Defence Industry

‘SAGARA MANTHAN’: Make in India Transition
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Issue Vol. 31.2 Apr-Jun 2016 | Date : 13 Jul , 2016

‘Sagara Manthan’ or the churning of the ocean of milk, is a story mentioned in the Bhagavata Purana, the Vishnu Purana and the epic Mahabharata. The story relates to the ‘Devas’ (Hindu Gods) seeking the help of ‘Demons’ (Asuras) to churn the ocean of milk, thereby partake in the ‘Amrita’ (ambrosia) to make the ‘devas’ immortal and regain their lost kingdom. However, in it is hidden symbolism and great spiritual lessons. Spirituality or self-transformation is a churning process which requires the integration of both the negative and the positive aspects. Symbolically it represents the spiritual endeavour of humans to gain immortality or liberation (moksha).

As the dust settled over the remote and dusty plateau at Naqueri Quitol in Quepem Taluk in South Goa after all the structural remnants of the DefExpo 2016 were cleared, the questions doing the rounds revolved on what was achieved at the Expo. Besides having visited an area of Goa which one would never venture to as a tourist, and listening to the much touted figure of 1,055 companies from 47 countries that registered their entry making it the largest Expo in Asia, there was little in terms of business generated. It was reported that only a clutch-full of Letters of Intent (LOI) or Memorandum of Understanding (MOU) were signed. Similarly, few prospective future agreements were signed at the Business to Business (B2B) meetings too. As reported, “No real orders were signed that would give an estimate to assess actual worth of hosting such B2B or Government to Government (G2G) meetings.”

The Defence Procurement Procedure (DPP) 2016 was released on the net and was flagged by the Defence Minister in his many interviews. He is quoted to have said, “DPP is not going to be a game changer. The mindset is going to be the game changer….The government is proactive in promoting ‘Make in India’. ‘Start Up India’ can be a big contributor in the defence sector.”

The DPP 2016 is actually a document designed to facilitate the process of ‘Make in India’ in the defence sector.

There is no doubt that India cannot stake claim to great power status if sixty per cent of its state-of-the-art defence weaponry is imported. Why is state-of-the-art technology not available in India? Probably because India was content with importing defence-related equipment linked with Transfer of Technology clauses. The powers that be concentrated more on devising elaborate rituals in the acquisition process than on embarking on the difficult task of building up indigenous capability.

After World War II, Japan and later China, at the commencement of its Four Modernisations programme did not consider it unethical to either reverse engineer imported equipment or steal blueprints to develop their own capability. Obviously, the governments were partners in this. In India, for the Government such thievery must have been anathema. Nor, probably, were the Defence Research and Development Organisation (DRDO) and the Defence Public Sector Units (DPSU) motivated to indulge in this even for the sake of the nation. ‘Make in India’ is actually the first meaningful attempt to bring about a paradigm shift in the scenario.

The DPP 2016 is actually a document designed to facilitate the process of ‘Make in India’ in the defence sector. Some of the salient inclusions deal with the categorising of the source of procurement. The existing ‘Make’ has been further broken up into ‘Make I’ and ‘Make II’. The former would receive government funding up to 90 per cent which would be released in a phased manner. The latter, however, will be funded by the industry. ‘Make II’ would involve the “development of a prototype of the equipment or system or a sub-assembly or assembly components with a focus on import substitution for which no government fund will be provided for prototype development purposes.” Industry has a problem with this. Securing government funding will again give ‘discretionary’ powers to the Ministry of Defence. It will be naïve to expect that the deals will all be open and transparent. The ethos of reserving ‘discretionary’ powers with the government has been the main agent provocateur for corruption and lends itself to crony capitalism.

Micro Small and Medium Enterprises (MSMEs) find it difficult to cope with such pressures. A case that came to light relates to the Indian Air Force, which surely after due sanction and approval for processing placed an order for armament related equipment to be fitted on the Jaguar. The equipment was produced, then tested and certified by the Regional Centre for Military Airworthiness (RCMA). However, no order has been released to buy the equipment for over two years. The MSME was initially paid Rs 10 lakh. Similar was the fate of an order of ‘synthesizers’ which was abandoned midway even though the requirement was graded as ‘Critical’. MSMEs are not cash-rich and feel constrained in complaining to any authority as that would virtually get them on the ‘blacklist’. This will hardly encourage the MSMEs to come forward to initiate any deals involving defence requirements.

The issue of Intellectual Property Rights (IPR) protection is another of the vulnerabilities faced by the MSMEs. It takes a minimum of three years to secure a Patent for a product.

