Modi’s military procurement missteps

An Indian Air Force light combat aircraft 'Tejas' performs during Indian Air Force Day celebrations, Hindon Air Force Station, New Delhi, India, 8 October 2019 (Photo: Reuters/Anushree Fadnavis)
[Tejas skywards, Indian government permitting]

Published in ‘East Asia Forum’, Australian National University, Canberra, Sept 22, 2020 at https://www.eastasiaforum.org/2020/09/22/modis-military-procurement-missteps/

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As part of Indian Prime Minister Narendra Modi’s ‘self-reliant India’ policy, Defence Minister Rajnath Singh issued a list of 101 defence items in August with different timelines beyond which their import will be banned, with a second list soon to follow. From December 2020, the armed forces will not be able to purchase some 69 types of foreign-sourced military goods, including many major weapons systems and platforms: ship-borne cruise missiles, diesel submarines, missile destroyers, light combat aircraft and helicopters.

Most of these are already produced in India under licence, so the government is confident the ban will force the Indian defence industry to achieve self-sufficiency within a decade. Because imports will not be allowed for any reason, the military will be compelled to become stakeholders in indigenous programs. However, there has been minor pushback, with immediate purchases from abroad being approved to fill ‘voids’ in the war wastage reserve and the war stock just in case hostilities flare up with China in Ladakh.

Singh promised contracts worth US$54 billion to the Indian defence industry, but instead spawned scepticism because this figure includes funding for procurements that are already underway. The reality is that the Indian government has awarded US$34 billion of contracts to foreign arms suppliers, far exceeding the US$20.25 billion for Indian companies. Since defence budgets are written annually, there is no hint of long-term government funding for particular programs.

There are also more fundamental problems with the plan. It is ironic that a country more-or-less capable of making its own strategic armaments — nuclear warheads, long-distance missiles and ballistic missile submarines — is unable to produce conventional weapons. Because strategic weaponry is not available at some arms bazaar, these were developed in-country under a special dispensation — the ‘technology mission’ mode — directly under the Prime Minister. This precluded the procedural hassles, niggling financial oversight and bureaucratic foot-dragging usually faced by conventional weapons development projects. The arms self-reliance policy will be boosted if all indigenous conventional weapons projects too are developed under a similar regime.

India’s mindbogglingly complex defence procurement system, tilted against local industry, has been only superficially reformed. The latest version of the Defence Procurement Procedure defines a hierarchy topped by indigenously designed, developed and manufactured (IDDM) items. Next are items satisfying the ‘Make in India’ (MII) initiative, which includes equipment reproduced by foreign companies from their international product lines — Lockheed Martin’s F-16 fighter aircraft, for example, which will be sold as the new F-21.

IDDM items must include at least 60 per cent Indian content (whether by weight or value is unclear), with the same requirements applying to spares, special tools and test equipment. The MII category allows foreign firms to get away with only 40 per cent, skewing the competition cost wise in their favour. This pushes the armed services towards the MII option, involving munitions that are proven but that quickly become obsolete.

This process is complicated by the lack of procedures to assess the use of local content in either category — the defence force will have to take foreign firms at their word, which isn’t always reliable. In this case, kicking the crutch of foreign weaponry from underneath the armed services will not advance the cause of a ‘self-reliant India’ without first removing the anomalies in the procurement procedures.

The military has a habit of finding anything imported acceptable and anything Indian-made suspect. The travails of the Indian-designed and developed 4.5 generation, near all-composite Tejas light combat aircraft are well known. The Indian Air Force (IAF) contributed little to the project other than frequently changing the Air Staff Qualitative Requirements, imposing delays in the prototype and certification stages and, when the aircraft rolled out, claiming it was technologically dated. The IAF was finally pressured into buying a squadron’s worth of Tejas, and, with the push for indigenisation, will soon order an additional 83.

The Indian Armed Forces were also unconvinced by the Indian-designed Arjun main battle tank, buying too few to support the necessary economies of scale. Despite outperforming the Russian T-90 MBT in all field tests, the army contends the Arjun is wider and heavier than the specifications. Meanwhile, their T-90 fleet keeps growing.

The precedent for the stepmotherly treatment of locally-produced armaments was established in the mid-1970s, when the IAF favoured the British Jaguar low-level strike aircraft at the expense of the HF-73, the advanced variant of the Indian-designed Marut HF-24 — the first supersonic jet fighter to be produced outside of North America and Europe.

Compared with their peers in the public sector, private-sector defence industrial firms boast better designing wherewithal, work ethic and labour productivity. But the Modi government continues to relegate private firms to the role of sub-contracting for the apathetic and wasteful defence public sector units, resulting in time and cost over-runs, delayed delivery schedules and alienated military customers.

