The challenge of Modi’s 3-point defence vision
NEWDELHI: Prime Minister Narendra Modi hit the right notes at DefExpo 2018 outside of Chennai on Thursday (April 12) when he dwelt on the need for India to establish “a strategically independent defence industrial base.”
This is an unexceptionable national objective and one hopes that the next government in Delhi, post April 2019 , whether led by Mr Modi or otherwise will maintain fidelity to this goal, which is in dire need of all-party political consensus and longterm commitment.
He elaborated on the ‘Make in India’ vision, describing it as a strategic imperative to “Make for India and Supply to the World”. This laudable long-term goal is particularly necessary to accord credibility to the postCold War Indian aspiration for ‘strategic autonomy.’
Yet, this objective is exceedingly ambitious and a bit incongruous, in the light of the not so flattering reality that India has been among the top arms importers in the world. This decade-long pattern is unlikely to change soon given the very modest state of the Indian defence manufacturing ecosystem.
In his speech at the DefExpo, PM Modi did not minimise the scale of the task ahead and noted: “We are conscious that creating a defence-industrial complex is far from simple” but asserted that his government remains committed “to create the necessary domestic manufacturing eco-system (emphasis added) to achieve this.”
Ecosystem is a word that the PM used more than once and is very appropriate to describe the complex contours of the national challenge. Indicative of the entire labyrinth of the Indian state and its myriad functionaries, rules, regulations and compliance procedures — navigating the Indian defence procurement and manufacturing domain can be a very time-consuming and frustrating experience. Those who have done the rounds will vouch for this with considerable intensity and emotion but are constrained, lest the very state apparatus that needs an efficiency evaluation metric — and which is the only buyer of defence equipment take umbrage and blacklist the entity concerned.
PM Modi drew attention to the centrality of the state/government in the entire defence manufacturing domain and observed, with uncharacteristic restraint that “over the last few years, we (NDA II) have made a humble beginning.”
Various steps taken by the Modi government since 2014 to simplify procedures were highlighted and many of them are cause for cautious cheer. For example the PM stated that procurement from Micro and Small Enterprises (MSME) had gone up from Rs. 3300 crores to over Rs. 4250 crores in 2016-17 – an increase close to 30 percent. If this trend is maintained and improved, the MSME sector which is a niche strength for India could be scaled up and credible exports envisaged.
However for such a transformation to occur, the eco-system that PM Modi spoke about will need an all of government determination and integrity that must motivate the catchment areas of academia, public/private sector and the major global players. This in turn translates into state governments playing their enabling role. Two defence corridors have been identified by the Modi government - one in Uttar Pradesh and the other in Tamil Nadu and their success will be discernible over the next few years.
And finally, India’s three point Modi defence vision – make in India, make for India and supply to the world cannot be achieved if the fiscal allocation for the defence sector is as sluggish as it now is. The defence allocation as it is currently structured does not allow for any significant increase in the overall capital component over the next few years. This part of the defence budget which caters for procurement, modernization, R&D , seed capital et al is currently estimated to be around US $ 120 billion over the next decade. It is inadequate , given the existing gaps in the Indian military inventory and absent steady funding support, the grand vision of DefExpo 2018 could remain just that – a desirable wish-list.