Internal resistance to Modi’s ‘atm nirbharta’ plan, and how the defence sector can lead the charge on self-reliance

Light Combat Helicopter Production Hangar of HAL inaugurated by Rajnath  Singh - Sectors - Manufacturing Today India
DefMin Rajnath Singh at the HAL Light Combat Helicopter production line

                                                    

Foreign control of cyber space, Prime Minister Narendra Modi warned in his Independence Day address, “can be a threat to the social fabric of our country, our economy and can even threaten the development of our nation; we are very well-aware of that. India is very cautious and is planning to take steps to combat these risks.” This was not the first time he had talked about cyberspace and the need for the country to be self-sufficient in related technologies, and to harness its potential for accelerated development and for better governance. While the message may have got across to the people, it apparently has not to the officials manning the government.

     A day earlier on August 14, Niti Ayog chairman Amitabh Kant, who is regarded by many insiders as the PM’s favourite babu barring his Personal Private Secretary PK Mishra, unveiled the ‘Aspirational Districts Programme’ (ADP) for digital connectivity that Modi has touted as the vehicle for faster all-round rural progress. So, what’s the problem? Bypassing the normal tendering process, Niti Ayog picked Oracle Corporation of California to provide the cloud-based database management system and software driving this programme. Why is that important? Because it kept the relevant technology competent Indian companies out of the game, preventing them from competing for a contract that, should the programme be extended nation-wide, will be worth thousands of crores of rupees. Were there competition, an Indian company would likely have won, giving a fillip to, and registering the government’s vote of confidence in, indigenous technology development. It would have put teeth in Modi’s plan for an ‘atm nirbhar Bharat’ (self-reliant India). Instead, the ADP is controversial, labelled by a former official, as “another scam, another excuse” to award a big tech company contract when schemes — e-seva portal, common service centres, etc. — already exist to do the same job as Oracle is commissioned to do. “None of these bureaucrats or Big Tech companies will actually go down to ground level to solve real problems” this official said. “They will just fete each other in airconditioned rooms and make nice presentations.”

     Had Niti Ayog taken the indigenous route on ADP, other ministries would perforce have taken note because the Department of Telecommunications (DoT) notionally responsible for ADP is, perhaps, the most egregious among government agencies in resisting and rejecting indigenous technology. The public sector BSNL signed a contract with Huawei for advancing its 4G network despite clear injunctions from the government not to do so. But then it was taking its cue from its parent — DoT, which had top listed the Chinese Huawei Company in the 5G sweepstakes despite national security concerns. It resiled from its position only after the Swadeshi Jagran Manch approached the Prime Minister. But to prove the point that generalist civil servants are never wrongfooted, the secretary responsible for pushing Huawei was, after retirement, appointed to head an ‘expert’ committee deciding on non-Huawei choices. Predictably, the Committee is inclining towards Nokia of Finland and Ericsson of Sweden as alternative suppliers when various Indian companies have already developed different technology components of an even more advanced telecommunications system, such as photonic transmission, but  are missing a single entity to integrate these various  technologies into a single 5G+/6G system designed and engineered for India by Indians! 

     Or, take the fibre-optic project connecting Chennai with the Andaman and Nicobar island chain. National security was offered as the reason by external affairs minister S Jaishankar to not only shift the contract from the lowest bidder, Huawei, to the Japanese company NEC, but got the Universal Service Obligation Fund (USOF), to finance it. USOF is a little known, separately administered unit within DoT tasked with funding rural telephony and indigenous networks, and known mostly for being, according to a source, “wholly corrupt”. “My question is” writes Smita Purshottam, ex-Indian Foreign Service, who retired as ambassador to Switzerland, “why no such grounds were invoked for domestic ICT networks?” Purshottam is founder and head of SITARA (Science, Indigenous Technology and Advanced Research Accelerator), an organization campaigning for home grown technology in government contracts and having as its members some of the smartest high-tech Indian companies and startups. In a note dated August 15 to SITARA members, she also pointed out how Jaishankar’s own ministry, MEA, has been remiss on the self-reliance front, not giving “any contracts under telecom Lines of Credit (LOCs) to domestic companies”, adding tartly, “I fail to see how a group dedicated to promoting domestic upgradation can get excited about LOCs benefitting only foreign companies [especially when] resources are scarce and the imperative of domestic development [of technology] is greater.”

