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HomeDEFENCEModernising the Indian defence forces

Modernising the Indian defence forces

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“Do not compromise on national security for purely budgetary reasons. The world is dangerous, and we must always be prepared for anything that might threaten our national interests and security,” Sanford Dixon Bishop – an American politician

For the past several months the government of India has been talking about several policy reforms for modernising the Indian defence forces under the Atma Nirbhar Bharat Abhiyan (self-reliant India) ranging from cuts in the defence budget, pragmatism in the formulation of general staff qualitative requirements (GSQR) and harnessing indigenous defence manufacturing capabilities.

According to a written statement made by Raksha Rajya MP Dr. Subhash Bhamre, the mindset of the defence planners in India is heavily focused on ‘Make in India’ initiative and several measures have been taken to promote indigenous design, development, and manufacture of defence equipment by harnessing the capabilities of the public and private sector.

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Apart from this, preference is given to procurement from Indian vendors under the Defence Procurement Procedure (DPP), several cumbersome procedures like – the cap on FDI in the defence sector, export procedure, defence offset guidelines have been simplified

Recently, the Government notified the ‘Strategic Partnership (SP)’ Model which envisages the establishment of long-term strategic partnerships with Indian entities through a transparent and competitive process, wherein they would tie-up with global Original Equipment Manufacturers (OEMs) to seek technology transfers to set up domestic manufacturing infrastructure and supply chains.

However, no target has been fixed for import of defence equipment from various countries as per the operational requirements of the Armed Forces. During the last few years including the current year, 119 contracts involving Rs 1,16,523 crore have been signed with Indian vendors and 68 contracts involving Rs.1,24,291 crore have been signed with foreign vendors for procurement of aircraft, helicopters, artillery guns, missiles, radars, rockets, simulator, ammunition, and component-level repair facility for tanks.

defence tank

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Department of Industrial Policy & Promotion (DIPP) has notified revised FDI policy under which FDI is allowed under automatic route up to 49% and beyond 49% through Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded. Further, defence industry is subjected to industrial license under Industries (Development & Regulation) Act, 1951, and manufacturing of small arms and ammunition under the Arms Act, 1959 and Arms Rules, 2016. Other conditions as per the said press note are as follows:-

The Finance Minister made specific announcements for ‘Self-Reliance in Defence’ relating to a yearly escalatory list of weapons/platforms for ‘ban on import’, initiatives to promote indigenization of imported spares, a separate budget provision for domestic capital procurement in the defence budget, corporatization of Ordnance Factory Board (OFB) and Foreign Direct Investment (FDI) limits in defence manufacturing under the automatic route to be raised from 49 to 74 percent. These were sweet dumplings for many defence enthusiasts, but for the more serious defence analyst, a pathway to be treaded with due pragmatism.

Strangely the Chief of Defence Staff (CDS) went a step further by asking the forces to shun imports and hand-hold the domestic industry even if they deliver weapons with only 70% of the GSQRs compliance.

The proposed reforms thus need to be examined under the scanner of some certain factual ground realities and related imperatives that cannot be wished away. One, the strategic security environment remains both volatile and dynamic with the heating up of trans-LC (Line of Control) firing, a spike in militancy in the valley, and the periodic Chinese faceoff.

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The nation thus needs to be sensitive that military capability building takes time and India cannot be found wanting or found compromising its capabilities for budgetary considerations.

Two, shrinkage of defence budget by 20 percent, will pose a challenge for national security with an already dwindling resource crunch. The reality of the present defence budgetary allocation is that it gives extremely limited fiscal space for sustenance and addressing present “hollowness”, new schemes for modernization to address the elusive “30:40:30 equipment profile” or scope for meaningful “Make In India” projects.

A newly founded dangerous term “Procurement Slowdown” will only be at the cost of national security and axing one’s own feet. However, the reform related to the introduction of the ‘Capital Procurement Budget’ for domestic industries is a positive step. It must, however, be complemented by a ‘roll on a budget’ for the entire defence budget, for a specified duration for optimal utilization.

Three, India has the third-largest military in the world and is also the second biggest importer of arms. Also, no Indian defence manufacturing company figures in the top 30 global defence companies. This gap and balance between technology-enabled military might, escalatory threat matrix and a nascent defence industrial base need to be addressed for national security and strategic autonomy in an institutionalized, balanced, and phased manner.

Four, ‘Make in India’ is not a magic wand; it will require a balance between on-going critical procurement ex-import and fostering future indigenous solutions. Also, our lessons of the past have indicated that comprehensive transfer of technology is the easier part, the challenge lies in the absorption of technology and ownership of intellectual rights. The transition will thus be escalators from Make for India, to Make in India, to Made in India (IDDM) for initially domestic needs, and then export market.

The bottom line is that, during this transition, time-critical defense capability cannot be compromised by the nation, waiting for the elusive indigenous high technology weapons, which may not in the horizon. Further, fostering indigenous solutions as a manifestation of a vibrant indigenous R&D base and indigenization of existing ex-import equipment will have to go hand in hand.


The challenge of determining the ‘negative list’ for a ban on import must be sensitive to the operational criticality of the multiple tri-service critical ex-import procurement under progress beyond the Acceptance of Necessity (AoN) stage and apply to future procurement prospectively.

