Make in In­dia: Quo Vadis?

Only with a ma­jor over­haul of the bu­reau­cratic es­tab­lish­ment and the gov­ern­ment ma­chin­ery as a whole, will the highly mech­a­nised lion rep­re­sent­ing the spirit of the ‘Make in In­dia’ cam­paign, be­gin to roar!

SP's MAI - - MILITARY VIEWPOINT -

In­dia ranks among the top ten coun­tries in the world in terms of mil­i­tary ex­pen­di­ture. To­day, In­dia is equipped with the third largest armed forces in the world and de­spite the size­able in­dige­nous aerospace and de­fence in­dus­try, both in the pub­lic and pri­vate sec­tor, around 65 to 70 per cent of the re­quire­ment of mil­i­tary hard­ware, con­tin­ues to be met with through im­ports. In­dia is also the sec­ond largest im­porter of weapon sys­tems, hav­ing been over­taken by Saudi Ara­bia only a cou­ple of years ago. High level of de­pen­dence on for­eign sources for mil­i­tary hard­ware not only re­sults in the de­ple­tion of for­eign ex­change re­serves in fi­nanc­ing ex­pen­sive im­ports, more im­por­tantly, it also im­poses crip­pling de­pen­dence on orig­i­nal equip­ment man­u­fac­tur­ers (OEM) abroad for main­te­nance as well as up­grade or re­place­ment of ob­so­les­cent in­ven­to­ries.

A Stag­nant Sec­tor

In the post-in­de­pen­dence era, on ac­count of pol­icy im­per­a­tives, the pri­vate sec­tor was kept out of the do­main of the In­dian aerospace

and de­fence in­dus­try which re­mained un­der the con­trol of the cen­tral gov­ern­ment. How­ever, the gov­ern­ment con­trolled aerospace in­dus­try did cre­ate elab­o­rate in­fra­struc­ture and suc­cess­fully un­der­took pro­duc­tion of fighter and trans­port air­craft as also ro­tary-wing plat­forms for the In­dian armed forces as also for lim­ited civil­ian ap­pli­ca­tion. But the so-called “pro­duc­tion” was largely “as­sem­bly” of the plat­form us­ing kits re­ceived from OEMs. There was no real trans­fer of tech­nol­ogy or de­vel­op­ment of skilled hu­man re­sources to en­able the na­tion to leapfrog to in­dige­nous pro­duc­tion of so­phis­ti­cated plat­forms. The aerospace and de­fence in­dus­try there­fore de facto re­mained stag­nant over the years.

Launch of ‘Make in In­dia’ Scheme

It was on ac­count of the de­sire to cor­rect this long-stand­ing im­bal­ance or anom­aly, that soon af­ter the NDA gov­ern­ment came to power at the Cen­tre, Prime Min­is­ter Naren­dra Modi launched the ‘Make in In­dia’ cam­paign in Septem­ber 2014 with the aim to pull the in­dige­nous de­fence man­u­fac­tur­ing sec­tor from the morass it had de­scended into and give it a new lease of life. His sus­tained thrust on this cam­paign since then and espe­cially dur­ing his vis­its abroad, did gen­er­ate con­sid­er­able in­ter­est amongst the for­eign gov­ern­ments and OEMs alike to ex­ploit the im­mense op­por­tu­ni­ties that In­dia had to of­fer. Not only did In­dia of­fer a size­able and a multi­bil­lion-dol­lar lu­cra­tive mar­ket for mil­i­tary hard­ware, it also pro­vided a large hu­man re­source pool and the dis­tinct ad­van­tage of pro­duc­tion at sub­stan­tially lower cost. But there have been and con­tinue to be im­ped­i­ments to the re­al­i­sa­tion of Prime Min­is­ter’s dream of ‘Make in In­dia’ in the de­fence man­u­fac­tur­ing sec­tor.

One of the first steps that the gov­ern­ment took was to re­vamp the De­fence Pro­cure­ment Pro­ce­dure (DPP). The re­vised edi­tion was re­leased at the De­f­expo in March 2016 at Goa. From the ini­tial re­ac­tions of the stake­hold­ers it ap­pears that in the DPP 2016, a num­ber of pro­ce­dural bot­tle­necks have been re­moved. DPP 2016 pro­vides a more con­ducive, busi­ness-friendly and flex­i­ble en­vi­ron­ment for the In­dian armed forces and the de­fence in­dus­try, both for­eign and do­mes­tic, to work to­gether on co-pro­duc­tion of proven plat­forms or on the projects for the co-de­vel­op­ment of new plat­forms.

The In­dian Pri­vate Sec­tor

For its part, the In­dian aerospace and de­fence in­dus­try is will­ing to make ev­ery ef­fort for the suc­cess of the ‘Make in In­dia’ scheme. In fact, a num­ber of firms have al­ready dis­played their com­pe­tence lev­els and have made head­way in this field well be­fore the scheme was con­ceived and launched. There are a num­ber of suc­cess sto­ries such as Tata Ad­vanced Sys­tems Lim­ited (TASL) has joined hands with Siko­rsky Air­craft Cor­po­ra­tion of the US, a com­pany taken over by Lock­heed Martin Corp in the re­cent past, to man­u­fac­ture cab­ins as also other com­po­nents for the S-92 he­li­copter at their fa­cil­ity in Hyderabad. In­ci­den­tally, the Siko­rsky S-92 VVIP he­li­copter is used by the Pres­i­dent of the US for short dis­tance air travel. So far, TASL has man­u­fac­tured over 150 cab­ins, all for the US mar­ket.

