Where’s the defence industry?

By Shailesh Dobhal , 05/09/2010
The Indian automobile industry is the seventh largest, and the second fastest growing in the world after China. Its auto components manufacturers are globally competitive, and every manner of automaker is already here or is in the process of setting up a base here.

Even till early 1980s, the country was an auto backwater, with just about a handful of manufacturers. The industry maturing followed, in a manner of speaking, the market. With domestic demand for anything from two-wheelers and cars to light and heavy commercial vehicles exploding in the last two decades, India has emerged as the global small car hub, and a big exporter of both finished cars and components.

In the last six years, while production doubled, from 7 million to 14 million, exports more than tripled, 0.5 million to 1.8 million last fiscal.

A big consumer market for cellphones made the world's biggest cellphone maker Nokia set up its largest manufacturing plant here, to meet the domestic requirements as well as to build an export base. The story of a big and growing domestic market spawning a vibrant domestic industry repeats itself with consistency across sectors -- apparels, consumer expendables, packaged food, pharmaceuticals, etc.

In fact, it is difficult to think of any industry sector where a huge domestic market is not a prelude to a vibrant domestic industry. Perhaps, only in God-gifted natural resources like oil, gas and minerals can a country be a big consumer and a big importer at the same time. Can there be any other such exceptions?

Well yes, if you consider the country's experience with defence equipment like submarines, ships, fighter planes and artillery guns. India is one the world's biggest consumer of defence equipment, having spent $50 billion in the last 10 years and estimates of over $100 billion in the next decade or so.

And historically we have relied on imports to fulfil over two-thirds of this requirement, as the public sector monopoly of DRDO, 8 PSUs and 39 ordnance factories have failed us squarely. Our defence exports are pathetic, even compared to other big arms importers like South Korea and Singapore. For every dollar worth of export of defence equipment, India imports $200 worth, compared to $20 for Singapore and under $9 for Korea.

Even after almost a decade of opening up of private participation and 26% foreign investment, just about 130 companies have entered the fray, and very little foreign funds have flowed in. Now the defence industry is a sensitive, highly technological one, with governments and graft never far from the scene. And you can't exactly extend the arguments of the plebeian cars and cellphones industry to as highly geo-strategic sector as defence, goes one argument.

Well, maybe not, but the logic of the market is finally inexplicable -- one who pays the piper calls the tune. True, existing big boys of the global arms club will hold back the change, and foreign governments will withhold cutting-edge technologies and newer versions for itself. But purchasing power has to be leveraged to change the old order, and a beginning has to be made somewhere.

Consider what China is doing. The authors of a paper, Leveraging Defence Offset Policy for Technology Acquisition, in the Journal of Defence Studies, January 2009, argue that China is launching its large civilian aircraft industry on an aggressive leverage of transfer of production technology from other countries in the form of outsourcing and offsets, primarily from the US and other aerospace companies.

So why can't India? The reasons are not hard to find. Our much touted defence procurement policy, which inter alia provides for an offset policy, is somewhat unclear in its objectives. The 4-year-old 'Offset Policy' requires a foreign arms vendor winning a contract of more than Rs 300 crore to offset a minimum 30% of this value in the domestic market through purchase of products/services from Indian companies or investments in setting up a joint venture with an Indian partner.

Already, in the absence of a robust monitoring mechanism, some experts have started flagging offsets as the country's next big scam in the making, with unscrupulous foreign vendors using it as a means for kickbacks.

Best practices in offset management can be gleaned from countries like Israel and South Korea that have used it to kickstart their domestic industries. Israel's offset policy explicitly emphasises acquisition of technology and not the product, for that alone can have a technology spillover effect that can spawn related ancillary industries, the backbone for all big manufacturing successes.

Ditto South Korea, where the approval of the offset contract is subject to the foreign arms vendor assuring 'approval' of technology transfer to the importing country.

Or take the example of Saudi Arabia. It realises that some cutting-edge technologies won't be shared or transferred and therefore its offset programme has evolved to harness commercially exploitable (transferred) technology, which has helped its offset-related domestic industry to already clock in billions in export sales.