The government has so far ignored the economically sensible solution of making the defence industry more profit and export-minded. That would entail Hindustan Aeronautics Ltd. sharing the design and source code for the Tejas LCA with Tata Aerospace and Mahindra Aerospace, creating multiple production lines for a combat aircraft with a ready market in the developing world. They could also task Larsen & Toubro, the engineering giant that puts together the Arihant SSBN, with producing conventional submarines.

A more ambitious approach would be to divide the public-sector research and development and defence industrial assets into two giant competing combines, each under the managerial control of leading private sector companies such as Tata and L&T. These two complexes would then bid for weapons contracts, with the Defence Ministry funding development in the prototype and selection phase.

Absent such optimal use of defence industrial resources, prospects are bleak for a militarily self-sufficient India.

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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.
This entry was posted in arms exports, asia-Pacific/Indo-Pacific, Asian geopolitics, civil-military relations, Culture, Decision-making, Defence Industry, Defence procurement, domestic politics, DRDO, Europe, Geopolitics, geopolitics/geostrategy, Great Power imperatives, India's strategic thinking and policy, Indian Air Force, Indian Army, Indian democracy, Indian Navy, MEA/foreign policy, Military Acquisitions, Military/military advice, Missiles, Nuclear Policy & Strategy, Nuclear Weapons, society, South Asia, Strategic Relations with the US & West, Technology transfer, technology, self-reliance, United States, US., Weapons. Bookmark the permalink.

18 Responses to Modi’s military procurement missteps

  1. RK Narang says:

    Sir, somehow we need higher leadership to take charge of our strategic sectors, for how long they would keep behaving ignorant. LCA, LUH, LCH, ALH, PINAKA, indigenous guns, ships are all roaring to move to next stage of development before acceptance in global market provided higher leadership understands the difference between assemble is not same as the “Design and Development” Secondly, someone giving level six of technology (without level 1-5 of those technologies) may be different category from the “level five” needed for your industry warm regards R K Narang

  2. Bhishma says:

    Mr. Karnad,

    One wonders whether psychology or corruption is also at play with the abhorrence by the Indian military establishment for locally made armaments.

    Psychology: you know… The typical stupid middle-class Indian desire for anything ‘phoren’.

    Corruption: you know… The typical ‘baksheesh’ seeking of our government servants… Whether the military brass are also complicit in some way. The public at large have assumed that the military is on the whole not tainted with corruption… But are they really clean in the higher echelons? Have they been really immune to kickbacks by foreign suppliers?

    Would like your thoughts on the above aspects.

    I do appreciate that our dependency on foreign armaments is a deep structural ‘complex’ of many factors but mostly to do with a dim-witted self-seeking mediocre non-strategic minded political class.

    However, I haven’t read any commentaries about the foibles of our military and reasons thereof.

  3. V.Ganesh says:

    Mr. Karnad why don’t you tell this and all that you’ve been saying to the RSS which is the power behind the BJP-led NDA throne? They would be inclined to listen to you because of who you are and also because you work for one of India’s most powerful and influential think-tanks. PM Modi will find it hard to decline when the RSS says what you have said so far including in this blog post of yours.

  4. PRATIK KUMAR says:

    Sir why people like Abhijit Iyer Mitra (a defence analyst) always speak against LCA Tejas and always praise Western jets. I mean whenever he was asked about LCA he always considered it a waste product and says India should go for F18, F21 etc.. Are they foreign funded or are they pseudo analysts, or is there some other reason?? Would like to know your views sir..

  5. andy says:

    The stalling of the Tejas and the Arjun tank has done immense harm to Indias defence readiness. If it wasn’t for the late RM Manohar Parrikar,Tejas would still be languishing in HAL workshops instead of being deployed on the Pakistani front line With this deployment ,the various test pilots and advocates of this potent 4+ generation platform finally stand vindicated.

    The Arjun tank though hasn’t had the same luck and continues being ignored by the Indian military, it’s a much better platform than the T90 being inducted in large numbers,484 on order recently.

    Problem with the defence procurement process in India is that the primary stakeholders, the military, is only interested in buying imported armament. Its shameful for a country of this size to not even be able to make our own assault rifle. The various indigenous offerings for a new rifle have been rejected on flimsy ground so that Sig sauer of the US and Kalashnikov of Russia are the beneficiaries. The only way to wean the military off this fetish is to stop all imports, so this step by GOI is probably the right one. Now the loopholes need to be plugged so that there’s no backdoor entry for imported arms.

  6. Sankar says:

    “Hindustan Aeronautics Ltd. sharing the design and source code for the Tejas LCA with…” –
    Does the wording ‘source code’ implies what in engineering denomination the Patent stands for? If so, there is the hardware side, i.e. the shell of the plane, and the weapon system mounted in it. Or is the ‘source code’ the software controlling the weapon system? I am a bit confused here, could someone please clarify? Also, has the IAF given any technological deficiency for example why they preferred the Anglo-French Jaguar? To my information, the Jaguar has excellent terrain following radar mounted on it which is probably their patent and would not share with others. In the early models Jaguar suffered from bad ground communication which may have been sorted out in later models. But IAF must provide their own reasons why they preferred the Jaguar over the locally manufactured HF-73. If not, why not?

