Indian media often highlights the criticism voiced against the Ministry of Defence and its Departments of Research & Development, Defence Production and Defence Finance regarding the cost and time over-runs in crucial defence projects.
Sometimes the criticism is motivated by the import lobby. Sometimes the criticism reflects the anguish of the Army, Navy and Air Force regarding depletion in force levels and fears of obsolescence by the time of eventual delivery.1 Sometimes the criticism is directed at the Army, Navy and Air Force for formulating exotic staff requirements based on futuristic technologies culled from foreign brochures. Sometimes the criticism is aimed at the R&D scientists and Defence Production managers for making rosy promises and tardy progress.2
Despite all the criticisms, setbacks, cost and time over-runs and realities, India has made impressive progress in defence R&D and defence production. The determination to keep abreast of new technologies will continue to drive Indian innovation to surmount technology denial regimes.
Sometimes the criticism reflects the skepticism of constitutional institutions like the Controller and Auditor General and the Public Accounts Committee whether public money is being wisely spent. Each has a grain of truth.
This complex jumble of issues is permeated by realities that are unique to India.
Firstly, in the allocation of resources for defence, India’s priority has been, and will remain, socio-economic development and well-being, followed by defence preparedness and not the other way round. Failure of a monsoon will constrain defence allocations. Two failed monsoons, as happened in the late 1980s, will dislocate defence planning.
Secondly, India has been, and will remain, committed to self-reliance for defence requirements but only to the extent that it is cost beneficial to do so or where technologies are not available. Whenever self-reliance is not cost effective or transfer of technology is necessary, India will import.3 The hazards of sanctions and denial regimes will, to the extent possible, be managed by diplomacy and ‘strategic relationships’ to assure life cycle support.4
Thirdly, India has been, and will continue to be, denied access to futuristic defence technologies which foreign countries develop at great cost. India will continue to develop these on its own. In the 1990s, denial regimes stimulated India to develop world class super computers, space rockets and long range missiles. Knowledgeable persons are well aware that time and cost over-runs are inescapable when developing futuristic technologies.
Fourthly, foreign military-industrial complexes canvas for global orders to amortise their cost of R&D and minimise unit cost so as to be competitive in a global market. Consequently, there will always be seductive glossy foreign brochures to attract the attention of those who formulate staff requirements. The import lobby will always be tempted to belittle indigenous R&D and disparage its time and cost over-runs.
Finally, despite all the criticisms, setbacks, cost and time over-runs and realities, India has made impressive progress in defence R&D and defence production. The determination to keep abreast of new technologies will continue to drive Indian innovation to surmount technology denial regimes.
India has dealt with the military-industrial complexes of Russia, the European Union, Israel and South Africa for a number of years. Invariably, defence relationships have been underwritten at Government to Government level.
In the 1990s, denial regimes stimulated India to develop world class super computers, space rockets and long range missiles. Knowledgeable persons are well aware that time and cost over-runs are inescapable when developing futuristic technologies.
During the 1945-91 Cold War between America and the Soviet Union, America and India abstained from a substantive defence relationship. In the 1980s, the Cold War began to wane. Coincidentally, India had started transforming its economy. American industrial corporations began to view India as an attractive investment destination and a promising middle class consumer market – but not yet as a defence market
In the 1990s, a succession of American and European studies began to extol India’s geo-strategic, geo-political and geo-economic potential. India’s democratic secular polity, her non-aligned foreign policy, her aversion to the use of power beyond her borders, her increasingly youthful demographic profile, her educated English speaking engineers and managers, her ongoing economic reforms and her steady economic growth – all these raised their expectations that India could and would assume responsibilities in the North Indian Ocean and on the southern rim of Asia.
After the turn of the century, circumstances coincided to attract the military-industrial complexes to deepen their participation in India’s defence production:
- The recognition by their governments that it was in their interest to strengthen India’s stabilising influence by forming “strategic partnerships”.
- The profits to be made from the impending modernisation of India’s Armed Forces.
- Their acquiescence of India’s insistence on three basic points that would help them when negotiating defence contracts – “Transfer of Advanced Defence Technology”, “Joint Ventures” with India’s private sector corporations and mutually advantageous “Offsets”.
- As regards ‘Offsets’, an offset clause has been introduced for all contracts above Rs 300 crores. Transfer of Technology for maintenance infrastructure to an Indian public or private firm will be applicable where equipment is bought from foreign vendors. In connection with offsets in defence deals, a recent media report stated “Under the new arms acquisition guidelines, all defence deals worth over $ 70 million will be used as offsets. This requires foreign vendors to buy defence or procure other specified equipment locally from Indian suppliers. With the offset clause in place, foreign fighter jet vendors including Boeing, EADS and Lockheed Martin, have shown interest in developing their activities in India. Boeing, (which is offering the F 18 Super Hornet), is setting up a $ 100 million maintenance repair and overhaul facility in Maharashtra. EADS, (which is offering the Typhoon Eurofighter, the French Rafale and the Swedish Grippen), has pledged training and engineering operations. Lockheed Martin (which is offering the F 16 F Desert Falcon) has made its intention clear of partneering Indian companies to meet its offset requirements.” (Tribune Oct 3, 2006)
In step with these developments, India has recognised that its defence sector, hitherto reserved for the public sector, has to be opened for the private sector and that if reputed Indian companies are to be attracted to diversify into defence production, some rationalisation is necessary.