Gunnar Eliasson, a professor of industrial economics at the Royal Institute of Technology, Stockholm, in his recently released book, Advanced Public Procurement as Industrial Policy, argues that there are four waves of spillovers of any technology, such as fighter aircraft manufacturing -- core, related, engineering and industrial technologies.

The value for country procuring high technology-led armaments is how its organises its industrial systems' absorptive capacity to leverages on such spillovers that can have long-term economic benefits in terms of spawning related industries, dual-usage commercial technologies.

Our offsets system, which has become virtually a government dictait-led windfall for big and small domestic players alike, should instead strive to create a defence industrial ecosystem of technology absorption, assimilation and innovation.
Source:Financial Express
Where’s the defence industry?

Space Warfare: Sky's the limit

The Indian Express
Tags : DRDO, defence ministry, india
Posted: Tuesday , Feb 16, 2010 at 0201 hrs
Beijing’s dismissal of the DRDO’s claims that its missile technology is superior to that of China might provoke knee-jerk patriotism in Delhi. But no one in the world disputes that China is way ahead of India in missilery and military uses of space. By transferring missiles and their production technology, China has also put Pakistan ahead of India. Instead of acknowledging the reality and redoubling the effort to catch up, the DRDO is making extravagant claims. Take, for example, its head V.K. Saraswat’s claim that the Agni-III, with its 3000 km range, is ready for “induction” by the services. A weapons system inducted after just four tests including one failure? This is the kind of sanctimonious self-congratulation that the DRDO has doled out for decades. Because they wrap themselves in the flag, we are not supposed to ask questions, only clap. Saraswat has claimed that “there is no need to produce and store missiles in today’s world”. Really? China has more than 1000 missiles pointed at Taiwan; and is producing and deploying missiles in scores every year.
Sky's the limit

Comments
Still long way to go
By: MK Mohanty | 16-Feb-2010
In India, we always take too much pride in achievements that are already too late. Here all government organisations have no accountability and people ride to top just doing manipulations and politics. There is no investigation why projects are taking too much time and what the actual quality of products they develop. Instead people in name of patriotism just get proud and complacent. There are only a few people who are sincere and put to much effort to get whatever success they achieve, but they get hardly any recognition and reward for their achievements. Instead people who do not have any honest effort of professional integrity and those who only play blame-game and are active players of favouritism in terms of their language, race and political orientation get all the highlights. This is the culture we have in all spheres of our life and still we feel we are great of all civilisations. We've to still long way to go to understand what exactly is going on around us.

There is NO accountability in the whole system, be it scientists or politicians.
By: Jatin | 16-Feb-2010
In reality, India is great mainly those areas where independent verification is not possible; but in any other area of science-technology we are lagging far behind China and also slipping down fast compared to our own past (as per published data). There is NO accountability in the whole system, be it scientists or politicians. Whole system is crippled by nepotism and political interference.

China continues to outmanoeuvre India

In an article published in the Telegraph newspaper on September 1, 2009, former Indian Foreign Secretary, Kanwal Sibal had warned about "strengthening suspicions that China will do everything possible to thwart India’s rise as a rival power," "its propensity to disregard agreements arbitrarily," and with India’s "diffident diplomacy", "China continues to outmanoeuvre India" politically: click me.

Two insightful essays have been published in the Far Eastern Economic Review of September 4, 2009 which focus on the deteriorating relations between India and China. One is by Brahma Chellaney, Professor of Strategic Studies at the privately funded Center for Policy Research in New Delhi. Titled, "India’s Growing China Angst": click me, it draws attention to the need for the world to take notice of authoritarian China’s aggressive intentions toward democratic India.

