Defence contracts are traditionally bagged by India’s defence public sector units which have failed to raise their industrial standards. The shift to private industry that can pool better talent could make a profound difference. Another critical task for India is to write stringent contracts with fail-safes and necessary instruments to implement them.
India’s military history, impending threats across the borders and fluctuations in the strategic stability of regional political order requires it to be duly prepared for potential military aggressions. India’s military equipment needs to be modernized if it were to deter and win these wars. India’s own defence manufacturing industry so far has been unable to produce high-end platforms except sub-systems. This forces India to rely on foreign suppliers who can furnish these platforms in fly-away condition but at a high cost to the exchequer, sometimes leading to cancellation of tenders.
The ‘Strategic Partnership’ policy is aimed at supporting the growth of India’s defence manufacturing capability by tying the country’s commercial defence companies with foreign original equipment manufacturers. It could help India procure high-end defence technologies, manufacture and assemble systems in the country as well as export them to emerging defence markets. This strategy will not only save foreign reserves but also creates high skilled jobs in the country. Indigenous defence manufacturing is expected to be the biggest contributor to Make in India programme, expanding India’s economy.
The P-75I submarine programme will be the first project offered under the Strategic Partnership policy. It is a ₹60,000 crore project to procure six advanced diesel-electric submarines with air-independent propulsion to bolster India’s submarine strength. Larsen & Toubro and Reliance Defence will compete for strategic partnership role. Russia’s Amur 1650, Germany’s HDW Class 214, Spain’s S-80 and France’s advanced Scorpene submarines are all leading contenders for the project.
Germany had earlier supplied four Shishumar class diesel-electric submarines to India with two of them built at Mazagon Docks. France is building six Scorpene submarines at the same docks for India’s P-75 programme with the first submarine undergoing sea trials currently. It is offering advanced Scorpene design for meeting P-75I requirements which should also be made in India.
In addition to dwindling undersea capabilities, India is facing severe shortage in its fighter jet capabilities. India purchased 36 Rafale fighter jets from France in flyaway condition to immediately plug-in critical shortage of planes in the Indian Air Force. However, the planes
come at an exorbitant cost of $8.8 billion. The Indian Navy is also looking at prospective fighter jets for upcoming aircraft carriers. Strategic Partnership policy should be leveraged for acquiring India-grown and India-built fighter jets with assistance from foreign original equipment manufacturers, particularly France, Germany and Russia.
Helicopters is another critical area India’s armed forces are facing capabilities shortage. The vintage Chetak and Cheetah helicopters needs to be replaced if India were to maintain its military dominance across the mountain ranges, plains and high seas. Even as India is negotiating procuring Apache and Seahawk helicopters from the United States, it was able to sign a deal with Russia to produce 200 Russian Kamov Ka-226T helicopters in India.
However, Kamov helicopters that will be made in India (140) are estimated to cost about 2.5 times the ones built in Russia (60) under this deal. The Rafale and Kamov deals demonstrate high costs involved with direct procurement and Make in India routes respectively. Therefore Strategic Partnership policy should be capable of raising minimum technology and production standards in India to lower the cost of weapons procurement as well as improving export potential of India’s defence equipment.
Prime Minister Modi’s recent trip to Europe and Russia is significant in this context. Spain and India intended to deepen defence cooperation under Make in India initiative including exports to third countries. Germany has been promising defence manufacturing under this initiative during bilateral visits but within government-to-government framework. It is leading a campaign to pitch Eurofighter Typhoon fighter jets for India.
France is capable of transferring its Rafale production line to India only if it receives orders above 100 planes. However, India has shifted its focus to acquiring single engine fighter jets for the Indian Air Force, one of the four platforms in Strategic Partnership policy. Both Typhoon and Rafale are twin-engine platforms. Even as Russia has been forthcoming in selling its defence equipment to India, quality assurance and availability of spare parts remain hurdles to deepening cooperation.
Even as India has made commitments with these European countries and Russia to deepen defence cooperation, high cost of foreign equipment and transfer of technology continue to remain fundamental obstacles. On the domestic side, fewer than selected Strategic Partners
possess credible mechanisms to absorb high-end defence technologies and experience with manufacturing military platforms.
There are urgent requirements that needs to be fulfilled for India’s military to maintain credible deterrence even as Make in India requires high determination in the initial stages. Therefore, a consolidated plan should be put in place where manufacturing process could gradually shift from foreign country to India.
It requires India to commit to a minimum number of platforms enabling the Strategic Partner time and resources to raise standards of its production facility. Its foreign partner while assisting Strategic Partner could also fulfill its obligations to provide some employment in host country as well as assure itself of the financial benefits of transferring technology.
This is not a new mechanism but a familiar process between India and Russia. However, these contracts are traditionally bagged by India’s defence public sector units which have failed to raise their industrial standards. The shift to private industry that can pool better talent could make a profound difference. Another critical task for India is to write stringent contracts with fail-safes and necessary instruments to implement them.
Even as Prime Minister Modi successfully pitched Made in India defence manufacturing to Europe and Russia, its success is dependent on policy innovation and implementation, talent of private industries and transparency.