Understanding the Riddle of Indian Defence Dependency
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Issue Net Edition | Date : 15 Jun , 2019


As the first IDSA military history research fellow, I was engaged in studying the Anglo-Maratha wars of 18th and early 19th century. During my research I came across a very interesting episode. In 1780s while the English were fighting Marathas on one hand and yet on the other hand they also supplied gunpowder to their rivals. The Board of Directors raised this question with Warren Hastings. His reply was that should we stop the supply of gunpowder to the Marathas, they might begin their own manufacture; hence it was better to keep them dependent on us.

As India moves towards celebrating 75 years of independence, the tag of ‘world’s largest importer of arms’ ought to be a matter of national shame.

It is nearly 200 years since then but the logic remains the same and India remains dependent on imported arms. History teaches us many lessons but for that we have to be ready to understand it and learn from it. Else we continue to repeat history.

As India moves towards celebrating 75 years of independence, the tag of ‘world’s largest importer of arms’ ought to be a matter of national shame. This tag is in direct contrast to the fact that Indian economy is today the fifth largest in the world and on path to be the third largest in decade. India has a diversified industrial base, most of the necessary minerals and technical manpower that is capable of sending a space probe to Mars at a very frugal cost (budget less than a Hollywood movie). After oil, defence equipment is the second largest import item in our national budget.

It is not just a matter of ‘honour’ or self-esteem but has practical implications. With our dependence on imported arms strategic autonomy of decision making is a mirage. People in the know are well aware how the foreign suppliers squeeze us during security crisis (1965 Indo Pak conflict or the two decade old Kargil skirmish). To understand our failure to ensure a reasonable degree of self-sufficiency (no country can be 100% self-reliant in today’s interconnected world), a dispassionate look at our past attempts is necessary.

In the immediate post-independence period, India’s national leadership was greatly influenced by the thinking in West that put the onus of starting two world wars on profit motives of the international armament companies. “Merchants of Death: A study of International Armament Industry” published in 1934 (authored by H.C. Engelbrecht, F.C. Hanighen, et al.) was a major influence on our political leaders. The Merchants of Death was, in many ways, the manifesto of a generation of people who swore there would not be and could not be another such war. On the eve of laying down his office, US President General (retd) Eisenhower on Jan. 17, 1961, gave the nation a dire warning about what he described as a threat to democratic government. He called it the military-industrial complex, a formidable union of defense contractors and the armed forces.

In the newly independent Asian countries the threat was even greater as in country after country, the democratic governments were overthrown by the military, and the biggest example was in our neighbourhood; in Pakistan.

Besides systematically cutting down the role of armed forces in any kind of decision making, Nehru also ensured that private sector was kept firmly out of any defence production.

India’s first Prime Minister, often described as Fabian Socialist, was greatly influenced by these ideas. He took two major steps to thwart this threat. On the one hand he systematically downgraded the military in relation to civilian bureaucracy with the Defence Secretary (as per the rules of business Govt. of India (GOI) 1961) as ‘responsible for national security’. This bureaucratic mischief continues to date. As a digression, this could well be due to the semantic confusion whereby in most countries the ministers are called ‘secretaries’. Many of the old GOI regulations were a straight lift from the British- be it the 8$ foreign exchange limit for travel abroad or even the ‘Guest Control Order’ limiting diners to 50! These were the exact curbs imposed in post Second World War period of economic crisis.

Besides systematically cutting down the role of armed forces in any kind of decision making (the officers posted in military wind of Cabinet secretariat were prohibited from wearing military uniform), Nehru also ensured that private sector was kept firmly out of any defence production. This was in line with Nehru’s philosophy of keeping the ‘commanding heights’ of economy under govt. control. Creation of govt. sector monopoly in defence production was the natural corollary to this premise. With monopoly in production of defence needs, the public sector exhibited all the ills of monopoly. The labour productivity was abysmal (over time earnings was a norm) and workmanship was terrible. Those like this author remember that the radio sets given to infantry for platoon to company communication never ever worked and workmanship was so shoddy that the even the male female plugs never matched, resulting in constant disconnections. This is just one sample of the woes of unaccountable public sector monopoly in defence production. 

India’s much reviled defence minister, Late Krishna Menon had the right ideas on self-sufficiency. He  pushed for an indigenous tank Vijayanta, fighter aircraft HF-24 Marut and indigenous frigates for the navy. But his abrasive nature and clash with the military leadership led to these ideas being thrown out once Menon was removed in aftermath of 1962 debacle in conflict with China. As a historian who has authored the official history of 1962 conflict, I can vouch that Krishna Menon was made a fall guy for the foreign policy blunders of Nehru. But like proverbial throwing baby with the bath water, India jettisoned Menon’s ideas on indigenous production. The 1962 debacle gave a carte blanche to the military in terms of acquisition of imported weapons.

Indigenous production of weapons was replaced by license production. From fighter aircraft to anti- tank missiles and small arms, we embarked upon reproducing foreign designs within India. The period of 1960 onwards to right upto year 2000, saw a very close nexus between a technological superpower like the US and our arch enemy Pakistan. Indian R&D thus had to cope with the best in the world with very little leeway for long term view.

Luckily for us, on the naval front the threat was less imminent and Navy could take a long term view. Also the Indian navy had kept the R&D firmly entwined with itself. India’s naval armament programme is thus a shining example in otherwise dismal scenario.

Post 2001 terror attacks on the US, the whole world situation saw a favourable change in India’s security environment.

