The government has announced a series of measures to attain self-reliance in defence
It has been an unusually busy summer for the ministry of defence (MoD). On the one hand, since early 2020, the People’s Liberation Army (PLA), which has been carrying out minor transgressions all along the Line of Actual Control (LAC) from Arunachal Pradesh, Sikkim to Himachal Pradesh and Uttarakhand, firmly stationed itself in eastern and south-eastern Ladakh in April.
On the other hand, Kashmir remains volatile, with no let-up in cross Line of Control (LC) infiltration. In fact, violence has been in spate claiming a high number of the uniformed personnel; 81 till August 2020.
Yet, removed from all this, the think-leaders of the MoD have been burning the proverbial midnight oil to present before the nation a winning Defence Procurement Policy (DPP). A policy that would not only give several times more bang for every buck spent, but would also progressively transform India—from the ignominy of being one of the biggest importers of defence equipment to the pride of being among the biggest exporters of defence equipment.
And in the process, create an Atmanirbhar Bharat (self-reliant India) of Prime Minister Narendra Modi’s vision—not an inward-looking or isolationist India, as the Prime Minister explained during his recent address at the Federation of Indian Chambers of Commerce & Industry (FICCI) organised webinar, titled, ‘Atmanirbhar Bharat—Defence Industry Outreach’ on August 27, but a country confident of producing world class defence equipment, for its requirements and those of the world. In Prime Minister Modi’s words, “…To make the global economy more stable, for global peace, and making India a self-reliant country.”
Given the grandiloquence of this vision, the task for those writing the new policy was clearly unenviable. The draft DPP was uploaded on the ministry’s website after the feedback from the stake-holders in March 2020. By early May, the responses had been collated and work on the final policy had begun.
But first things first—rename.
Make in India Is Not Enough
On 28 July 2020, the MoD made one announcement and one admission. The announcement was: ‘The amended draft (DPP 2020) has since been finalised by the Review Committee driven by tenets of Defence Reforms announced as part of the “Atmanirbhar Bharat Abhiyan”. Based on inputs received from the environment, DPP 2020 has now been titled Defence Acquisition Procedure (DAP) 2020’.
The admission was that ‘Make in India’ campaign announced in 2015 has failed to deliver. Evidence of this failure was the scurrying bureaucrats trying to buy war materiel off-the-shelf in the global marketplace following the Chinese aggression in Ladakh.
The DAP 2020 flows from the draft DPP 2020. With this, for the first time, the MoD has given up the pretence of providing level-playing field to the private sector. Just as draft DPP 2020 did, DAP 2020 categorically throws its weight behind the government-owned public sector, led by the behemoth and unaccountable Defence Research and Development Organisation (DRDO). The private sector will, at best, have a collaborative role, with the DRDO as well as the Defence Public Sector Undertakings (DPSU).
To understand this, DAP needs to be seen in the context of government initiatives preceding and succeeding it. At DefExpo 2018 in Chennai, Prime Minister Modi launched the concept of Innovations for Defence Excellence (iDEX). To be pursued under the department of defence production, iDEX is run by a government-instituted Defence Innovation Organisation (DIO), which in turn has created Defence Innovation Fund (DIF). Collectively these acronyms oversee and fund individual or small level innovators, who will be mentored by academic institutions like Indian Institute of Science (IISc), Indian Institutes of Technologies (IITs) etc. To lend a semblance of competitiveness, DIO organises DISC (Defence India Start-up Challenge), in categories like see-through armour, data analytics for air trajectory, unmanned surface and underwater vehicles, artificial intelligence in logistics and SCM and so on. So far four competitions have been conducted, winners announced and felicitated by the defence minister.
iDEX is clearly aimed at individuals, defence start-ups and Micro, Small and Medium Enterprises (MSMEs). The idea is that once an innovation or technology matures to the extent that can be productionalised, it will be bought over by the DRDO or transferred to select DPSUs; in effect, reducing DRDO’s burden of basic research. So that there is no doubt on this score, defence minister Rajnath Singh, at the aforementioned webinar, said that MoD has earmarked Rs 52,000 crore from the capital budget for procurement from the domestic industry. The job of clarifying what the domestic defence industry meant was left to Chief of Defence Staff Gen. Bipin Rawat, who, speaking before Singh, said that projects are being reserved for MSMEs. And government has kept Rs 52,000 crore for Indian industry including the DRDO, DPSUs and MSMEs.
Clearly, the private industry that the government likes are the MSMEs or start-ups, which need government hand-holding more than the big guns. As a result, they are likely to not only remain subordinate to the ministry but the ministry-run public sector undertakings. This is the public-private partnership model that the government is promoting because the DPSUs are comfortable with this. They remain the lead on all projects, including the ones where technology is needed to be transferred from a foreign original equipment manufacturers (OEM). As lead, whatever tech-transfer happens, remains with the government-owned enterprises, which then generously dole out work to the small private sector companies.
A few years ago, chairman and managing director (CMD) of one of the DPSUs, had told me in an off-the-record conversation that the problem with the private sector is that it is in a great hurry. “It wants to build a fighter plane or a submarine right away. It needs to first start by becoming part of our supply chain; do job-work for us. That’s the way to gain experience.” The challenge then, as now, is competition. After years of lip service, the MoD has finally cut it to size.
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