Fire Up Defence Industry

Published: 21st February 2014 02:00 AM  |   Last Updated: 21st February 2014 01:27 AM   |  A+A-

The recent Singapore Air Show opened a week after the Indian Defence Expo (Defexpo 2014) ended in Delhi. What evoked interest in Singapore was the CN-235 turboprop maritime patrol aircraft that Indonesia displayed there. Considering the Indonesian defence industry was revived only in 1976 with the establishment of Indonesian Aerospace (IA), this is quite an accomplishment. With IA contemplating manufacture of the South Korean T-50i light fighter, Indonesia may soon have a cheap supersonic combat aircraft to sell to developing states hard up for cash.

Put this development in perspective. The prototype of the indigenous multi-role Marut HF-24 supersonic combat aircraft, the first ever produced outside the United States and Europe, took to the skies over Bangalore in 1961. That project should have led to the emergence of a comprehensively-capable Indian defence industry supplying the Indian military and the rest of the Third World, and as generator of high-technologies to drive the economy. Instead, between a foreign aircraft-fixated Indian Air Force and short-sighted Indian politicians (to wit, defence minister Krishna Menon who decided against sanctioning `5 crore for rejigging the Orpheus-12R engine with reheat the British firm Bristol-Siddeley had produced as power plant for a NATO fighter to fit the HF-24) the Marut was eliminated on the excuse of being “under-powered”. It aborted growth of the defence industry in general, habituated the Defence Public Sector Units (DPSUs) to an endless cycle of licensed manufacture, and turned the country into an arms dependency that can be jerked around at will by foreign suppliers.

Understandably, at the DefExpo the mood was morose in the stalls of the private sector majors, among them L&T, Tata, Pipapav, and Bharat Forge, as well as smaller private firms, all venturing into the high-value military market. The private sector defence industry has, time and again, proved itself in the most prestigious and sensitive indigenous high-technology projects, such as Agni missiles and Arihant-class ballistic missile firing nuclear-powered submarine. They have shown particular appetite for ingesting and innovating transferred technology and for complex designing and production engineering. It is talent the DPSUs seem bereft of in the main because profit-linked survivability is not their concern, even less motive. No matter how incompetent and wasteful, they keep getting showered with mega contracts by the Indian government, forcing the more productive, technologically capable, and cost-efficient private sector firms to make to do with meagre sub-contracts.

The representatives at the Indian DPSU stalls at the DefExpo were, however, all jaunt and puffed-up chests, because continued government patronage has resulted in over-full order-books they are in no position to deliver on. After some 60-odd years one thing is clear: DPSUs simply cannot absorb military technology, leave alone develop new products, and are content with their limited skill-sets of reproducing military hardware by screwing plate A onto plate B as per detailed design instruction sheets provided them. This is the stuff of Meccano sets, which in a bygone era helped young kids put together toy cranes and trucks—the very essence of licensed manufacture. The DPSUs have even ignored the transferred technology available in massive documentation with the ordnance factories (OFs) which, as in the case of the 155mm Bofors howitzer field gun, was collecting dust for 30 years.

Take the case of the follow-on to the Bofors gun. As the preferred option of buying a foreign 155mm/52 calibre towed artillery gun system was not materialising the army is considering a desi alternative. The OFs working with the transferred Bofors technologies have struggled to produce a gun which, alas, has featured many failures, including repeated barrel bursts in test firings, showing up the DPSU capability deficiencies. In the meantime, Bharat Forge bought technology from Elbit, an Israeli Company, fully digested it, introduced its own innovations into the design, and now has a ready artillery piece which it is willing to enter into competition against rival systems produced anywhere, including by the OFs and L&T. L&T, contrarily, decided against full transfer of technology from the French Company, Nester, on the ground that buying expensive foreign technology without a fair chance of selling it to the army makes no commercial sense. India would have long ago rolled out an advanced successor gun system had the Bofors technology been passed on to the private sector even as the OFs assembled this gun from completely knocked-down kits.

The department of defence production (DDP) in the ministry of defence (MoD) is the chief culprit. The DDP sees its remit as protecting the DPSUs, not as growing a national defence industry, which last requires acknowledging the private sector defence industrial assets as national resource. This means that a howitzer gun will not be purchased from the private sector, no matter how desperate the army’s need for it.

How hurtful to the national interest is the official procurement policy may be gauged from the fact that despite the entire fleet of some 1,000  Russian T-72S tanks being currently immobilised owing to suspect gun barrels that have burst with disturbing regularity, the DDP has not entertained an offer (made directly to defence minister A K Antony in 2013) by a big private company to fit the rifled gun barrels it has produced on two tanks on a “no cost, no commitment” basis for rigorous testing. A year later, the DDP is still dithering, willing to risk an army with defanged strike forces than approve testing of tank gun barrels sourced to this private firm lest successful tests lead to pressures to buy them, thereby setting a precedent.

Then again the entire government and military system tilts against the private sector defence industry. The Defence Procurement Procedure the MoD has laboured over is a joke. It is big on extolling “Make and Buy Indian” but in practice provides it cover for doing nothing, least of all actively encourage and incentivise the private sector companies, or enable fair competition between them and DPSUs that the department of defence production and the MoD know the latter will lose. The problem is too many politicians, bureaucrats, military officers, and DPSU personnel are milking this system to accept its radical overhaul.

The author is professor at the Centre for Policy Research and blogs at www.bharat


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