Post 1971 political internal developments also impacted the defence indigenization effort. In that year the ruling party took a decisive leftist turn and ended its dependence on local capitalists for electoral funding. Instead, imports and kickbacks became the new source of electoral funding. The effect of twin factors of soldier’s need for high tech weapons ‘now’ and politicians interest in imports due to kickbacks, got us to the sorry state that we are today the world’s number one arms importer.


Defence Industry a Win-Win Solution

Post 2001 terror attacks on the US, the whole world situation saw a favourable change in India’s security environment. Although in the initial period the US did enlist our neighbour Pakistan as an ‘ally’ in war against terror, the US was clear that Pakistan was part of the problem and not part of the solution. The American arms pipe line that has existed since 1950s CENTO (Central Asia Treaty Organisation) and SEATO (South East Asia Treaty Organisation) days was finally shut down. The nuclearisation by both India and Pakistan has also meant that a 1965 or 1971 like full-fledged conventional conflict is the least likely scenario. It is true that China has replaced the US as the principle arms supplier to Pakistan, but to our advantage, China is nowhere near US in sophistication in arms technology. We now have a window of opportunity and time to concentrate on building self sufficiency in armament.

One of the resources least used in our quest for defence self-sufficiency is the huge pool of bright young technical brains that India has. Almost 19 years ago, as a part of Golden jubilee celebrations of our republic, I had occasion to participate in a workshop in IIT Delhi and later at IIM Bangluru. At that time I had made a simple point- the armed forces should encourage/permit visits by the students of IITs to border areas and armed forces units where they can see for themselves the ‘problems’ of defence that would include the equipment. Let these students then carry out projects of innovation and generation of new technologies, with support from armed forces after due vetting of ideas and projects by a panel of practitioners and tech experts. The emphasis ought to be on finding technical solutions to tactical problems. The current practice of armed forces raising a QR (qualitative requirements) and asking for a ‘products’ needs to jettisoned if we are to generate new technology.

The entry of private industry players has been at a slow pace in defence industry. One of the biggest resisting factors has been the stranglehold of powerful trade unions in defence sector.

In addition to this we ought to constitute American’s DARPA (Defence Advanced Projects Agency) like funding body manned by technical experts to give an open call to qualified citizens to come up with ideas. It is to be noted that most of the cutting edge technologies starting from internet to stealth have been produced by DARPA.

One of the major change that has come about in the world of technology in 21st century is that it is the small and medium enterprises that are nimble footed, have been the main innovators. In case of India this will generate employment and to an extent address the problem of small orders that has been one of the constraints in private players staying away.

Politically, the current government’s crackdown on corruption and middle men augurs well for private local initiative. With the current political dispensation not dependent on foreign kickbacks for electoral funding, situation is conducive to indigenous initiative.

The entry of private industry players has been at a slow pace in defence industry. One of the biggest resisting factors has been the stranglehold of powerful trade unions in defence sector. Most of the trade unions in this sector also happen to be affiliated with the ruling party. It is time that the party puts nation over the partisan interest and counter the trade unions.

The new organisations and structures suggested are not meant to either replace or do away with public enterprises or the DRDO. All that is proposed is that a degree of competition be introduced in the field of both research as well as production. If the 1991 experience of opening of the economy (and giving up the commanding heights) is any guide, the public enterprises if given reasonable autonomy are quite capable of withstanding competition.

We have indeed taken the first baby steps of getting into defence exports. We must overcome our morality mental block on this issue. If arms exports are immoral then arms imports are both immoral and stupid. In any case in a world divided into nation states, arms trade will continue to be major factor of international relations. If we do not enter the market someone else like China surely will.

Even if we could indigenize 50% of arms requirement, it would mean 30 billion US$ being pumped into economy. It is time we think of providing employment to Ganga Ram rather than George in US or UK.

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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

Col Anil Athale

former Joint Director War History Division, Min of Defence. Currently co-ordinator of Pune based think tank 'Inpad' that is affiliated with Bharatiya Vidya Bhavan.  Also military historian and Kashmir watcher for last 28 years. He has authored a book ‘Let the Jhelum Smile Again’ and ‘Nuclear Menace the Satyagraha Approach’ published in 1996.

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One thought on “Understanding the Riddle of Indian Defence Dependency

  1. I have certain observations on Part -I of the article:

    1. In a democracy, there should always be civilian control over the military to ward off any attempt for an undemocratic regime. The role of the military in strategic decision making should be limited to advising on war strategies, comparative strength and weakness of country vis a vis adversary, projecting requirements of resources in terms of arms, ammunition, equipment, platforms, manpower, and training requirements, and execution of the order given in theatre of war.
    2. Defence production in the public sector is not bad, and they have risen to occasion during wartime ramping their production manifold. Yes, certain relaxations, in rules, regulations and procedure will empower them to do better. In many militarily strong countries, defence production is in the public sector. Moreover, demand-side management on the part of armed forces should be proper, efficient, firm and pragmatic. Framing SQR and trying out a war machine and equipment should not take unduly large time so that it doesn’t become irrelevant at the time of induction.
    3. It is true that defence production was not given any priority till debacle of 1962 And after that, some progress was made in defence production. Unfortunately, DRDO became a white elephant, and if its outcome is compared with ISRO which is also in govt sector with the same set of rules and regulations, the same quality of engineers and technicians. I firmly believe that privatization with heavy FDI will not be a pragmatic solution in the long run due to profiteering motive during the need of the hour and pulling of strings across the country.

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