Five, the services rightly aspire to acquire high-technology equipment, in the desired time-frame, for providing the required combat edge to the warfighter. Thus, GSQR’s are evolved through a deliberate multi-agency institutionalised process, based on operational requirements and pragmatism of in-service technology. They have ample flexibility in terms of essential and desired parameters, besides the clause of enhanced performance parameters and reviews at various stages.

No leader puts his soldier to risk with diluted capabilities, for the sake of indigenous solutions. The indigenous defence industry must meet the aspirations of warfighters. In any case, it is not the responsibility of the armed forces to earn profit for domestic industries, the job of armed forces is to win the war for the nation.

Notwithstanding above, if the indigenous capability is, presently, just a notch below the GSQR, the spiral approach must ensure the desired capability manifestation at the time of the deliverance of the first production model.

Malice is the low-cost L1 syndrome, which remains a stumbling block, irrespective of the incremental changes in the defence procurement procedure (DPP). Thus, decisions will need to be taken to comprehend the opportunity cost and time criticality to close certain vital capability gaps.

To strengthen the process, “Cost Indexing of Technology and Equipment Pricing Model”, needs to be pragmatically refined with the help of experts in this field, to get the best value for the desired quality equipment in a specified timeframe.

Six proposed enhanced FDI to 74 percent, through the automatic route, to usher in technology and assist in setting up local R&D laboratories is a positive step. The dispassion of foreign investors toward Make in India in defence could be reversed by a sound offset policy and this enhanced FDI. However, the interests of the domestic stakeholders in the industry and incentives for homegrown R&D must not be diluted.

Seven, periodically every new volume of DPP has only made the process more rigid, cumbersome, limiting flexibility, and being subservient to process rather than the outcome. The bigger the procurement ticket in terms of value, the more sluggish is the process. The malice lies in the “skincare” and associated structures, which remain unaddressed due to the cultural status quo, lack of accountability, and play safe syndrome mindsets of decision-makers. Make cases like the FICV languishing for a decade, are a case study like many others, where decision-makers lacked the will and accountability.

Eight, as a nation we lack a pragmatic institutionalized tri-service integrated defence modernization strategy. The strategy must be built on the pillars of tiered modernization, spiral approach to technology induction with an enhanced focus on fostering indigenous R&D, prioritization based on tri-service risk, vulnerability and value analysis, balancing modernization versus sustenance and encouraging indigenous solutions especially by medium and small enterprises; the glue for a vibrant industrial base and a defence ecosystem.

Lastly but not the least, the driver for self-sufficiency through indigenous solutions, will be the outcome of a robust ecosystem energized and driven by industry-friendly policies, time stipulated outcomes with accountability and a policy of “Risk Sharing Gain Sharing” by all stakeholders catalysed by the stimulus given to industry-driven local R&D.

Presently, indigenisation remains restricted to a partnership with foreign defence industries, without investing in local R&D. Unless technology is developed in the country, indigenisation has little meaning. The focus must be on creating an environment that makes Indian firms to be world technologically at par, qualitatively competitive, cost-effective, and where all enterprises can flourish in an integrated ecosystem.

While the recent policy reforms and speeding up of the acquisition process as part of the “Make in India” strategy is laudable, but in recent times, the experience is that they have not commensurately paid off, in terms of their true potential and desired outcome. Thus, there exists a credibility gap between expectations and deliverance, which needs to be addressed both by integrated policy reforms and cultural shift in outcome accountability by decision-makers, to infuse adrenaline in the whole process.

In conclusion, to make a symphony requires an orchestra to have focus, competence, goal orientation, harmonic relationship, and accountability by each player. ‘Make in India’ is not just an operational necessity but indeed the enlightened strategic path for this symphony which requires patience, resilience, and collective participation by all stakeholders. Individual competence and piecemeal policies will not energize the symphony of nations’ self-reliance. While the recent policy reforms and speeding up of the acquisition process as part of the “Make in India” strategy is laudable, but in recent times, the experience is that they have not commensurately paid off, in terms of their true potential and desired outcome. Thus there exists a credibility gap between expectations and deliverance, which needs to be addressed both by integrated policy reforms and cultural shifts in outcome accountability by decision-makers, to infuse adrenaline in the whole process.

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Lt Gen A B Shivane, PVSM, AVSM, VSM (Retd)
Lt Gen A B Shivane, PVSM, AVSM, VSM (Retd)
Commissioned in the 7th Light Cavalry, Lt Gen Shivane retired as DG Mechanized Forces. He was thereafter engaged as Consultant with MoD/OFB and authored two books on national security. He is a TEDx speaker and holds COAS Chair of Excellence 2021-2022 at the Centre for Land Warfare Studies. Gen Shivane has been General Officer Commanding of an elite Strike Corps and commanded 50 Armoured regiment during Operation Vijay and Operation Parakram, an independent armoured brigade and the elite Armoured Division. He has also served in counter insurgency operations in Punjab and Jammu & Kashmir and has been on a UN assignment. His other prestigious appointments include AQMG Mountain Division, GSO1 IS (Ops) in Kashmir, Commander Independent Armoured Brigade, BGS Strike Corps, ADG PP, GOC Armored Division and GOC Strike Corps.


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