Chasing a Mirage

Under ‘Make in India’ many defence projects have either been stalled or cancelled, none has been completed

Aditya Kakkar

The ambitious ‘Make in India’ umbrella policy that attempted to include manufacturing in several sectors including defence has slowly unraveled in face of poor economic and governance foundations. Countries are hesitant to transfer core technologies and India’s poor enforcement of law is evident in daily battles of land acquisition along with poor infrastructure that has led to an inefficient supply chain of necessary inputs. The ‘Make in India’ policy of the defence sector has seemingly ended even before it began. Since the present government was voted to office, a number of projects have been announced but not a single one has come to fruition.

Make in India

The most recent of the projects to face the axe has been the Rs 32,640 crore programme for 12 new mine counter-measure vessels that were to be built at Goa Shipyard Limited in collaboration with a Busan-based yard, Kangnam Corporation, and was pegged as one of the costliest ‘Make in India’ initiatives. Minesweepers are deployed to secure harbours by locating and destroying mines. The Indian Navy has been struggling to scale up its mine-warfare capability. Its current mine counter-measure force consists of six vessels bought from the erstwhile Soviet Union in the late Seventies while the navy presumably requires at least 24 minesweepers to secure major harbours in the country. The situation is likely to worsen as the existing minesweeper fleet is to be decommissioned between 2018 and 2020.

The Opposition party has also commented on the many cancelled projects. “The government must answer as to who benefits by scrapping a series of defence deals and important projects.” It has also alleged that the armed forces’ demand for defence capital budget is ‘drastically reduced’. “As the Modi government completes 43 months in office, it has become increasingly evident that its directionless policies are harming India’s strategic interests and compromising national security.” The government’s scrapped project will be ‘striking a blow’ to both the navy and its own ‘Make in India’ plans in the defence sector.

The government has listed out numerous Acceptance of Necessity (AON) that it has accorded since 2014. About 148 capital acquisition proposals have been cleared by the government, of which 105 proposals worth approximately Rs 2.33 lakh crore have been categorised as ‘Make in India’. An AON is simply the very first stage of a military procurement and not all of them result in tenders being issued, and most lapse several times due to technical or financial issues. The DPP-2016 has focused primarily on indigenisation with little emphasis on research and timely execution based on the general staff requirements of defence services. The Aatre task force highlighted in its report that the main difference between the commercial bidding process under the ‘buy and make’ category of Defence Procurement Policy 2013 and 2016 and the Strategic Partnership model is that the selection criteria of the latter are based on ‘inherent capacity and ability of the entity rather and not on the lowest bidder principle.’ While this was a welcome change, little has been done on the ground to ensure the success of ‘Make in India’ in the defence sector, especially as our defence imports rise steadily.

The projects that are stalled or have been seemingly put on the back-burner range from future infantry combat vehicles (FICVs), light utility helicopters and Naval multi-role choppers to new-generation stealth submarines, mine counter-measure vessels (MCMVs) and fifth-generation fighter aircraft (FGFA). India may have chosen indigenisation over modernisation as the ministry of defence cancelled the USD 500 million deal for Spike ATGM with Rafael Advanced Defence Systems of Israel in 2017 after price negotiations were already completed. In fact, the cancellation marred the confidence of the domestic defence industry as Rafael had entered into a joint venture with the Kalyani group and even set up a missile sub-systems manufacturing facility near Hyderabad. The decision not to buy the Spike ATGM came around 10 months after the defence ministry appointed a committee, headed by a major general, to examine various aspects related to the deal. In letters to the minister of defence (MoD), the army headquarters had highlighted ‘the operational urgency of the equipment, arguing that the Spike ‘gives a major capability impetus to troops deployed on the Line of Control (LC), especially in the current operational scenario’. A 2014 report pointed out that the Indian Army did not carry enough ammunition, including critical ATGMs, to fight an intense battle for 20 days. Eventually, in October 2014, the Defense Acquisition Council (DAC) picked the Israeli ATGM over the US-built Javelin. In January 2017, former Chief of Army Staff, General Dalbir Singh remarked that acquiring the Spike missiles was part of the army’s modernisation roadmap. Now while the deal stands cancelled, the Israeli Prime Minister has announced that the deal might eventually go through. There is clearly a mismatch between the army’s immediate requirements and the government’s abstruse knee-jerk decisions.

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