    • Bhishma says:

      @Sankar

      The ‘design and source code’ means three sets of codes for a fighter aircraft: engineering design codes and the software covering avionics/radar/fire control/integration.

      The engineering design ‘codes’ cover the constraints and design principles. These are utterly critical to understand the capability and potential for any future modifications in a holistic way. Any good design will not be built fully optimised at the get go… It would have some leeway in the design for further loads. Without knowing these it’s next to impossible and risky to do further changes to the aircraft. The engineering design principles for the aircraft cover the fundamentals of propulsion systems, the structural design, the mass distribution, the aerodynamics and the wing control surfaces.

      The engineering ‘codes’ are the really the meat of the design. If you know these then you basically know what you can tweak and what you can’t. Totally essential if you want to add/remove or upgrade anything.

      The rest of the ‘source codes’ is the software covering all the main systems and subsystems…(usually the avionics/radar/fire control/integration)

      For example: we don’t have the source code for the Su30MKI… So when we wanted to add the Brahmos to it… We needed the assistance of the Russians to first check if its possible and then help in integrating it.

      The Tejas… If we want it to use the brahmos or any other future weapon … We don’t need anybody else in principle. Because we have the source codes. We know what the airframe is capable of. So we would develop weapons which are fit and optimised for our aircraft. Not shoehorning after the fact.

      • Sankar says:

        Bhishma@ — ” The engineering ‘codes’ are the really the meat of the design.” Not sure what that stands for technologically. To my info, the words “coding” or “code” appeared first in the context of computer technology and is a synonym for the algorithm of the program compiled in machine language for the processor to execute. Thus “source code” is intrinsically the area of software engineering and is the essence of digital electronics.
        For any machine, here a fighter platform, there is the architecture design of its hardware whose components are made under certain specifications. These components, for example the display in the cockpit, are mostly sourced from outside suppliers for the manufacturer of the machine. In a nutshell this is the “blueprint” of the machine.

        Of course, in a generalized sense one could use the term source code to include both the hardware and the software for any machine.

        But when it comes to military hardware there is a catch since there is the weapon system mounted in the machine. In the western system digital electronics is all pervading. There is the software code for a frequency hopping radar, or the emitter library, or the tracking code for a fire control radar and so on. And that technology must be kept under the strict control of the State because that is the essence of military secrecy. If the enemy breaks through that secret, the machine is defeated in the battle and is useless. Hence the implementation of the software engineering side must be undertaken by some government agency like DRDO. And that is a very elaborate job. What you mention about Brahmos is interfacing of two systems which is part of hardware technology.

        In sum I do not agree in the overall view of corporatizing the defense industry. It is dubious to apply the so-called metric of “efficiency” out of the corporate book in the defense manufacturing sector.

        Anyway, thanks for your prompt and detailed response.

      • Sorry to intrude into this conversation, but why, pray, exclude “efficiency” from the defence manufacturing sector? It is precisely because it has so far been excluded that DPSUs are in the terrible state that they are, and the ‘atm nirbharta’ policy in armaments isn’t going anywhere.

      • Bhishma says:

        @sankar

        When one talks of ‘design codes’ for a weapon system… It covers the engineering design parameters as well as the software codes for all the major and sub systems.

        Everything. Which covers the ‘design’ aspects of the weapon system.

        ‘Design codes’ here mean all the fundamentals… From the designing principles of the superstructure, hardware, and upwards to the lines of the individual software for each sub systems and the integration hub.

        Look… The ‘design’ is what’s actually important. It doesn’t matter two hoots who manufactures it and where as long as the manufacturing meets quality control.

        Design is EVERYTHING.

        Sorry. Have to completely totally disagree with you on not allowing local industry to manufacture what’s needed.

        The critical thing is the design. Once you develop and have the design you could get some parts manufactured even in a dusty smelly camel-dung coated workshop in Mauritania if you like… IF they can do it the cheapest and have the capacity to meet your quality requirements. Because you see… You have the design. You own the design. Once you have that… You can get anyone to make it. Whoever can do it the most efficient.

        Sharing the codes with a local manufacturer is eminently preferable to develop the industry and impose security measures to protect the IP. And the money circulates within India. Gives jobs to the endless engineers we keep breeding. Surely some of our genius engineers will stay and develop things in India than running Google (also it’s harder to protect our IP in aforementioned workshop in Mauritania you see)

        How did the other major weapon exporters get to where they are? By following the most efficient path.

