Why India does not make arms

Union Minister for Defense AK Antony has spoken of reorienting defense acquisition priorities from foreign vendors to domestic capacity-building as an urgent priority. This is a noble sentiment but unlikely to happen. Deep structural impediments prevent India from developing its own weapon systems in the near to medium term. There is at the outset the issue of strategic direction. The Defense Research and Development Organization is a behemoth with over 50 research labs producing everything from fruit juice — they gave us the Leh berry to Intercontinental ballistic missiles. The delivery of the latter has been promised at a future date; meanwhile you can sip the juice. India imports everything from bullets to aircraft carriers. According to Stockholm International Peace Research Institute, a think-tank that monitors international defense trade, India’s annual arms imports doubled from $1.04 billion in 2005 to $2.1 billion in 2009. It doubled again between 2009 and 2012. India imported an estimated four billion dollars worth of weaponry in 2012, making it the world’s largest importer of defense equipment. While big-ticket items, such as a nuclear submarine leased from Russia or fighter aircraft Rafale under negotiation from France, get all the airtime, the shocking truth is that India is a big importer of mundane items like bullets and even socks and underwear for high altitude regions. What accounts for such utter dependence 60 years after independence? The answer is straightforward. The system for military production and the procedure for procurement have been untouched by reforms. Public-sector firms such as the DRDO and the Hindustan Aeronautics Limited are in a time warp, with an unfettered and unchecked mandate for making weaponry in India. The results have been a disaster. Often, technology transfers are not absorbed as these firms lack the necessary capability to do so. Time over-runs are routine and cost over-runs are a scandal. To take just one example, India’s efforts to develop an anti-tank missile called Nag started with a budget of Rs 380 crore, which ballooned to Rs 1,700 crore. Yet the missile did not pass muster in field trials, with three of the four missiles fired missing their targets in extreme heat conditions. The same pattern repeats from the Kaveri engine which has a cost overrun of 800 per cent and will never fly a jet fighter to the Tejas fighter aircraft (with American engines) that has had more deadlines missed then sorties flown. There is almost no oversight save the Comptroller and Auditor-General’s reports concerning India’s defense production. The conflict of interest is so stark that the chief of DRDO is traditionally the Chief Scientific Adviser to the Prime Minister. Thus, he is in charge of both production and oversight. With that being the case, it is no wonder that defense production in India gets very little by the way of a serious review of its flaws. The failure of Tejas is the most glaring example. Successive DRDO heads backed the aircraft it was supposed to replace — the ageing MIG 21s. But it has yet to be certified. Meanwhile, India has lost precious lives of pilots to technical faults of aging fighters. This blasé attitude of the country’s apex defense production organisation has cost India both blood and money. The reason the Union Defense Minister sounds hollow on developing Indian capacity in armament manufacturing is a report gathering dust since 2007 in the innards of the magnificent citadel of South Block. Named the Rama Rao Committee report, it called for greater participation of the private sector in defense and urged the Government to involve clients — the Armed Forces much more closely while undertaking research and development of weapons. Why this report has not been implemented, is a question only Mr Antony can answer. The recent move to allow 49 per cent foreign direct investment has proved to be a tentative step. The Government has developed cold feet and decided to peruse this policy only on a case-by-case basis. What is more, it has added the role of foreign investment promotion board along with the Defense Ministry. This will only add red tape and discourage investments. It is no wonder that total foreign direct investment in defense in India since 2000 has been only Rs 25 crore. Private Indian firms have acquired critical mass and shown interest in defense manufacturing. Firms such as L&T, involved in India’s nuclear submarine project, the Tatas, Reliance and others are interested in the defense sector. What they lack is proprietary technology. One way of channeling that to India is to allow 74 per cent FDI in the sector. That will reassure global firms to trust India with its technology. Doing so will bring down Indian costs and develop Indian capability. This should be undertaken at the earliest. It’s time the country’s defense sector truly opened up.

PM's China visit let China set the agenda , failed.