The issue of Intellectual Property Rights (IPR) protection is another of the vulnerabilities faced by the MSMEs. It takes a minimum of three years to secure a Patent for a product. Patents for items such as detonators and composite materials are not being given to any private firm; these are exclusive domains of the PSUs. In the current context, this is archaic and needs a relook. Furthermore, the enforcement of IPR in the court of law is too little, too late – it is like shutting the stable door long after the horse has bolted.

As regards the new mantra in town – Indigenously Designed, Developed and Manufactured (IDDM), the problem is the ‘indigenous design’. Development of indigenous design capability is directly related to the Research and Development (R&D) environment in the country. In India, it is the Pharma sector that is the key driver of R&D. India stood sixth in terms of being the most “innovative” country in the world in General Electric’s Annual Global Innovation Barometer in January 2013. World Bank data on patent applications filed through Patent Cooperation Treaty or with national patent office for exclusive rights for an invention is a fair indicator of the level of technology penetration in the country. Data for the period 2011-2015 indicates the number of applications filed:








South Korea



United States











The above data needs to be seen in light of the Ministry of Human Resource Development figures in its 2014 Report ( Of the 2.92 crore students enrolling for higher studies, 2.31 crore (79.4 per cent) are for undergraduate courses and 33.7 lakh for postgraduate courses. At the undergraduate level, a total of 33.05 per cent (76.35 lakh) opted for science, engineering/ technology and IT/computers. The picture at the postgraduate level indicated an enrolment of 8.75 per cent (2.95 lakh) in the Science, Engineering, IT and Computer stream. At the PhD level, of the 84,000 enrolments, 20.61 per cent (16,800) were in the Science stream. The Doctorate enrolments are the ones who finally opt to be scientists. That is a very miniscule number to choose from and as a corollary, the quality of the scientists available, after a significant clutch has left India seeking greener pastures in the West, is not noteworthy.

Remarkably, China recovered from the disastrous purge of its scientific community and budding scientists during the ‘Cultural Revolution’ in the Mao era in the late 1960s. Deng Xiaoping listed industry, science and technology at a higher priority to defence modernisation since these were inextricably linked to indigenous thrust for military modernisation. He believed, “Reform is the only way for China to develop its productive forces.” It is indeed a study by itself to understand how the Chinese systematically built up their scientific community to the present level.

This ‘Make in India’ sagara manthan has given the military time to seriously look at how the three services would fight future wars.

Reverting to the DPP 2016, another significant inclusion is the identification of ‘strategic partners’. This process is being progressed by placing platforms and weapons in one group and materials in the other. Group I comprises – aircraft, helicopters, submarines, warships, guns (including artillery), Armoured Vehicles (including tanks). Group II includes – metallic materials and alloys, non-metallic materials (including composites and polymers), and ammunition (including smart ammunitions). In the initial phase, ‘strategic partners’ are being sought in design, development and manufacture of aircraft, helicopters, Armoured Vehicles and ammunition. One school of thought considers this a step back to the ‘Licence Raj’ era. Choosing one ‘strategic partner’ in one field and giving him a free run thereafter is not an appropriate business model. Even after building in the checks and balances in the deal documents, the ‘partner’ could falter in quality, timelines for delivery and at a later stage, in-service maintenance and overhaul. SMEs are, ab initio, eliminated in this process.

While this massive ‘sagara manthan’ is in progress, all wait to see what this churning will throw up. For the military, it is a long wait. However, in the long term, it is the best that could have happened to force Indian R&D and defence industry to finally develop indigenous capability. Recently, in a written reply to the Parliament on the achievement of the DRDO, the Defence Minister stated that in the period 01 April 2011 to 31 March 2016, the DRDO had completed 248 projects successfully. The list, however, does have any big ticket weapon system on it. Moreover, the TOT given to the industry is a dismal listing of products – ‘Aloe Vera Juice’ and ‘Instant Khichidi Mix’ just to name a couple of them.

Furthermore, of the 70 ‘New Inventions’ mentioned, there is no worthwhile weapon system listed. In the past, the DRDO had been constrained in having to pass on its TOT to DPSUs and was not free to seek manufacturing partnership with the private industry, but this binding has now been removed. Often, the DRDO is required to produce limited numbers of a particular equipment which is not lucrative to the industry or even the DPSU. Earlier, the DRDO did not have any capacity to manufacture such equipment because of which the military was compelled to buy them from the global market at exorbitant prices. In a recent reversion in its role, the DRDO is now to set up manufacturing capability for such equipment.

Care needs to be taken to build in transparency in the competition between industries seeking ‘strategic partnership’ and in the bidding process for every product.