His concluding remarks sum up the gravity of the situation thus:
India can expect no respite from Chinese pressure. Whether Beijing actually sets out to teach India “the final lesson” by launching a 1962-style surprise war will depend on several calculations, including India’s defense preparedness to repel such an attack, domestic factors within China and the availability of a propitious international timing of the type the Cuban missile crisis provided 47 years ago. But if India is not to be caught napping again, it has to inject greater realism into its China policy by shedding self-deluding shibboleths, shoring up its deterrent capabilities and putting premium on leveraged diplomacy.
Why we should heed navy chief's warning on China

Indian armed forces confident about nuclear arsenal

The scientists said the tests were enough and tested. We believe the scientists. click me

Rajat Pandit, TNN 28 August 2009, 01:29am IST
Indian armed forces seem quite confident about the country's nuclear arsenal despite the controversy over the "yields'' of the 1998 Pokhran-II nuclear tests, which included a 15 kiloton fission device, a 45 kiloton thermonuclear device (hydrogen bomb) and three sub-kiloton devices.

Outgoing Navy chief Admiral Sureesh Mehta, also the chairman of the chiefs of staff committee, on Thursday said India had "a credible minimum nuclear deterrent" in line with its no-first use (NFU) policy.

"We are a nation which maintains a credible deterrent...more than enough to deter anybody, "said Admiral Mehta. And should someone do the unthinkable by launching a first-strike, then the "consequences will be more than what they can bear".

Asked about former DRDO scientist K Santhanam's statement that the hydrogen bomb tested during Pokhran-II was actually "a fizzle", Admiral Mehta said, "As far as we are concerned, scientists have given us a certain capability which is enough to provide requisite deterrence...the deterrent is tried and tested."

That may well be so but there are still some lingering doubts over whether India has a swift and assured second-strike capability, crucial for a country like India whose nuclear doctrine is centred around the NFU policy.

The doctrine, on its part, declares that nuclear retaliation to a first strike will be "massive and designed to inflict unacceptable damage". This connotes a robust stockpile of nuclear warheads, safe and ready for use if needed. Estimates indicate India's weapons-grade plutonium stockpile is enough for 80-90 warheads at present.

Pakistan, on its part, has deliberately kept its nuclear policy ambiguous in the belief it deters India from undertaking any conventional military action against it.

Moreover, recent reports indicate Pakistan has pressed the throttle to enhance its arsenal much beyond 60 nuclear warheads as well as supplement its ongoing enriched uranium-based nuke programme with a weapons-grade plutonium one.

But more than the actual number of nuclear warheads, the worry of the Indian armed forces has been the gap in their delivery systems. Pakistan, for instance, is well ahead in the missile arena, borrowing as it has heavily from China and North Korea.

China, with its long-range ICBMs (intercontinental ballistic missiles) and SLBMs (submarine-launched ballistic missiles), is in a different league altogether. Its road-mobile DF-31A missile, for instance, can hit targets 11,200 km away, while JL-2 SLBM has a reach beyond 7,200 km.

India, of course, has no ICBM or SLBM. While it's developing the 3,500-km Agni-III and 5,000-km Agni-V ballistic missiles, the only missiles available to armed forces as of now are Prithvi (150 to 350-km range), Agni-I (700-km) and Agni-II (2,500-km). But they, too, have not undergone the rigorous testing nuclear-capable missiles should undergo.

IAF has some fighters like Mirage-2000s jury-rigged to deliver nuclear weapons but the Strategic Forces Command has no dedicated bombers. Similarly, Navy has only two "dual-tasked'' warships armed with Dhanush (variant of Prithvi with a 330-km range) missiles, INS Subhadra and INS Suvarna.

Moreover, the nuclear-powered submarine INS Arihant, which was launched on July 26, will take at another two to three years to become fully operational. And it will be equipped only with 700-km range missiles to begin with.
Indian armed forces confident about nuclear arsenal

Armed forces will need Chief of Defence Staff in future: Mehta
New Delhi, Aug 27 (PTI) Navy Chief Admiral Sureesh Mehta today said the present system of having a chairman of Chiefs of Staff Committee (COSC) was working fine but the armed forces would need the services of the Chief of Defence Staff (CDS) as they move towards a larger strategic setup.

"Within the existing limitations, it (COSC system) is working fine.. but in the due course of time as we go on to have a larger strategic set up, we will certainly need a CDS," he told reporters here. "It would be difficult for one of the services chiefs to devote so much of time," he added.
PTI: Armed forces will need Chief of Defence Staff in future: Mehta