An­other In­dian en­tity to dis­play its ca­pa­bil­ity and in­no­va­tive ap­proach in aerospace man­u­fac­tur­ing is Bengaluru-based Mahin­dra Aerospace that has ac­quired ma­jor­ity stake in Gipp­sAero of Aus­tralia and has been man­u­fac­tur­ing the Air­van 8, a seven-seat util­ity air­craft and Air­van 10, a ten-seat tur­bo­prop ver­sion. In June 2015, Mahin­dra Aerospace was awarded a large aero-com­po­nents

While there has un­doubt­edly been some for­ward move­ment in the ‘Make in In­dia’ cam­paign of the gov­ern­ment, there is still some more ground to be cov­ered

pro­duc­tion con­tract by Pre­mium Aerotec, a com­pany from the Air­bus Group based in Ger­many. This multi-year con­tract en­vis­ages the man­u­fac­ture and sup­ply by Mahin­dra Aerospace of a va­ri­ety of metal­lic com­po­nents for sev­eral Air­bus air­craft pro­grammes as part of as­sem­blies pro­duced by Pre­mium Aerotec. Bharat Forge Lim­ited has en­tered into an agree­ment with Rolls-Royce to sup­ply crit­i­cal and high in­tegrity forged and ma­chined com­po­nents for a range of aero-en­gines in­clud­ing the Trent en­gine from Rolls-Royce. Even a small firm such as Bengaluru-based Dy­na­matic Tech­nolo­gies that be­gan in the auto in­dus­try, is mak­ing com­po­nents for Boe­ing’s Chi­nook heavy-lift he­li­copter. Boe­ing has also signed an agree­ment with TASL in Novem­ber 2016 for a joint ven­ture to man­u­fac­ture fuse­lage for Apache he­li­copters not only for the In­dian or­der, but for the global mar­ket as well. The two com­pa­nies are also ex­pected to co-pro­duce other aero-struc­tures and in­te­grated sys­tems in­clud­ing un­manned aerial ve­hi­cles (UAVs). A num­ber of other ma­jor projects in the pipe­line re­lated to code­vel­op­ment and co-pro­duc­tion in In­dia in­volv­ing the Rus­sian aerospace in­dus­try and the In­dian aerospace ma­jor Hin­dus­tan Aero­nau­tics Lim­ited (HAL) that will pro­vide boost to the ‘Make in In­dia’ cam­paign, are man­u­fac­ture of sev­eral hun­dred Kamov Ka-226T he­li­copters, multi-role trans­port air­craft (MTA) and the fifth-gen­er­a­tion fighter air­craft (FGFA).

More Needs to be Done

While there has un­doubt­edly been some for­ward move­ment in the ‘Make in In­dia’ cam­paign of the gov­ern­ment, there is still much more ground to be cov­ered to make it eas­ier for OEMs as well as for the In­dian en­trepreneurs to en­gage in col­lab­o­ra­tive ef­forts in In­dia. There is the need to ad­dress the fol­low­ing ur­gently:

 Fur­ther im­prove ease of do­ing busi­ness through mea­sures such as speedy sin­gle-win­dow clear­ance.

Re­duc­tion in pa­per­work.

Pro­cess­ing of li­cens­ing of projects on­line.

Speedy de­ci­sion-mak­ing by the var­i­ous de­part­ments of the gov­ern­ment in­volved in pro­cess­ing of cases.

Fur­ther sim­pli­fi­ca­tion and stream­lin­ing of the De­fence Off­set Guide­lines.

Re­duc­tion in taxes and sim­pli­fi­ca­tions of the tax regime which in In­dia is still very com­plex, dif­fi­cult to im­ple­ment and is sub­ject to in­ter­pre­ta­tion.

Mak­ing it eas­ier for com­pa­nies to ac­quire land to set up pro­duc­tion units and fi­nally, the in­volve­ment of and proac­tive role by the states, which tend to be­come a frus­trat­ing im­ped­i­ment in a fed­eral struc­ture of gov­er­nance.

En­hance em­pha­sis and fund­ing of Re­search and De­vel­op­ment espe­cially in the pri­vate sec­tor within the coun­try to de­velop ad­vanced tech­nolo­gies.

Col­lab­o­rate with coun­tries that are in a po­si­tion to as­sist In­dia in the de­vel­op­ment of fu­ture tech­nolo­gies.

But per­haps the most for­mi­da­ble im­ped­i­ment to the suc­cess of the ‘Make in In­dia’ cam­paign to quote Bharat Kar­nad, will be “re­ly­ing on the ex­ist­ing de­crepit ap­pa­ra­tus of the state, unimag­i­na­tive pol­icy es­tab­lish­ment and the gov­ern­ment’s usual lack­adaisi­cal way of do­ing busi­ness to de­liver re­sults.” Only with a ma­jor over­haul of the bu­reau­cratic es­tab­lish­ment and the gov­ern­ment ma­chin­ery as a whole, will the highly mech­a­nised lion rep­re­sent­ing the spirit of the ‘Make in In­dia’ cam­paign, be­gin to ac­tu­ally roar!

AIR MAR­SHAL B.K. PANDEY (RETD)

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