This ‘Make in India’ sagara manthan has given the military time to seriously look at how the three services would fight future wars. How will the three services conduct joint integrated operations to achieve the political objective whatever it be? It has given an opportunity to revise the Long Term Integrated Perspective Plan (LTIPP). Presently, each service has merely stated its independent requirements which the Headquarters Integrated Defence Staff (HQ-IDS) has only balanced out based on the capital budget anticipated to be allocated over the period of the 15-year plan from 2012 to 2027. The services should grab this opportunity to assign the DRDO fresh tasks in designing and developing new generation weapons and equipment that they need and not what is available.

Doctrine should be driving technology and not the other way round. Half-baked solutions, such as the procurement of approximately 66,000 assault rifles in the interim, create more management problems than continuing with a weapon already in service. The army had bid for a multi-calibre assault rifle to enable the same weapon to be used in conventional operations and CI/CT operations. If there is a change in the Qualitative Requirements which seeks a single calibre rifle, then this is an opportunity to review the calibre and assess the feasibility of a calibre which is a suitable via media between 7.62 mm and 5.56 mm calibres.

The DRDO can be tasked to produce the necessary prototypes at the earliest. The revenue budget allocated to the Master General Ordinance (MGO) for procurement of spares, warlike equipment, maintenance and overhaul, clothing and accessories is one factor that can help alleviate the gargantuan size of ‘hollowness’ that exists in the Army. Interaction with the DPSUs alongside gearing up the in-house capacities of Base Workshops and Ordinance Depots is being actively resorted to. To ensure a better response, the DRDO and DPSUs should be made accountable to the services and not remain shielded by the MoD.

Click to buy: IDR Apr-Jun 2016 issue

Deng Xiaoping said, “Hide your strength and bide your time.” In India’s context, it would read, “Hide your weakness and build your strength.” The unanimous opinion of the heads of private industry is that this chance being afforded by the current government for private players in having a stake in defence manufacturing is unprecedented and if not implemented, no other government will have the will, vision or desire to bring about this momentous change. The military hierarchy is also upbeat about getting a more active role in interacting with the DRDO, DPSUs and private industry to address the ‘hollowness’ in the design and development of new weapons and equipment.

Care needs to be taken to build in transparency in the competition between industries seeking ‘strategic partnership’ and in the bidding process for every product. Checks and monitoring should be instituted to ensure ‘discretionary’ powers do not creep in leading to cronyism which could later become a reinvention of the ‘licence raj’. As of now, all anxiously and optimistically wait for the ‘amrit’ that the churning of the seas – the ‘sagara manthan’ will finally yield. Hopefully, it will finally give India the much-needed impetus in building indigenous capability and be able to tap its vast potential to develop into the superpower everyone expects it to be.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Lt Gen (Dr) JS Bajwa

is Editor Indian Defence Review and former Chief of Staff, Eastern Command and Director General Infantry.  He has authored two books Modernisation of the People's Liberation Army and  Modernisation of the Chinese PLA

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One thought on “‘SAGARA MANTHAN’: Make in India Transition

  1. Well drafted article. During the Great Churning, however, One Great Soul had to gulp down the poison while Another Great Soul had to bewitch the naysayers and trouble-mongers for the Amrut to reach its destination.

    Under current political dispensation, we had great expectations which unfortunately have fallen short till date. Neither anyone arose to gulp down the poison nor did anyone come forth to bewitch the Unions or the PSUs or the former System into agreeing towards the goal. Quite rightly these nay-sayers and trouble-mongers have learnt their mythology lessons better than Nagpurkar Amdavadi. After all, we all know who lost out on the benefits of Amrut. So do they.

    So rather than frequently proclaiming on the plans of Manthan, what I suggest IMHO is that first the Vasuki (Defence Manufacturing & Acquisition Protocols & Principles) be made ready irrespectve of what it spews, then a suitable Meru (Defence Ministry-Heavy Industries-DPSU-Corporates) be identified and empowered and last but certainly not the least, the Kurma (PM or his chartered nominee) be made ready to shoulder the responsibility, again, irrespective of aches and sores that might begotten. Let there be the One who is ready to gulp down the negativities that get thrown out making sure that they do not spread or affect the process or stymie the final objective. That would have to be the PM with the open support by the Prez. Once containment is set in place, only then will such Danav be ready to play their part in the Manthan as they would rather take a chance of a drop than let it go off altogether.

    Finally, let us not worry more than necessary about any Rahu or Ketu – immortal that they might be, they are after all, innimical positions whch can barely cause obstruction and nuisance beyond small periods.

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