dependencies. Especially in defence, space and atomic energy, it has sought from the beginning to build national capabilities, and to be self-reliant. There are some impressive success stories to show for this in the defence arena: the nuclear-powered submarines, for instance (though Russian help has been critical). And the multi-pronged missile programme. A layered air defence system that showed its mettle during Operation Sindoor. Mobile howitzers for the artillery have been developed by the Armaments R&D Establishment in partnership with Kalyani and Tata. Some aspects of electronic warfare capability constitute another success story.

The risk is that over-reach can result in failure, or unaffordable delays (which in defence is the same thing). Over-reach explains why many attempts at self-reliance in defence have failed, such that the country is the world’s second largest importer of armaments (next to Ukraine). Major weapons platforms that the country needs are still being imported. On the immediate buy list are 114 Rafale multi-role aircraft from Dassault Aviation for about $28 billion and six conventional submarines from ThyssenKrupp for about $8 billion, while delivery is awaited of 31 heavy-duty, high-altitude MQ-9B drones, ordered with General Atomics for $3.5 billion. These forbidding price tags are for weapons that will be delivered over a few years, but it bears pointing out that India’s total defence capex for this year is just $23 billion. Imported weapons tend to be far more expensive than indigenous substitutes, when these are developed.

Moreover, the world sends periodic reminders about supply vulnerabilities. The gas turbine engines that have powered the navy’s main fighting ships have traditionally come from Ukraine, now consumed by war; fortunately, Bharat Heavy Electricals has been producing gas turbines for the frontline warships. But supply of the S-400 air defence systems has been interrupted by Russian preoccupations. And Hindustan Aeronautics can’t turn out the 180 Tejas fighters that the air force desperately needs because (among other things) the engines have to come from General Electric, which has delayed production because (again inter alia) a South Korea supplier of components has gone out of business.

Ambition is as ambition does. The import dependence is because too many plans, goals and targets have come unstuck. The dependence on General Electric engines for Tejas is because the domestically developed Kaveri engine didn’t measure up, but the Tejas has had other issues as well, such as with missile firing and radar integration. The army’s demanding specifications for an infantry rifle (such as inter-changeable barrels that use bullets with different sizes!) proved too complicated to deliver, resulting in large-scale imports--but not of guns with inter-changeable barrels. And the NavIC (Navigation with Indian Constellation) satellite-based system that was to be a regional substitute for the US’ GPS (Global Positioning System) is non-functional because of a shortage of operational satellites and the failure of an atomic clock. This, more than a quarter-century after Kargil 1999 underlined the need for such a system.

Indeed, it could be the old cry of a kingdom for a horse, as destroyers have been commissioned without towed-array sonar, and submarines patrol under water without heavy-duty torpedoes. Claims of domestic development have been known to block imports, or international suppliers get blacklisted (bribery being a seemingly inalienable part of the defence industry), so that the navy gets neither imports nor domestically produced substitutes.

The critical need is for realism on what the country can sensibly do on its own (and deliver at cost and within deadline), while being a part of international consortia where it can’t. As an example of the latter, would India have been better placed if it had stayed as a partner in Russia’s Su-57 stealth fighter programme, especially now that China has developed its own stealth fighter, the J-20? 

The encouraging development is that policy changes may work to improve on the past record. Targets have been set for increasing the share of domestic supplies in defence hardware acquisitions. The private sector has been invited to get into the armaments business, and foreign investment rules have been liberalised, allowing 74 per cent foreign ownership under the automatic route. Government research laboratories have been encouraged to seek out production partners from the private sector, while funding is on offer for start-ups through the IDEX (Innovators for Defence Excellence) programme, launched in 2018.

The results are noteworthy. Domestic defence production has quadrupled in the last 12 years, to Rs 1.78 trillion, with private output contributing a quarter of the total. Discounted for inflation, production in real terms has probably doubled. Defence exports have grown faster, from next to nothing to Rs 38,300 crore. The ratio of defence exports to imports is now better than it has ever been, at about 1:2, though admittedly estimating imports is difficult since even indigenous manufacturers rely on imported inputs. Still, groups like Tata, Adani, Kalyani, Mahindra, Godrej and Larsen & Toubro have ventured into or increased their focus on defence manufacture, turning out howitzers, drones, missile components, combat vehicles and transport aircraft.

That said, the biggest defence suppliers are still the legacy players in the public sector. That is to be expected, given their long years of experience and established capabilities. So the three Indian companies that feature in the world’s top 100 defence manufacturers are all state-owned: Hindustan Aeronautics, Bharat Electronics and Mazagon Dock Shipbuilders. Other government companies remain critical players, like Bharat Dynamics for the missile programme, while Bharat Heavy Electricals makes marine gas turbine engines to replace the old Ukrainian suppliers.

