A Stunning Defence Reform – Atmanirbharta from Atmavishwas (Self Reliance from Self Confidence)

A STUNNING DEFENCE REFORM-ATMANIRBHARTA FROM ATMAVISHWAS

(SELF RELIANCE FROM SELF CONFIDENCE)

-Lt Gen Gautam Moorthy, PVSM, AVSM, VSM (Retd)

Sunday, 09 Aug 2020 will go down as a red letter day in India’s history. While the world and India too remained largely hunkered down thanks to the ubiquitous Chinese virus (COVID-19), the Raksha Mantri Shri Rajnath Singh announced what is arguably the most historic reform ever undertaken by India’s Ministry of Defence (MoD). It put out a list of 101 major war fighting equipment, platforms and systems whose imports are to be progressively terminated from Dec 2020 to Dec 2025. These include artillery guns, warships, submarines, aircrafts (fighters, transport & helicopters), wheeled armoured fighting vehicles, radars, sonars, some important ammunition items and even missiles and satellites. There is supposedly yet another ‘negative import’ list due. This left observers hard put to count the systems/platforms left out for future import.

A quick glance at the list indicates that 69 systems/platforms have the cut off date of Dec 2020, 11 with Dec 2021, 4 with Dec 2022, 8 with Dec 2023, 8 with Dec 2024 and 1 with Dec 2025.  A cursory look at the timelines would indicate to the astute observer that these have been drawn up keeping in mind the indigenised content already incorporated into the system.

With this announcement closing the tap on imports, India’s ranking as the second largest defence importer in the world next only to Saudi Arabia will certainly drop much to the relief of its Govt and citizens. Besides saving precious foreign exchange, it will also indicate to the world that India is no longer punching below its weight.

While all this sounds good and is music to the ears of most Indians as it would boost manufacturing, employment and trade, thereby giving a huge fillip to the economy, how this would be operationalised and taken to its logical conclusion of ‘Made in India’ defence products is the question that needs to be addressed.

Besides, there is a lot of apprehension that has been expressed in the media with regard to this announcement. Some commentators have stated that this is nothing but new wine in old bottles as this is simply a reiteration of the policy laid down in DPP-2016. However if one examines that document in some detail, it is seen that this is simply not the case, but a very a logical conclusion of that policy four years down the line.

In the foreword prefacing that document, the then Raksha Mantri, the late Shri Manohar Parikkar, very presciently forecasted this conclusion. He had written, “Hence, the Ministry of Defence (MoD) is determined to treat DPP 2016 as a dynamic and an evolving document and is committed to making improvements based on emerging data and anecdotal evidence, to realize the vision of ‘Make in India’ in the defence sector.” Therefore it is evident that this import embargo list is neither a reiteration of that policy nor something completely new, but is simply a consequence consistent with that policy.

The other apprehension is that India’s military-industrial complex has not matured enough to be standing on its own feet and delivering the goods. This too is fallacious as a number of platforms/systems that are now being manufactured in India is truly a testimony to the level of expertise that has been already been achieved. This has taken place either through tie ups with firms abroad (the strategic partnership model) or through the DRDO route that leads directly to Indian manufacturers.

Going forward, how would this embargo be operationalised is the question that is rightly asked. It is apparent that firstly, India’s defence industry complex, tightly controlled by the Government, represented by the 41 ordnance factories and 9 defence PSUs have now to compete with the private sector and can no longer bank on the armed forces to bail them out with orders whose pricing in many cases is exorbitant, to say the least.

Secondly within the private sector, there is a humongous scope for medium and small scale industries to rise to the occasion by ramping up capacities and building up a huge defence industry base to cater for ancillaries, sub systems and components that would be required if India is going solo and not relying on Government imports.

This leads us to the third important factor which is that the private sector and the corporatised OFB along with the defence PSUs are free to sign MoUs with OEMs abroad to also import critical ancillaries, sub systems and components for manufacture within India with transfer of technology and with proportionate offsets. This single significant step frees the Govt from getting involved in complex negotiations with foreign firms and being compelled to adhering to stringent policies and rules laid down in the Govt Financial Regulations (GFR) and the DPP (Defence Procurement Procedure 2020). Besides, all such manufacturers will also be free to export their products making India a net exporter of defence related products.

The requirement to drastically reduce imports has long been felt but it needed a strong political dispensation and the will to carry it out. The road ahead is not going to be smooth but this single significant step taken by the Govt to wean itself away from imports in this crucial domain needs to be applauded. That it was in the making since 2016 is known. However, it appears to have been pushed through now because of combination of a slackening economy, the deleterious effect of COVID-19 and above all by China’s transgressions in Eastern Ladakh. How this will play out remains to be seen. Be that as it may, what will go down is that this Govt has shown the confidence and courage to bite the bullet to take on this long overdue reform to achieve atmanirbharta from its atmavishwas.

Lt Gen Gautam Moorthy, PVSM, AVSM, VSM (Retd) is a former Member of the Armed Forces Tribunal & a former Director General Ordnance Services.