INDIGENISATION PROBLEMS IN DEFENCE SECTOR

Introduction
1.

It is a well-established fact that no nation aspiring to great power status can

expect to achieve it without being substantively self-reliant in defence production. Indias

domestic manufacturing capacities are still at nascent stage and there is a need to buy
substantial part of its Defence requirements directly from foreign vendors. The situation
is further aggravated by a largely public sector arms industry, lacking the latest
technologies for producing modern arms. Worse still, the DRDO (Defence Research
and Development Organisation) has not kept pace with emerging and new defence
technologies.
2.

Since we attained independence, we have depended on foreign suppliers for our

defence requirements. Irrespective of West or East, we have suffered due to supplier

pressures, denial of spares for political reasons, high cost of spares, delays and lack of
transparency in technology transfer. By not taking proactive steps toward indigenisation
in the early years, by constantly ignoring the warning signs of equipment repeatedly
failing over many years, we have reached an alarming situation.
3.

The Parliamentary Standing Committee on Defences figures reveals that the

army's equipment modernisation is steadily falling. In 2008-09, the army spent 27 paisa
of every rupee on capital expenditure. This fell to 24 paisa in 2009-10; 23 paisa in 201011; 20 paisa in 2012-13 and just 18 paisa in the last two years. Resultantly the armys
ambitious plans to transform from a threat-based to a capability force by 2020 are
being consistently thwarted as a result of process driven MoD breaucracy and the Army
headquarters delays in drawing up credible qualitative requirements. Adding to this are
procedural delays. Getting approvals is a long drawn out procedure entailing clearances
from 18 MoD and related departments/agencies. Consequently, procurements
mandated to be completed in 48 months invariably take twice as long. Even the urgently
needed equipment via the Fast Track Procurement (FTP) route with a 12-14 month
timeline, is rarely ever met.

Armys Modernization Perspective

4.

Mech Forces.

Indian armys mechanised fleet comprises T-72 and T72 M1s

Main Battle Tanks (MBTs), T-90S MBTs and indigenously produced Arjun MKI tanks.
The main issue facing operational efficiency of mechanised forces are two: night fighting
capability and ammunition. In so far as night fighting capability is concerned only the
650-odd Russian T90S MBTs along with indigenously designed Arjun MKI tanks have
full solution night fighting capability. T-72 and T72M1s that form the backbone of 59-odd
armour regiments along with some 2200 Soviet-designed BMP-II infantry combat
vehicles (ICVs) lack night fighting capability. Majority of the T72s await upgrades that
will provide them with either full solution thermal imaging fire control systems (TIFCS) or
third generation partial solution thermal imaging stand alone systems (TISAS) enabling
all weather including night operations. Till date only 620 partial solution TISAS have
been acquired. In terms of armour ammunition there is critical deficiency of anti tank
ammunition; 125 mm armour piercing fin-stabilised discarding sabot (APFSDS).
Indigenous production is held up on account of black listing of Israeli company,
resultantly availability of 125 mm APFSDS including war wastage reserves have
dropped to critical levels necessitating urgent imports of around 66,000 rounds from
Russia at highly inflated prices.
5.

Artillery.

Next major deficiency is that of Artillery, where no new gun has

been inducted in last three decades. The proposal under the Artillery Rationalisation
Plan to acquire by 2020-25 a mix of around 3000-3600; 155mm/39 calibre light weight
and 155mm/52 calibre towed, mounted, self-propelled (tracked and wheeled) and ultra
light weight 155mm/39 calibre howitzers through imports and local, licensed
manufacture have been continually postponed for over a decade. Tenders for almost all
these guns have been issued, withdrawn and re-issued, along with several rounds of
inconclusive trials. Matters have been further complicated by the MoD completely or
partially blacklisting at least four top overseas howitzer manufacturers.
6.

Infantry.

Adding to the Infantrys woes is the shortages of credible assault

rifles (ARs), carbines, ballistic helmets, lightweight bullet proof jackets and night vision

devices. These are largely produced indigenously. Last year the MoD issued a global
tender for 66,000, 5.56 mm ARs for an estimated $ 700 million to replace the locally
designed Indian Small Arms System (INSAS). The eventual requirement for the
proposed AR is expected to be around 2 million units for use not only by the army but
also the paramilitary forces and the numerous provincial police forces in a project
estimated to cost around $3 billion. Other infantry shortages include; close quarter battle
carbines, general purpose machine guns, light-weight anti-materiel rifles, mine
protected vehicles, snow scooters for use at heights above 21,000 feet in Siachen,
390,000 ballistic helmets, over 30,000 third generation NVDs, 180,000 lightweight bullet
proof jackets together with other assorted ordnance including new generation grenades.
7.

Air Defence and Army Aviations.

The bulk of the armys air defence guns like

Bofors L 70s and the Soviet Zu-23-2s and ZUS-23-4s and missiles like the Russian
OSA-AK and Kradvat date back 30-40 years and need replacing. The Army Aviation
also faces similar shortages. There is an urgent need to replace obsolete aviation
assets like the Chetak and Cheetah helicopters.
Indigenisation Nuances
8.

The major issue that emerges is how will the army get out of the vicious cycle of

delays in procurement, and get its modernisation plans back on track. Is it feasible to
undertake an all encompassing procurement backed by indigenous production taking
the transfer of technology (TOT) route? What are the likely constraints? The problem
faced by government in the defence sector can be summarized as below :(a)

Research and Development. The research and manufacturing capabilities

of the DRDO are embarrassingly poor. Moreover the DRDO has not kept pace
with emerging and new defence technologies. Saddled by the problem of utterly
slow bureaucracy and inordinate delays in decision making and progress of
critical defence research programme. Also it is facing huge shortage of skilled
manpower and infrastructure such as advance labs. There is also a need to

reform the recruitment procedure to strengthen manpower in such organisation

along with higher budget allocation for R&D.
(b)

Slow and un-moving acquisition process.

