Innovating India's Defence Industry
Defence has been of vital importance throughout the evolution of mankind. The art of warfare has drastically changed over the centuries, and a careful analysis of history indicates a meticulous pattern of innovation. From the ancient era of spears, darts & bows, to the medieval era of the infantry & cavalry, followed by the industrial era of machine guns, aerial artilleries & explosives, to the modern era of submarines, satellites, nuclear weapons & stealth technology, there have been consistent technological advances in warfare.
The new age of cyber-physical systems has revolutionalised the way the world works and has led to the emergence of Industry 4.0, Education 4.0, Economy 4.0, among others, and has crept its way into the Defence sector as well. Gone are the days when battles were fought solely in battle grounds with known enemies and the outcome depended on the strength of the military forces. These days, cyberspace is the new battleground as economic assets are the easiest targets, and the outcome depends on the strength of the cyber security of the nation. What's more, oftentimes, the enemies are not even known these days! The advent of sophisticated technologies like artificial intelligence, robotics, biotechnology & nanotechnology, has enabled new ways of attack, such as cyber warfare, biological warfare, asymmetric warfare, chemical warfare, etc. The defence of a nation, thus banks heavily on technology to increase operational capacities and reduce uncertainties of any kind.
Most First-World countries have long realised the urgent need to achieve strategic modernisation of their defence sector, in order to achieve operational sophistication, and maintain a formidable defence force. They invest heavily in the R&D of their defence industry, thereby increasing their indigenous potential. The technological indigenisation and indigenous production they achieve not only facilitates the self reliance of their defence industry, but also helps in the economic growth of their country by giving avenues of exports.
India, although one of the highest defence spenders of the world, currently ranks lowest in terms of indigenisation in the defence sector. When it comes to the defence industry, India is a consumer and importer, rather than a producer and exporter. The country, however, has begun to mend its ways, aggressively focussing on defence indigenisation. In addition to the flagship "Make in India" initiative, the Government has been conceptualising various initiatives to encourage defence indigenisation, some of which are:
- liberalisation of the FDI policy for defence related investments;
- the Defence Procurement Procedure (DPP) - 2016 which provides encouragement to the private sector to venture into defence production;
- the simplified Make-II procedure of DPP-2016;
- the various incentives for startups and MSMEs to venture into defence manufacturing; and
- the draft Defence Production Policy 2018 which strategizes to provide an impetus to R&D and innovation in the Indian defence industry.
The nagging question that lurks in the minds of many Indians is, why is innovation in the defence industry so important to the Indian Government when the country has other seemingly burning issues to tend to? India has a large landmass to protect and there are imminent threats to the security of the nation, from all possible quarters. Therefore, our defence spending is naturally proportionate to the looming adversities we face. However, to cut down on defence spending, yet meet the needs of the defence sector, India should achieve self reliance, and innovation is the key enabler in achieving self reliance. In fact, much of the technological and sociological development of the human race could be attributed to have stemmed from war. Innovation in the defence industry has showcased the potential to create a spill-over effect, thereby contributing to technological advancements in civilian industries and commercial technologies, ultimately contributing to the overall progress of the nation's economy.
What's in it for us?
The Defence Minister has officially announced that the first defence corridor would be built connecting Chennai in TN to Bengaluru in Karnataka. Another feather in the cap was Chennai playing the host to the DefExpo 2018, which was a huge success. Aside to effectively projecting India's defence manufacturing capabilities to the world, DefExpo 2018 also succeeded in highlighting the expertise of small and medium industry clusters spread across Tamil Nadu.
Dr. Vinod Surana, Co-chairman of ASSOCHAM Southern Region, who has played a key role in bringing Tamil Nadu to the forefront, says this feat was systematically achieved by
- conceptualising a Defence Industrial Corridor in Tamil Nadu such that it leverages the existing manufacturing prowess;
- actively advocating the proposal with the Central & State Governments; and
- hosting the "Interactive Session with the Raksha Mantri" programme in Chennai in December 2017 for the industry, which in turn persuaded Ms. Nirmala Sitharaman, the Hon'ble Defence Minister to encourage the Forces to directly interact with the Tamil Nadu industries by organising a Vendor Development meet in January 2018.
With practical inputs from ASSOCHAM's Defence Manufacturing Committee which is headed by Vice Admiral Mr. Kannan (MD & CEO, L&T Shipbuilding), Surana & Surana International Attorneys, as the Knowledge Partner of ASSOCHAM, prepared a detailed case study for a "Defence Manufacturing Cluster in Tamil Nadu" and the case study was submitted by ASSOCHAM to the State and upon its approval, to the Centre. The Centre accepted the proposal in toto and officially announced the Defence Industrial Corridor in the Union Budget. On a related note, Chennai was subsequently chosen as the venue for DefExpo 2018.
DefExpo 2018: "The journey of a thousand miles, starts with a single step"
DefExpo 2018 has already been a success as far as making high technology accessible to India is concerned. Several state-of-the-art equipment such as amphibious aircrafts, naval shipborne UAVs, among others, are expected to be manufactured in India through technology transfer, post DefExpo 2018. However, a lot has to be achieved from the home-front itself.
Dr. Vinod Surana, speaking at the DefExpo 2018, highlighted that defence procurement should be purely based on capabilities, i.e. contracts should not be awarded on a nomination basis, but should be awarded purely based on the company's commitment to meet deadlines and exhibit operational capability.
India has a long way to go in terms of achieving complete self reliance. Instead of banking completely on transfer of foreign technology, we should simultaneously focus on our own strengths and build our competence by encouraging innovation and R&D. Instead of buying weapons platforms such as ships, fighter jets, etc. from big global players, we must build the platform ourselves by setting up Joint Ventures with the systems provider. Taking cue from China, we must focus on not only acquiring the platform, but with it, also the technology, and then further improve upon the design, performance and functionality of the platform. In other words, it is not sufficient if we absorb the know-how, but it is essential to absorb the know-why as well. This way, in a span of 5 to 10 years, we would be better equipped to integrate our own systems into various platforms, thereby achieving complete self reliance.
Another essential aspect to be considered is that thinking futuristic is the key to achieving military superiority. Towards this, a major percentage of our budget should be utilised on developing sophisticated technology such as cyber systems, missile systems, area denial weapons systems, etc. In conclusion, one can easily infer that defence is a high-value sector with large profit margins and a plethora of opportunities, especially for MSMEs and start-ups!
Surana & Surana International Attorneys