Defence | Road to self-reliance in weapons manufacturing is a long journey

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Domestic weapons-production and great power claims have economic, philosophical, and teleological linkages. All great powers and aspiring powers are supposed to be self-reliant in weapons-production.

Unfortunately, India remains one of the largest arms importers (hovering between first and second position), thereby, remaining vulnerable in competitive great power politics. However, signalling some good days for India’s weapons-production capacity, its domestic military industrial complex (MIC) is slowly metamorphosing into a success story. This is evident in India’s declining arms imports and, concurrently, increased booking for domestic manufacturers. The larger challenge, however, is to sustain, and proliferate this paradigmatic change.

Several statistical statements allude to the new reality. The SIPRI figures claim  that India’s arms import during 2016-2020 decreased by 33 percent compared to 2011-15. India’s share in global arms import came down from 14 to 9.5 percent. During the same period, India also slipped down from being the largest arms importer to the second-largest after remaining at the helm for embarrassing years. The SIPRI figures also hint, albeit indirectly, of India being the culprit for decline in global arms trade during the same period by 0.5 percent.

But the most pleasing statements are coming from our own defence budget figures. While an upward trend in domestic procurement has been visible for last couple of years, the armed forces already spent 64 percent of capital budget funds  of the Ministry of Defence (MoD) for fiscal year 2021-22 on India-made equipment.

While the actual figures may vary after the final accounts are available for 2021-22, this is a revolutionary turn-around. Only few years back, we were perpetually importing 70 percent arms from foreign suppliers. How did this turn-around take place?

SIPRI, unfortunately, would like us to believe that India’s imports decline was largely due to ‘its complex and lengthy procurement processes’. This is at best, a hilarious proposition, since the MoD has really worked hard to streamline and simplify procurement procedures in recent times. Also, such casual diagnosis does not adequately explain India’s higher imports in earlier periods.

The actual reasons for the imports decline are, in fact, attributable to national resolve and public policy initiatives in recent times. This space is too short to elaborate the measures taken through mission-mode approach under different schemes to bring down imports. For instance, several editions of the defence acquisition procedure have certainly provided more favourable platforms for indigenously designed, developed, and manufactured category (IDDM) weapons. Similarly, the strategic partnership gateway, several lists of restrictive items for imports, enhancement of FDI to 74 percent, establishment of new defence industrial corridors, and above all, corporatisation of ordnance factories are aimed at consolidating and expanding the domestic MIC.

The political economy of this turn-around is not without concerns. First, for all the big hopes about technology transfers taking place either through FDI, collaborative arrangements with the DRDO, and institutional mechanisms such as the technology development fund (TDF), it is debatable if India will readily get state-of-the-art technology in weapons-production. The MICs in all countries guard their intellectual rights rather jealously. Techno-nationalism will ensure a generational gap in weapons technology trade, even if this comes through the best collaborative projects.

Second, defence R&D, education, and production are all compartmentalised in the Indian context where networked and reciprocal arrangements simply don’t co-exist. India’s MIC growth so far is largely due to entrepreneurial State and State-led investments. Private sector participation is marginal. The MIC proliferation will take place only if supplemented by private sector’s volitional and enhanced investments in all sectors.

Third, India will remain a big emerging market for global arms-producing companies. It is debatable if western companies will not bandwagon their State-supported mercantilism at some stage to thwart and punch holes in India’s burgeoning MIC, and re-build their arms deals with India. This apprehension gains ground since some stakeholders in India always have a fascination for ‘foreign toys’ even if it means sabotaging domestic programmes like the ‘Maruti’ in the sixties.

If the great power club were to be judged by military power, and, in particular, the resilience and expanse of its domestic MIC, India would remain out of the club for foreseeable future. India has a woeful presence in the SIPRI list of top 100 arms-producing companies — Hindustan Aeronautics Limited, ordnance factories, and the Bharat Electronics, ranked quite low (42, 60 and 66). While India aims at expanding the MIC size to $25 billion by 2025 along with $5 billion weapons export basket, the road to self-reliance is a long journey.

Probably, we need to make more public policy efforts to accelerate the momentum.

Bhartendu Kumar Singh is in the Indian Defence Accounts Service. Views are personal, and do not represent the stand of this publication.