The defence acquisition

process of critical military hardware has been distressingly slow and

unresponsive to the need of the time, locked motionless at the bureaucratic level
in the defence ministry, worsened further by delayed supply of ordered military
equipment

and

escalating

costs

than

estimated

before.

There are major gaps in targets, responsibility and accountability.

(c)

Budgetary Support.

The Defence Budget for 2014-15 has an allocation

of Rs. 2, 29,000 crores ($38 billion) an increase of 12 per cent over the previous
years allocation. The capital outlay is Rs.94, 588 crores ($15.7 billion), and the
remaining allocation of Rs. 1, 34,412 crores is the revenue outlay. The sub
allocation of capital outlay to Army is Rs. 20, 655 crores, Navy Rs. 22, 312
crores, Air force Rs. 31,818 crores, DRDO Rs.9298 crores and modernization of
Ordnance Factories (OFs) Rs. 1,207 crores. While the figures might look
impressive it needs to be noted that fairly large amount of capital outlays get
consumed by committed liabilities leaving fairly modest amounts for new
procurements.
(d)

Diplomatic Efforts.

The diplomatic efforts so far have been unable to

persuade countries like the U.S and France to share and sell their cutting edge
technology. The upper cap of 49% in FDI in defence sector has been unable to
generate sufficient enthusiasm and interest among major foreign defence players
to share their technological knowhow. Lack of properly framed defence policy
and likely hurdles in acquisition of land for defence purposes further complicates
the problem.
Way Ahead: Defence Equipping Model
9.

In order to promote greater understanding and transparency on issues of

common interest in the field of Defence modernization there is a requirement of

enhanced integration amongst MoD, the User Agency, R&D and Defence Industry. The
Defence equipping model needs to incorporate following changes to augment the
present equipment capabilities:(a)

Formulation of Policies and Requirement.

The first and foremost step in

the equipment management system is the formulation of policies and

requirement. The policy makers have to think

well ahead on the needs of

defence forces in the desired time frame to improve the capability of current
equipment or to produce new capability and to ensure that the concept is
converted into effective hardware in an efficient manner. Major equipment
system takes 10 to 15 years for development and has an in service life of
approximately 25 to 30 years, with mid-life overhaul. The equipment policies
therefore needs to be conceived in long-term perspective of 30 years or more.
The existing Perspective Planning Directorate can be reorganized for this
purpose. Major equipment policies needs to be governed by the following
factors:(i)
(ii)

Possible threat to the nation (both quantitative and qualitative)

Advances in operational, scientific, technological and industrial

research.
(iii) Technological advancement in other countries.
(iv) In-service experience.
(v) Obsolescence of existing weapons.
(vi) Recent / Futuristic procurement by neighboring countries.
(vii) GDP growth rate and Armys share in it.
(b) Formulation of General Staff Policy Statement (GSPS). Based on the long
term concepts, requirements of weapon and equipment upto and beyond 25
years needs to be determined in relation to the appreciation of likely military
threat during this period. It will serve as a policy guide and ready ref for all

concerned. It will also guide procurement action and disposal and scientific
research and development.
(c)

Formulation of Service Qualitative (SQR) Requirement.

Once the GSPS

is formalized, the user arms/ directorate needs to be assigned to formulate the

GSQR. There is a need to understand that SQR forms the building block on
which the complete edifice of equipping system is based. Following needs to be
emphasized while preparing the SQR:(i)

Services HQs should prepare and forward only operational

characteristics of the equipment to thought, ie mil characteristics

pertaining primarily to the function to be performed by the equipment
either along or in conjunction with other equipment.
(ii)

Defence Acquisition Council (DAC) under Def Ministry should

deliberate upon the case to decide on make or buy approach and then the
case be returned to service HQ to Qualitative Performance Requirements
for Purchase (QPRP) for buy cases and Qualitative Performance
Requirements for Development (QPRD) for make cases respectively.
(iii) In buy cases, QPRP be forwarded to Acquisition wing.
(iv) In make cases, the service HQ forwards QPRD to DRDO which
should have Research Oversight Committee (ROC) to analyze QPRD.
(v) The case be progressed by DRDO who define Tech Specification (TS)
of the equipment.
(vi) SQRs for equipment to be procured should be based on the equipment
in production in the world market while SQRs for indigenous development
should be based on the current level of technology, research proficiency
and the time frame assigned.

(d) Nurturing of Nascent Defence Industry. In order to have a strong foundation

of defence industry the Govt of India needs to provide certain concessions, these
include :(i) Concession in Licensing of Defence Industry.
(ii) Assistance in Capital building.
(iii) Financing of R&D in Defence equipment.
(iv) Provisioning of land for industrial base.
(v) Export of finished defence equipment to friendly countries with Govt
approval.
(vi)

Assurance to foreign companies for investment in Indian Defence

Sector.
(e)

Organisation for Quality Assurance and Inventory Management.

While

the equipment is under user trial it is important that it undergoes various stages
of reliability check. The same needs to be implemented at all levels. With coming
of new technologies new equipments are getting added to the inventory making it
bulkier. There is a need to understand Inventory Management from firms like Big
bazaar, Flipkart and Reliance mart so as to streamline store handling.
Conclusion
10.

A loosely articulated idea of making India a defence manufacturing hub cannot

work unless it is backed by a comprehensive blueprint, efficient procedures, meticulous

implementation, trained and responsive manpower, continuous monitoring and quick
decision-making. MoD will have to do something about all this, especially its decisionmaking structures and processes and put in place a system of free and frank dialogue
with the industry without whose active support it cannot realize the objectives of
Indigenisation in defence sector.