In defence parlance, modernisation may be defined as relevant upgrades or improvement of existing military capabilities through the acquisition of new (imported or indigenously developed) weapon systems and supporting assets, the incorporation of new doctrines, the creation of novel organisational structures and the institutionalisation of contemporary manpower management and combat regimes1. Although Indian Army embarked on the path of modernisation more than a decade ago, it faces challenges with capability acquisition and dealing with obsolescent equipment and technologies, and in syncing the manpower and organisational structures to support these capabilities.
The hollowness in the Indian Army capability, which has grown over the years, should be arrested to adversely impact on our operational capabilities and regional aspirations.
Strategy for Modernisation of the Indian Army
Assessment of the Requirement: First and foremost we need to identity the criticalities, existing voids and slippages of previous plans, in keeping with the Strategic Defence Planning Guidance, which is a summation of the mission specific desired military capability in each strategic theatre and the sensitivity analysis for pragmatic parameters of financial allocations for defence2. These should then be reviewed in relation to contemporary technologies and the capabilities of our adversaries, as also the capabilities that we wish to create as a nation in the regional and global context. The hollowness in the Indian Army capability, which has grown over the years, should be arrested to adversely impact on our operational capabilities and regional aspirations. Induction of state-of-the-art technology in the Army is a capital and time intensive proposition and relevant factors influence our policy.
Focus Areas for Modernisation Plan : To meet the challenges of a collusive and multi-spectral threat, as also the slippages of the previous plans, the major thrust areas are maneuver operations, infantry and special forces operations, integrated fire power, integral aviation support, integrated theatre based air defence, out of area contingency (OOAC) capabilities, enhancing night fighting capability and battle field transparency, asymmetric and sub conventional warfare, build up capability for intelligence acquisition, its processing and real time dissemination including ‘HUMINT’, proactive measures to counter technological threats, especially in the cyber warfare, information warfare and electronic warfare domains, CBRN capabilities, UN peacekeeping operations, exploitation of space based assets towards execution of C4I2SR operations at all levels, making up equipment voids, augmentation of logistic capacities and restructuring of existing logistic organisations and infrastructure upgradation to meet the emerging requirements. Sustenance has today emerged as a cornerstone of capability due to reduced mission reliability and sub-optimal serviceability of critical equipment initially procured less the lifecycle support as part of the acquisition contract. It will therefore be necessary to include long term lifecycle sustenance support to capability we acquire, at the initial stages of acquisition itself.
The Indian defence acquisition process is fraught with unacceptable and undue delays at all stages and most of the acquisition schemes result in foreclosure.
The Way Ahead to Progress Army Modernisation Programme: The inherent delays in existing system of procurement from foreign OEMs, poor quality of products delivered by the DPSUs/OFs, bottlenecks in procurement procedures and drawbacks in the resource base are factors adversely impacting the pace of modernisation and seriously retard capability development, as envisaged by our first documented effort in the form of a Long Term Integrated Perspective Plan (LTIPP). What is now needed is a ‘result oriented’ system rather than a ‘procedure oriented’ one. Issues which need to be addressed on priority, both from the points of view of Army modernisation and achieving self-reliance, are listed as:-
Review of procedures: Procedures and processes drive capability acquisition. The Indian defence acquisition process is fraught with unacceptable and undue delays at all stages and most of the acquisition schemes result in foreclosure. There is a need to usher in revolutionary changes rather than evolutionary changes to the acquisition system, which has so far been the approach to periodic revision of DPP. Some of the major drawbacks in the present system are:-
- Procedural propriety and integrity has overtaken the primary aim of affecting positive and timely procurement. Timelines as laid down in DPP 2013 are not practical and realistic, since not even one scheme, major or minor, has ever materialised in the stipulated time frame of 137 weeks.
- Year after year, the success is measured in cash out-go terms, which does not represent the true picture of modernisation achieved by the Army.
- High value procurements are affected through intra-governmental deals which provide the saving grace to reduce the unexpended portion of budgetary allotments for modernisation.
- The Defence Procurement Procedure (DPP) has seen several iterations since inception but these versions have not aided in enhancing the effectiveness and efficiency of the procurement procedure, as such.
Indian defence industries should be encouraged to become sub-contractors for international defence industry so that they can gain experience.
Review of Defence Production Policy: The Defence Production Policy promulgated in 2011 was supposedly an insightful proclamation of the Governments intent to promote self-reliance in defence manufacturing and a fairly cogent articulation of the approach to achieve the objective. The policy states that a review of the progress made during the year in self-reliance be undertaken annually, however no such audit has been carried out till date. Consequently, there is no official assessment of the impact the policy has had on the process of self-reliance in defence since the policy was promulgated3. There is also a need to clearly define the term “Defence Industry”, to move ahead in establishing a robust defence industrial and manufacturing base. A recommended simple definition is, “an industry and business which manufactures/ sells/ trades weapon systems and military technology and equipment including services. It comprises of the government as well as private industry involved in research, development, production and service of military material, equipment and facilities”. The following is recommended: –
- Increase the indigenisation content to 50 percent in ‘Make’ projects from the presently stipulated 30 percent4, since this category is exclusively to promote design and development of high technology complex systems. Paradoxically we are demanding 50 percent indigenisation in ‘Buy & Make (Indian)’ while only 30 percent in ‘Make’ categories, which stands to no logic. We however need to weigh the negative impact of such a change on small companies/ MSMEs/ sub-vendors, who might need to be incentivised/protected, through special concessions on this account.