The visit by the Prime Minister to China has been a disappointment. India went out of its way not to raise its core concerns and signed yet other confidence-building measure in the Border Defence Cooperation Agreement. If one goes by the media hype, the BDCA will seem like a magic wand that will make the border suddenly much easier to manage. It is nothing of the sort. Both sides have already put in place three such agreements. These were signed in 1993, 1996, and 2003. The latest agreement will not be able to prevent face-offs on the Line of Actual Control, as mistakenly reported by a large section of the media. Those face-offs happen because China has become more aggressive as part of a well thought out policy to demonstrate to India its ability to patrol this vast border and stake ownership on occasions. There are three reasons why the LAC will remain volatile even after this agreement. The first is cartographic and is central to the India-China border issue. Along a large section of the Line of Actual Control, the actual ground position of troops is not defined by the two sides. China has always delayed such definition despite endless rounds of talks since 2005. The second reason why the border will continue to see disputes and transgression is in its topography. At some places the border is situated on ridges and salients that are above 18,000 feet. In such topography, without a mutual understanding of where the border stands, it is impossible to stop transgression. In a stunning reversal for India, the agreement forbids tailing of soldiers in case of cross-border transgressions. By agreeing to this, India has given China a free-run on the LAC. How can a commander on the ground determine where his Chinese counterparts are moving, planning to camp, or staying within India-held areas, without tailing them? This is even more relevant given the fact that on the LAC, the Chinese have a significant advantage of being on higher ground. There is much unhappiness in the Indian Army about this provision. It also shows a dangerous disconnect the decision-makers in the Prime Minister’s Office, the Union Ministry of Defence and their disregard for military input. No military in the world will commit to a situation where its forces cannot do aggressive tailing and border patrols. Without these, it is next to impossible to be warned about any intrusion, let alone undertake counter-measures. The memorandum of understanding on water- sharing also has little substance. It is merely a promise by China to share data with India in the flooding season. The fact that China is building one of the world’s largest dams on the Brahmaputra is left unexplained. In a startling omission, the word ‘dam’ is not mentioned in the entire document. This leaves India high and dry, as there are no means for New Delhi to determine if these dams are run-of-the-river projects or they divert river flow to reservoirs and other water bodies. The visit also failed in a strategic sense. It has allowed China to set the agenda. India was unable or unwilling to even raise issues of core concern. For example, Chinese activities in Pakistan-occupied Kashmir were not taken up. Neither did India flag its concerns regarding China’s brazen disregard for the norms of the Nuclear Suppliers Group which underline its decision to supply two new nuclear reactors to Pakistan. Nor did India take up the issue of trade deficit, which is pegged at nearly $40 billion with China. India has expressed interest for China to invest in the infrastructure sector. This is just talk. There are too many security concerns especially given the proximity of many Chinese firms to Beijing for any meaningful investment to materialise in the Indian infrastructure sector. While some may take satisfaction in the fact that a freer visa regime was held back by India, the Chinese don’t seem to care much. They believe that the Indian side is just delaying the visa regime and does not have the holding power to fold it up. The Chinese may just be right. Indications are that the Union Ministry of External Affairs is already having second thoughts and will sign on the dotted line once things cool down. This visit thus sets a template. It's not pleasant reading that template. China has conveyed to India that this bilateral relationship is set on its own terms. Therefore, what China decides will be discussed and what it finds inconvenient will not be mentioned. India’s foreign office has been exposed as timid and unable to secure Indian interest in summit meetings. When dealing with China, clarity of action is paramount. China knows that it already holds Aksai Chin. It believes that if push comes to shove, it can destabilise India by arming Pakistan. It is also confident that its military superiority across the border from Arunachal Pradesh is a formidable hedge. It has about 3,00,000 soldiers and nuclear missiles as well as 11 landing grounds in Tibet's Chengdu region. The People’s Liberation Army believes a short war can force India’s hand, if negotiating tactics do not work. Hard power is needed to correct this Chinese perception. Time for that is running out. India will do better to look beyond incremental confidence-building measures and concentrate on boosting its military capabilities in case Chinese intentions change over time.