        Even the Soviets did it the same exact way. Structurally.
        They created multiple design houses and let them compete for coming up with the best design. And then gave the design codes to whichever manufacturing combine had the capacity to build it.

        Workshops with basic machinery were churning out the PPS Submachine gun during the Siege of Leningrad. How? Because they were given the design codes.

        With attitudes like yours against distributed local manufacture… No wonder India hasn’t even managed to mass produce a simple sub machine gun yet.

        Why shouldn’t we give local industrial houses some of the business and help build up a local weapons designing and manufacturing ecosystem? How is that not okay? But giving money to foreign companies is ok? *exasperated*

        Lenin once called India ‘The Supply Depot of Humanity’ in reference to the sheer volume of armaments and war materiel India produced to support the allied effort in the First World War. How low have we fallen since…

  7. Sankar says:

    @Professor Karnad:
    The parameters of so-called performance in the rule-book of the corporate world are not defined for the defence industry since there is no benchmarking. In the consumer industry, say where manufacturing of goods like TV, shoes etc. are the final product, one could judge one product against another since there are several manufacturers supplying the same product. The customers are the consumers and they will not buy something which they find unsatisfactory and over time the manufacturer of that product gets eliminated. This leads to the assessment of the criterion of “efficiency” among the manufacturers by the customers in an unbiased form statistically.

    In contrast, in the defence sector take for example the case of an armoured vehicle. Here there is only one customer which is the Army. And there is only one manufacturer who gets the contract to produce the vehicle. The Army does not have the luxury of several manufacturers supplying several armoured vehicles (of the same general specification) to choose from. Here the efficiency virtually boils down “to satisfy” the only customer the Army by the manufacturer. Furthermore, there is always behind the scene political interference in selecting the manufacturer and pressure on the Army to accept. This becomes a very biased system in the final analysis – the efficiency of a certain manufacturer cannot be determined in that situation.

    Remember one thing, once there was the Soviet world where there was no market place and no corporate system. The Soviets manufactured their defence arsenal as good as the Western world, if not in some cases superior. Of course, the consumer industry there was far inferior in quality to the western world – in other words inefficient.

    Even in the western world there is the big divide – the Anglo-Saxon culture and the European culture. The corporate world belongs to the Anglo-Saxon, but not to the European.

    And as far as the criterion of “timeliness” is concerned, it is nebulous for state-of-the-art technology demanded by the military.

    • Sankar@ — There are no domestic competitors to DPSUs is because the private sector is impeded from bidding to design, develop and produce capital military hardware; in fact, they are through various procedural devices disincentivized from doing so. For instance, re: tanks — today Tata, Mahindra and even Bharat Forge can manufacture tanks that qualitatively would out do any Avadi DPSU product. Have therefore always advocated competing, multiple, R&D and manufacturing lines for major weapons platforms with the express incentive not only that the best proven item will be bought by the armed services but that, from the get-go, these products will be permitted to be exported without let or hindrance to generate revenues and amortize investments. This is the tack GOI should have taken from the start except the DPSUs were and still remain the flagship ventures for the socialist-minded Indian state (even in the Modi era).

      • Bhishma says:

        @bharat

        There is nothing ‘Socialist’ about the state of affairs with the Indian DPSU’s. Its just plain old utter incompetent mismanagement at best. There is nothing ‘Socialist’ about the Indian State. Why give Socialism a bad name? Rotten neglect and base strategic incompetence are not Socialist values. 🙂 They are the operating values of the Indian State. ‘Indianist’ is perhaps a better moniker.

        I define ‘Indianist’ as:
        The strategic dystrophic tendencies of the Indian State after Nehru, which masquerade as ‘socialist’ but are in fact just plain old strategic incompetence of its mediocre political class.

        The Soviet Union was Socialist and it had multiple design bureau’s which competed against each other. And multiple manufacturing centres which also competed with each other.

        Say what you will about their overall economic incompetence. However, when it came to armaments they knew how to design and mass manufacture well.

  8. Sankar says:

    Still do not get your point fully about the private sector – how could Reliance bag the contract for Rafael by Ambani creating Reliance Aerospace overnight and without any previous experience in the technology of fighter-interceptor aircraft? And what work and technology French Dassault will pass on to Reliance according to the hush-hush contract signed – does anyone know?

    • Bhishma says:

      @sankar

      As every other so called foreign technology transfer in the armaments sector… Dassault will transfer to the Ambani’s the knowhow to manufacture a range of screwdrivers. And picture cards showing how to screw together the parts made in France.

      Be under no illusion. France will NOT sharing any of the engineering or design codes for the Rafael. This is a crony capitalist sweetheart moneymaker deal with no real ToT. Instead of a DPSU it will be the Ambani’s wielding the flash new screwdrivers. That’s all.

      This is certainly not the type of true private led defence industry initiative which Bharat ji has been talking about.

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