But it’s no longer all government. Larsen & Toubro has invested in an ambitious ship design centre as well as two shipyards. Tata is partnering Airbus to assemble the C295 transport aircraft. Godrej, meanwhile, is focusing on the demanding task of developing aero-engines. Kalyani is into howitzers. And the navy is funding Kirloskar to make marine diesel engines.

The critical frontier to cross is progression from licensed manufacture using someone else’s blueprints and critical parts (which translate into limited autonomy) to developing indigenous weapons platforms. HAL has assembled hundreds of Sukhoi fighter aircraft but cannot make one on its own, unlike its Chinese counterparts that moved on from Soviet collaboration to indigenous aircraft development. This is why the Tejas programme has been important, and the fact that HAL is unable to produce the planes ordered by the air force has led to a severe shortage of fighter squadrons. This failure may explain why the company has been left out of the short list for who will make the advanced medium combat aircraft; three private consortia are in the running. They have no prior experience and will have to depend on international partners. Whether this leads to genuine indigenous capability remains to be seen, especially since significant investment will need to be made in research and development, always a weak point for Indian industry.

Most countries that have built defence industries have done so on the back of a broad industrial base, supported by technological strengths. India is an exception because its manufacturing sector is stunted, and it has strictly limited R&D in just a handful of sectors, almost none of it in the private sector. The share of manufacturing in GDP remains broadly where it was three or four decades ago, and the products are mostly not cutting-edge. The software service companies enjoyed 30 per cent profit margins but still did not invest in artificial intelligence that now threatens their core business.

The attempt to build sophisticated defence manufacturing units despite the broader manufacturing and technological limitations is therefore unique, and beset with challenges. Mazagon had to wait till the Steel Authority of India was able to make the high-strength steel needed for submarine pressure hulls, as also the hulls for capital warships. Limited budgets also mean that project lead times are long, and often a product is obsolete by the time it is ready. And in defence, unlike in the civilian world, there is no room for the second-best, nor of waiting when a war breaks out. Over and above the inadequacies, the crucial skill that seems to be missing is effective project management that focuses on what is doable, what needs to be bought out, and the ability to call a halt to something that is not working so that more resources are not wasted.

One of the issues in the last decade is that the government has not found it possible to provide more generous defence budgets, despite the deteriorating security situation. Given India’s manifest shortage of fighter aircraft and its ageing submarine fleet, senior service officers talk of a more challenging military balance with both Pakistan and China. Yet India’s defence spending is just 2.1 per cent of GDP, when the global average is 2.5 per cent, and security experts have said India’s should be 3 per cent. The difficulty is that defence already accounts for a fifth of non-interest government expenditure. There is nothing that helps defence budgets more than a rapidly growing economy.

Yet, budget limitations may not be as much of a constraint in the future as they have been so far, given the asymmetric David-Goliath scenarios in the conflicts between Ukraine and Russia, and Iran and the US. Most importantly, can India afford to invest less in expensive platform weapons, and focus on cheaper missiles and drones that are cost-efficient counters to those expensive platforms--and manufacture them in large enough numbers? If drones are re-defining modern warfare, is an imbalance in the numbers of tank regiments or frontline warships less of a decisive factor in a conflict?

The difficulty is that drones come with their own questions. India has ordered the expensive MQ-9B Reaper drones from General Atomics, but the US lost no fewer than 45 of them (costing about Rs 1000 crore each) in its war with Iran. The government has recently ordered 840 kamikaze drones from Tata and the Pune-based Nibe, but how immune are they to jamming, or to defensive strikes? It may boil down to firing attack drones (including long-range ones) in sufficiently large numbers so that at least some get through defensive walls. In turn, the critical defensive abilities will be to jam incoming drones’ navigation systems and to neutralise them before they strike. It is essentially a technology game in a rapidly developing field, and smartness can trump budgets.

Does that mean India needs to worry less about Chinese tanks massed across the Line of Actual Control in Aksai Chin, or fret less about China deploying its new stealth fighters, or not pay much attention to the strengthening of the Pakistan navy? Intuitively, the answer is that the country should continue to build its conventional defence capabilities. Also, countering weaknesses against high-performance weapons systems can be done by deploying greater numbers (swarming), using techniques that render the superior system ineffective, and making better tactical use of even inferior systems.

It would be nice to be able to hedge against all bets, but budgets come in the way and choices have to be made. Ukraine has shown how creative it can be, and surprised the world. Ultimately, it depends on how well India has mastered the rules of drone and missile warfare, and how effectively it marries tactics and technology to make up for any deficiencies in the traditional weapons of war.

(This is an expanded version of the author’s essay published in the September 2026 edition of Blueprint.)