With mere license production, we cannot attain the goal of self-reliance
About seven years ago, I had an opportunity to visit what was then called the biggest shipyard in India hugging the Arabian Sea. It was huge, almost like a mini township. Everything about the shipyard, from the Goliath crane to the dry dock was described in superlatives — the longest, the biggest, the widest, the tallest, you get the drift. It was truly impressive, more so, because it was in the private sector.
After an exhaustive tour of the yard, I met up with the chief operating officer (COO), who employed even more superlatives to share his vision, which was as expansive as the view of the Arabian Sea. I got a sense that I was witness to something momentous; that India’s ship-building capabilities will soon rival South Korea’s as shipping corporations worldwide would start placing orders here for giant merchant vessels. After all, they offered the unmatched combination of ‘cheap and best.’
Are you going to build a design bureau also to design the ships?
“No,” replied the COO, who shall remain unnamed as will the shipyard because its new master has a propensity of filing defamation cases against journalists. And I will be happier without being slapped with a defamation case in Ahmedabad; yes, that is his favourite haunt for such lawsuits.
Coming back to the COO, he said, no, because, it is cheaper to buy designs off the shelf from Korea or some such place.
So, you wouldn’t be doing any research and development here in terms of new, efficient ship designs etc?
“The focus of (shipyard’s name) is on creating general engineering skills and assets, which are germane to shipbuilding but not exclusive,” he said. “The idea being that (shipyard’s name) over time should become a national asset and not remain just a shipyard.”
The world, being what it is, failed to appreciate the miracle that had been created on the shores of Arabian Sea. No substantive orders were placed on the yard. It eventually had to look to the government of India for support and defence shipbuilding orders. Some came, but not enough. Eventually, the shipyard became insolvent and was bought by its new master. But its fortunes didn’t turn.
In recent news, the shipyard was running so much behind schedule in supplying Offshore Patrol Vessels (OPVs) to the Indian Navy, that the navy encashed its bank guarantees. And in personal news, the shipyard (before being sold to the new master) did not pay FORCE for the advertisement it placed in the magazine. But this is not a personal rant. We have forgiven, if not forgotten it. The purpose of this article is to gently point out that the solution to India’s total dependence on defence imports do not lie in the two magic words: ‘Private Sector’.
In 2001, when the government first took stock of the state of the defence industry in India, as recommended by the Group of Ministers’ report (following the 1999 Kargil conflict), it realised that India’s dependence on imports was primarily because the public sector — comprising PSUs and Ordnance Factories — had not moved beyond assembling semi-knocked down or completely knocked down kits that were procured from the foreign vendors. Despite decades of production, they had imbibed no learning.
Since the tried and the tested had not delivered, the government thought that maybe the untested would be able to lift India’s defence manufacturing from the pit it was crawling in. And that’s when the phrase ‘giving level playing field to the private sector’ started doing rounds. Eighteen years hence, the private sector remains on the periphery of defence manufacturing, and yet untested, even though several versions of defence procurement procedure policies have been produced by the ministry of defence (MoD).
There are several reasons why the government of India has not delivered on its promise to the private sector or, for that matter, the defence industry, but that’s not my case here. I believe the basic premise — that the private sector can do what the public sector has not been able to do — itself is faulty. Look at our neighbourhood.
In both Russia and China, the defence industry is entirely controlled by the government. In fact, when Vladimir Putin first became the President of Russia, one of his major accomplishments was consolidation of the Russian defence industry and bringing it under even greater government control. Ditto in China. Even in Europe, governments hold substantive stakes in the defence companies. In any case, since they finance defence research, they hold the intellectual property rights to the outcomes of the research. To the best of my knowledge, the United States appears to be the only exception. But even there, the US government owns and controls the sensitive technologies, even if they are developed in the private sector.
Clearly, defence industry is sector agnostic. All it needs is sustained investment in research and development to produce effective and competitive wares. This is the most difficult part of building a defence industrial base. Not only it requires money, it needs patience, perseverance and the ability to absorb disappointments. It’s a no-brainer that high technology can’t be bought off the shelf. It has to be developed.
Unfortunately, in India patience has always been in short supply. Instead of focussing on core research in any area and not just defence, most of us, including our scientists, look for short-cuts — buying low and middle level technologies and name-plating them. One only needs to take a broad sweep across sectors from medicine to consumer durables. How many patents do we have? How many peer-reviewed research papers do Indian scholars publish every year? What new ideas and concepts do our thinkers/ strategists put out in the public domain? What is our contribution in inventing or creating technologies for the larger good or advancement of the humankind? Except yoga!
If our private sector has not been able to innovate in other areas, why do we believe that it will be able to do so in defence. Sure, private sector can produce goods with greater efficiencies and at more competitive prices than the public sector. But if the private sector is only going to license produce the goods, albeit, more efficiently, how will that lead to self-reliance in defence?
Obviously, we all have been barking up the wrong tree. Barring just a couple of exceptions, I am yet to come across any private sector company that is investing in research and development. What’s more, most private sector companies are already in the public sector zone when it comes to hiding behind the cloak of ‘sensitive programmes’, because clearly they have nothing to show. All they have are claims; and untested potential.
So, let’s start right. Ownership of the company doesn’t matter. It’s focus matter. And for self-reliance in defence we have to start at the drawing board — publicly or privately.