- Encourage and facilitate joint development between Indian and foreign companies. Indian defence industries should be encouraged to become sub- contractors for international defence industry so that they can gain experience. A few examples are already emerging – Tata and Boeing partnering to produce defence related aerospace components and Tata and Sikorsky teaming up to assemble the Sikorsky S-92 Helicopter cabin for civil and military use5 .
- FDI limit presently pegged at 26 percent should also be raised to facilitate the process. Although talks of raising the same to 100 percent are on the anvil of the new government, the OFB and DPSUs have already started to lobby against this move since they expect the defence manufacturing space, which has been their captive market share to reduce drastically with increase in FDI. Sadly, the politico-social interests are also coming in the way of raising FDI limits with the baseless fears of strategic and security concerns. Adequate checks and balances can be instituted to mitigate risks if any.
Periodic audit / review of all DPSUs and OFB should be done by the DDP with members from HQ IDS, SHQs and Acquisition Wing, MoD.
- The DPSUs have the advantage of funding by the Government. We must examine the possibility of funding of industry projects also by the government. The ‘Make’ procedure is the ideal route for this but its present avatar is fairly complex, complicated and time consuming. Also, this category does not support innovations. We need to promote innovations rather than jugaad.
- Each proposal should give out a detailed breakdown of indigenisation content in terms of design/components/through lifecycle support at the time of seeking AoN and debated at SCAPCC, along with timelines for achieving the same. This will drive and monitor the indigenisation of the systems/ sub systems.
- Carry out an audit of all ‘Buy & Make’ and ‘Buy & Make (Indian)’ cases with an aim to analyse the indigenisation achieved and the utilisation of ToT.
- Carry out an audit of our existing production system, as under:-
- Evaluate the need to indigenise compared to time frame, quality and reliability of equipment to be inducted.
- Need to decide indigenous content of each project individually keeping operational necessity and technology complexity in mind.
- Indigenisation can range from design to manufacture of complete platform or even at component/ sub system level.
- Each proposal should be analysed for weightage that needs to be given to ‘design’ in indigenisation.
- Periodic audit / review of all DPSUs and OFB should be done by the DDP with members from HQ IDS, SHQs and Acquisition Wing, MoD. This audit should include a stocktaking of production capacities, expansion plans for enhancing capacities, liquidation of the order books as per committed delivery schedules and quality control mechanisms. The audit reports should be presented to the decision makers at SCAP meetings, prior to taking a call on the recommended categorization for a proposal. There is a need to enhance the capability of PP & FD Branch, HQ IDS to undertake this audit on a regular basis and ensure implementation of the policy
To ensure the defence industries and DPSUs become competitive and grow, we must review the policies for export of defence equipment and provide incentives for enhancing exports.
- Audit of DPSUs and OFB should be carried out by an independent agency. No fresh orders be placed on the DPSUs/OFs until liquidation of order books and assured delivery timelines and quality by them. Imposition of penalties in terms of restriction to future participation in defence projects may be a viable punitive action.
- Measures to enhance efficiencies and quality of DPSUs and OFs be initiated in terms of subjecting them to market dynamics and release of annual budgets only on achieving targets.
- R&D needs to be encouraged in DPSUs as well as private industry. In order to enhance R & D and ensure long term growth of industry there is a need to make it mandatory for defence industry to compulsorily invest a percentage of project costs in R&D.
- To ensure the defence industries and DPSUs become competitive and grow, we must review the policies for export of defence equipment and provide incentives for enhancing exports. The mere commerce of exports will drive the defence manufacturing and boost self-reliance.
The suggestions enunciated above, are simple and implementable in the near future, through a laid down roadmap towards self-reliance. The results they will yield will also be perceptible and obvious in real time. The Indian defence industry has been waiting at the starting block since long, duly primed and ready, for the starting shot to be fired. It will only be fair to integrate them in establishing a robust national defence industrial base and speeding the pace of modernisation.
 As adapted wrt Indian Army from The Army Modernisation Handbook, 2011, The Australian Army. Ref http://army.gov.au/Our-future/~/media/Files/Our%20future/Publications/Army%20Modernisation%20 Handbook %202011.ashx
 CDM Precis on Strategic Management Part I
 http://idsa.in/idsacomments/DefenceProductionPolicy 2011_acowshish_251012
 Para 4 of Chapter 1 of DPP 2013
 www.mckinsey.com/india/a_bright_future_ for_indias_defence_industry.pdf
– See more at: http://www.claws.in/1226/strategies-for-defence-modernisation-and-self-reliance-bikramdeep-singh.html#sthash.rgYr2X8Q.dpuf