     And that’s the trouble. The current BJP government may be Modi-centered and top-driven. But Modi cannot be everywhere, monitoring everything. Hence, government agencies and departments, rather than being motivated by the principle of self-reliance (which would have led, for instance, to DoT forging a consortium of Indian private sector firms as 5G+/6G technology integrator), and the MEA offering telecom LOCs to Indian firms, they seek excuses and loopholes to continue importing goods and technologies, manifesting the characteristic Indian craze for “phoren”. It makes nonsense of the Prime Minister’s call for atm-nirbharta. All these instances suggest the PM and the rest of the government are not really on the same page, that Modi decrees something be done in a certain way beneficial to the nation only to have the bureaucrats habituated to doing things another way, carrying on as they have always done.

     Modi’s self-reliance policy to a considerable extent pivots on the success of medium, small, and micro enterprises (MSMEs). I have long advocated the need for the government to incentivize in every way possible the emergence of MSMEs as the Indian version of the German ‘mittelstand’ – a concept France has replicated, as the source of technological innovation in the country. Except, other than lip service the government has done little to encourage and ensure the MSMEs their ease of doing business. Horror stories abound of would-be startups in the MSME sector, after getting initial clearances, having their projects, capital and other resources held up by rapacious, rent and bribe-seeking politicians, police and petty functionaries. Again, it shows a disconnect this time between what Delhi intends and how entrepreneurs and MSMEs are hobbled at the local level where Modi’s writ doesn’t run.

     There, however, is light at the end of the tunnel where military hardware is concerned. I have long maintained that the government should go ‘cold turkey’ on arms imports and simply ban purchases of all armaments. Throwing the Indian defence industry thus into deep water, I argued, is the only way to force it to learn to swim. It is good the Modi government accepted the advice in principle. On August 9, Defence Minister Rajnath Singh released a list of some 101 defence items, each with its own timeline, beyond which their import is banned. It will beneficially shake up the scene. Sixty-nine of these items have a very short time window and cannot be purchased abroad after December this year. In this section are featured major high value systems, including ship-borne cruise missiles, towed 155mm artillery, tactical simulators for various combat arms, missile destroyers, anti-submarine warfare ships, light combat aircraft, light combat helicopters, specialized kinds of shells and ammunition, radars, assault and long range sniper rifles, conventional submarines, electronic warfare systems, self-propelled barges, drones, and machine guns.

     This list may appear ambitious but between the private sector and DPSUs almost all these items are already being produced in the country. The more important and welcome aspect of the new procurement policy is that the escape route for the armed services to import these items by rejecting the indigenous versions as quality-wise deficient is closed. Meaning, the  forces and the relevant combat arms will have to become stakeholders in the indigenous programmes and work with the manufacturers to, if required, improve the product.

     The fly in the ointment is the possibility that the government will succumb to pressure mounted by the labour unions in defence public sector units (DPSUs) to hand over the main manufacturing contracts to them, with private sector firms thrown crumbs as subcontractors. This would be a fiasco. The track record of DPSUs over the last six decades in terms of product quality, and delivery within time and cost constraints is so abysmal, to appoint them principal contractors would, for the Modi government, be like taking an axe to its self-reliance policy. 

     Alternatively, it would make sense, for instance, to assign the Indian Navy’s Project 75i diesel submarine production to Larsen & Toubro – the only private sector company with the production wherewithal and its invaluable role and experience in building nuclear powered submarines, and compare its performance with that of the public sector Mazgaon Docks Ltd, which has struggled with producing the Scorpene submarine – delivering the first unit 12 years late and at almost twice or more of the stipulated cost.

     The government will have to begin to trust the profit-driven private sector which cannot afford to waste time or resources nor to violate contract terms or alienate customers by rolling out sub-standard products as DPSUs routinely do. The IAF, for example, has often had to induct into service new HAL-built Jaguar low-level strike aircraft with leaky fuel lines because the Service has no choice. The Indian government should ensure private sector companies a major role hereafter and force the DPSUs to compete with them. Competition may, in fact, improve DPSUs’ product quality and delivery schedules.

