Defense R&d Will Be Opened To Private Sector For High-Tech Platforms

In the midst of Russian and Chinese belligerence in Ukraine and Taiwan, the Narendra Modi government will soon open defence research and development to the private sector for specific platforms, providing competition to the public sector while ensuring that armed forces requirements are met on time.

The Narendra Modi government plans to approve amendments to the Defence Acquisition Procedure (DAP) at the next meeting of the Defence Acquisition Council (DAC) to allow Indian private sector participation in defence research and development (R&D) through special purpose vehicles and in collaboration with defence public sector undertakings (DPSUs).

According to officials familiar with the developments, the amendments will allow the Indian private sector to acquire a significant stake in Defense R&D companies, which will be established to develop major hardware platforms such as drones, helicopters, aircrafts, and advanced submarines.

Until now, only government DPSUs and laboratories were permitted to conduct defence R&D, with only minor items subject to private R&D. This is consistent with the defence budget, which stated that 25% of the defence R&D budget would be spent on platform-specific SPVs with the private sector.

Given the global upheaval caused by the Ukraine war and China’s belligerence in the Indo-Pacific, India has no choice but to make defence R&D competitive, as the public sector alone cannot meet India’s growing defence platform requirements in the time allotted.

The global defence market is set to face new challenges as countries such as Japan, Germany, Asean, South Korea, and east European countries seek more weapons from the US to deter Russia and China, while the latter reduces exports to meet their own needs.

India has no choice but to develop and manufacture hardware platforms on its own because its main supplier, Russia, is preoccupied with the Ukraine conflict, and it is only a matter of time before a shortage of spare parts affects the Indian armed forces.

While the Defence Research and Development Organization (DRDO) has been developing hardware platforms for decades, the private sector’s entry into defence R&D will provide India with more options for developing stand-off weapon systems such as long endurance armed drones, anti-drone systems, 12-ton multi-purpose helicopters, the next generation of fighter aircraft, and possibly nuclear powered and conventionally armed submarines.

The issue has become more pressing as China has developed armed high altitude long endurance drones such as the Wing Loong 10, which is powered by turbofan engines similar to state-of-the-art US armed drones.

India, on the other hand, is still relying on Israel to upgrade its medium altitude long endurance drones and has no answer to the significant advances made by China, Iran, and Turkey in the development of unmanned aircraft systems.