Defence import embargo: Opportunity and challenge for Indian industry

The embargo on imports is planned to be progressively implemented between 2020 and 2024.
Defence import embargo: Opportunity and challenge for Indian industry

BENGALURU: On the morning of January 4, 2001, when the homegrown fighter soared into the clear skies over Bengaluru on its maiden flight, it put to rest any doubts over India’s capabilities to make a state-of-the-art Light Combat Aircraft (LCA). It gave a new dimension to ‘atmanirbharta’, or self-reliance, in defence preparedness as well as manufacturing.Nearly 20 years later, the LCA, which is now part of the Indian Air Force (IAF) fleet, figures on the list of 101 items that the Ministry of Defence (MoD) has embargoed for import. Though many of those items are already made or being manufactured locally, the decision, which is part of the Centre’s push for its ambitious Atmanirbhar Bharat initiative, is expected to give a new thrust to the Indian defence industry.

“It is a step in the right direction to stimulate the Indian defence industry and thereby head towards self-reliance,” said Air Marshal B K Pandey (Retired), former Chief of Indian Air Force (IAF) Training Command, Bengaluru. “Most of the items like the LCA, Light Combat Helicopter, Basic Trainer, Light Transport Aircraft are already manufactured here. What the government wants to do now is not to put unnecessary pressure of competition on local industry by importing. The Services will not be able to initiate cases for import of items in this category.”

The embargo on imports is planned to be progressively implemented between 2020 and 2024. The list comprises 101 items including hi-tech weapons systems like artillery guns, assault rifles, sonar systems, transport aircraft, LCHs, radars and others. According to the MoD, almost 260 schemes of such items were contracted by the Tri-Services at an approximate cost of Rs 3.5 lakh crore between April 2015 and August 2020. Now, it is estimated that contracts worth almost Rs 4 lakh crore will go to the domestic industry in the next five to seven years.

Dr Ajey Lele, Senior fellow at the Institute for Defence Studies and Analysis (IDSA), New Delhi, sees it as a very important step from the Indian industry point of view, as they get huge clarity on where they stand, what they should manufacture and what could be their key areas of focus. “There was a certain amount of ambiguity in the industry, as well as the Armed Forces. Private industry used to think that whatever they invested in, the forces would import the equipment ultimately. Now, there is clarity in the minds of both parties,” he said.For the industry, it will be a huge opportunity as well as a challenge at the same time. 

‘Indian defence industry should rise to occasion’

“Since the government has taken the call, the industry has to accept the fact that if they want a market, they better pull up their socks and start delivering things in time. Everyone understands that there will be some teething troubles,” says Dr Ajey Lele.“Platform technologies are going to be challenging. The earlier we do it, the better it is for the future. Industry will quickly reorient itself to get into the groove and address these issues,” he added.

Dr Kota Harinarayana, former Director, Aeronautical Development Agency (ADA) - known as the ‘Father of LCA Project’ - says the ‘Tejas’ created an ecosystem in terms of development of technology, equipment and manufacturing of components. “That is what makes the country undertake indigenous production of most of the equipment,” says Dr Harinarayana, in whose honour the letters “KH’ have been inscribed on the aircraft. “The LCA is already indigenous; they will not import any lightweight fighters,” he said.

Prior to taking up the LCA project, only Hindustan Aeronautics Ltd (HAL) was designing and developing aircraft. Now, many agencies including ADA, National Aerospace Laboratory (NAL), Aeronautical Development Establishment (ADE) and others, besides a number of private firms, are part of aircraft development projects. “India’s capability and capacity is such that the decision can be adhered to and even (the list can be) expanded,” he added.

“It is a very good decision. The list is small, there are many more items that can be added to it,” concurs Dr C G Krishnadas Nair, former CMD of HAL and Honorary President, Society of Indian Aerospace Technologies & Industries (SIATI).  According to him, Indian industries will be able to deliver quality products without delay, and the cost too will be lower.

HAL can now expedite projects for faster induction into Armed Forces: HAL chief
Hindustan Aeronautics Ltd Chairman and Managing Director R Madhavan said the move to ban the import of 101 defence items gives a major boost to the Indian defence manufacturing ecosystem. “This is positive news for HAL, as all our major platforms, including LCA Mk1A, Light Combat Helicopter, Basic Trainer Aircraft (HTT-40), Fixed Wing Mini UAVs and Transport Aircraft (Do-228), etc, are on the list,” he stated. With assured orders, a large number of Tier-2 and Tier-3 vendors will now come forward to partner with the Indian industry as the products will be exclusively manufactured in India. There will also be greater visibility for small players.

The aerospace ecosystem can be further nurtured and the industry can build infrastructure capability for fulfilling the projects, he said. “HAL can now expedite the projects for faster induction into the Armed Forces and its resources can be optimally utilised. As an industry leader, HAL will further strengthen its role as an integrator, providing impetus to many more aerospace initiatives to build a self-reliant India. It is important that all stakeholders hand-hold and strengthen the Make-in-India drive,” he added.  

Hope for engine project
Certain challenges persist, however, especially in terms of developing a jet engine, as the project did not make much headway even after several years. But experts like Dr Kota Harinarayana, the former Director of ADA, are confident that India will be able to tackle this issue in a few years.

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