        There is an urgent and large IAF requirement for the Tejas Mk-1A. Even with two assembly lines, HAL cannot produce more than 18 LCAs annually. Getting DRDO-HAL to share  source codes for this aircraft with Mahindra Aerospace and other companies with capability to, at a minimum, have as many as four Tejas production lines outputting some 72 aircraft a year, will enable a whole big aviation industrial ecosphere to spring up of small and big firms designing and producing components, systems, subsystems and ancillaries, employing people in thousands with positive cascading effects on the economy. Mahindra have already been selected by Boeing to manufacture the F/A-18 E/F Super Hornet carrier aircraft in the hope the Indian Navy will buy it. What is problematic is the Super Hornet’s conforming with the Rajnath Singh list featuring the LCA, whose navalised variant not too long ago passed the carrier landing and takeoff test and may be ready for induction in the same time frame as Mahindra can get up the India-made F-18. In any case, multiple LCA production lines will result in decreasing unit cost, increasing profits from export orders, and internally generated funds being available for the development of the follow-on indigenous advanced medium combat aircraft.

     LCA then can be in the van of the Modi government’s ‘atma nirbharta’ defence policy, and help it to take wing. Should Modi and Rajnath Singh follow it, they will be remembered for birthing a multi-faceted, world-class Indian defence industry and for generally seeding a high value, high technology sector that will assist India to pull itself up by its bootstraps.


A shortened version published in my Realpolitik column in BloombergQuint.com, August 24, 2020, at https://www.bloombergquint.com/opinion/how-to-get-atmanirbhar-in-defence-production

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
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18 Responses to Internal resistance to Modi’s ‘atm nirbharta’ plan, and how the defence sector can lead the charge on self-reliance

  1. Sankar says:

    I do not agree with the substance of this column. I will bring it to the fore a few points to my understanding (limited?)
    :
    1. “… DRDO-HAL to share source codes for this aircraft …” – What does the ‘source code’ mean in the context of manufacturing any hardware? The author needs to explain this in common terms.

    2. “… to violate contract terms…” – this is a nebulous criterion, and as I have noted my understanding of the military industrial complex in a previous column here, such “contract terms” cannot be formulated to conform to any legal machinery to prosecute the contractor if the goods delivered are “judged to be substandard” in breach of the contract. Bottom line – Science and technology cannot be “bound” by law.

    3. “… or alienate customers … ” – there is only one customer here – the Indian military comprising IAF, Army and the Navy! Military hardware is not like consumer products such as televisions, fridges, kitchen ovens, microwaves for kitchen etc, where there are a thousand buyers who could on use find out the shortcomings of the products and give their feedback for addressing them by the manufacturer. For consumer goods, it takes many years to smoothen rough edges, by working through such feedbacks.

    4. “Throwing the Indian defence industry thus into deep water, I argued, is the only way to force it to learn to swim.” – It makes no sense to take such a position since India is not fighting any war unlike the US or Russia barring so-called “surgical strikes” for the captive BJP morons. The litmus test of military weapon systems and hardware manufactured by the local industry will come only then when the Indian military goes to war with their indigenously manufactured arsenal – not otherwise.
    Armed forces exercises during peacetime could be just a field test in evaluation but not much. I do not see any possibility of India to recapture the recently lost territory in Ladakh whatever Modi & Co can be clamouring for. In fact, the writer has excellently recorded in his columns how much territory India has lost to China in this Millenium.

    It reminds me of the episode of Patton tanks of Pak in 1965 war. The US supplied these to Pak passing their own tests most like to find out how they could excel in a real war. To their dismay, they found that in the Punjab heat environment the automatic firing system of the in-built guns and targeting while on the run went screwed up. And the Pakis messed up getting the blame that they were incapable of mastering modern technology of these tanks. Mind you, the Indian Centurian tanks had to come to a halt and then aim the gun and fire, a very primitive system compared to the Patton, but they excelled and devasted the Paks.

    There is no point of going further, I have noted more than necessary to say why I do not concur with this article.

    • My posts are not exercises in dissertation writing where everything is to be explained. Please read your own post again. And again, to discover the points you raise seem to be for the sake of doing so. Still, and for the last time, (1) source codes for avionics, weapons integration aspects, etc., (2) all cost, quality and delivery per tight contract language and loaded with harsh penalties for failure to meeting contract metrics, (3) all military services are customers to suppliers, (4) we are in wartime with China and always will be until the LAC issue is resolved w/o India losing all its claims, (5) Rajnath, wisely, has chosen the “throw in the deep water” option. Go tell him. For more on the Pattons, read Gen Harbhaksh’s war diary.

      • RG says:

        I disagree with until the LAC issue is resolved. Am surprised you are of this view.

        An India with all the ingredients of a power to equal or even surpass china in the future ll always be seen as a threat by CCP, given they are such die hard reflexive realists.

        Under no circumstance will they allow India’s economic rise, they ll try to embed into our economy ,they have already worked on it.Even a clear acceptance of their hegemony by India ll not stop it. Then they ll try dismembering India. Resolving LAC by them is akin to ceding space to India which they have already shown no inclination for , zilch.

        Defence part, as I don’t know much about ut, all else(civilian use) concerning AI requires data, one needs data to train algorithms to improve n implement them. There can be no doubt about it, rest: python,etc coders, high performance GPUs is nothing. Its imperative we deny them our data,even if we don’t ramp up our AI use in the civilian domain, which can always be ramped up from get go if one wants as u just need coders,GPUs n data. The gov is right on banning apps, ban all access to any form of digital data for them, for all times to come. This is about civilian use of data of any kind.

        India ll see peace vis-a-vis china only when ccp falls and the country sees democracy for at least 2 successive generations. Its amazing no one in India has given even an iota of space for the fall of ccp, just for the sake of it , I mean every discourse needs diverse range of views, this -not even a single person.

        Coming 2-3 yrs we shud play geopolitics very cautiously n smartly, play for their fall, lock stock n barrel. A disarmed (of nukes) and democratic china is not far fetched.

  2. Atamjeet Singh says:

    Very good article

  3. PRATIK KUMAR says:

    Sir today CDS Rawat said that India retains the military option against China if diplomatic talks fail. It’s good that India has military option in mind. However I think that instead of speaking in public, India should take military action (whenever it thinks fit) by surprising China as shocks and deception are part of modern day warfare. Telling such things in public will only make China prepare more for war thus reducing the surprise element . In fact there is a general thinking in Chinese that India will never fire the first bullet.

  4. Sohamg says:

    CDS Bipin Rawat has said explicitly that the Indian military has military options to recover Indian land if the , yeah, ‘talks’ fail to yield anything. However, there are many questions to be raised like the initial inaction of the IA, their definition of ‘failure’, and won’t the method of military force, if used, invite retaliation from china and make all the diplomatic engagements and talks seem foolhardy and useless ? So will the govt. and the military walk the talk or is this just for show (like the usual – hamare veer javano ka balidan blah blah) ?

  5. andy says:

    The roadmap for the optimal utilization of in country defense platforms needs to be chalked out without further delay. The best two examples for getting things kick started are the LCA Tejas and Arjun tank,both of them have been made to languish without proper support from the import obsessed military .

    Both have proven themselves over the years and the Tejas is only now finding favour with the IAF,having been deployed on the Pakistan border in its IOC configuration. The Mark 1A is a potent little fighter,with its AESA radar and top notch avionics it’s a dream to fly, as vouched for by a number of test pilots and also the line pilots in squadron service now. The primary role would be point defence, but with its inflight refuelling probe it can even undertake ground attack sorties inside enemy territory making it a true multi role fighter.

    We surely need a bigger order book for Tejas than the 83 currently being finalised for around $5.3 billion,this should be upscaled to at least 15 squadrons or around 230nos. With swarms of low cost Tejas available even the best enemy fighters could be overwhelmed by the sheer numbers. With its 4+gen features each Tejas is equal to at least 2 outgoing Mig 21s that barely make the third generation grade for fighter jets.

    The deadline for delivery of these 230 Mark 1A jets should not be beyond 2027.By this time the other iterations namely the MWF for the IAF and the TEDBF for the navy should be ready to roll from the very same assembly lines set up for the mark 1a. The MWF would replace the Mig 29,M2K and Jaguar fleet of the IAF,that’s another 230 jets. The total Tejas fleet should number around 460 fighters. If the first Mark 1A rolls out in 2024 and the order book of 460 numbers is to be completed in 10yr timeframe we need a manufacturing capacity of 46 nos Tejas each year. If this timeline is to be compressed to around 6.5 yrs we need a capacity of 72 jets each year .

    After the Tejas these lines can be used for the AMCA. Therefore its appropriate to say that this diminutive fighter, that has been made to languish for so long, would seed a thriving aerospace industry that would make us self reliant as far as airpower is concerned.

  6. Bipin Rawat says:

    Will the LCA Tejas CODE be SAFE if SHARED with Indian PRIVATE Defence firms like Tata and Mahindra ?

  7. devraj says:

    Sir,
    War is at the door. How much yield can be expected from the Indian 150 KT nukes, given problems with the untested fusion device in 1998?

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