On 5 August 2021, Indian defence reached a milestone with the sea trial of its indigenous built first aircraft career INS Vikrant, a military facility hitherto thought to be too expensive a proposition requiring too much know-how to envisage for an emerging economy. Memories of India’s acquisition of Admiral Gorshkov, which was renamed as INS Vikramaditya, from Russia flashed before the collective eyes of the nation, as it had to go through the Soviet-era laggard manufacturing and service procedure, which resulted in several cost overruns and missed deadlines. With that harassment in the past, India has become only the seventh country to develop the capacity to design and build a carrier. While the cost of Rs 23,000 crore may come across as prohibitive, the Cochin Shipyard in the last 18 years of building the giant saved the country not only money but also a compromise with foreign carriers which they sell at a time when it is nearing decommissioning. This is a good time to do defence equipment manufacturing stocktaking once again.
The NDA 2 government has taken to its logical conclusion the policy transition of May 2001 by the Atal Bihari Vajpayee government to open up the defence industry to 100% private participation. In these 20 years, 333 private companies have got industrial licences. India is taking recourse also to domestic procurement, which has increased, with spending going up in absolute terms. Following the mantra of Atmanirbhar Bharat, roughly 63% of the Rs 1.39 lakh crore procurement budget went to domestic manufacturers this ongoing year. In the case of the IAF, for example, HAL supplied 61% of the airborne fleet in use by defence services. But much of these are foreign-made stuff built under licence in India. What the nation cannot lose sight of is the fact that in the period 2001-20, the Stockholm International Peace Research Institute’s database showed India as the world’s largest importer of arms at an aggregate value of $ 52.8 billion. While we lack adequate capabilities of design and development of major platforms, the DRDO and ordnance factories notwithstanding, our defence services cannot afford to keep waiting in the name of self-reliant production for the simple reason that enemy nations will not postpone their designs on us in consideration of our limitations. Imports such as France’s MRCA Rafale — after Mirage 2000 — Russia’s S-400 air defence system, the US’s fighter helicopters, etc are emergency requirements. The defence indigenisation must move up the value chain in a fiscally prudent manner, which implies that the spending commitments cannot remain lopsided. We cannot have lean and mean forces if, as in 2011-12, 49% of the budget goes to salaries and pensions and just 27% to arms acquisition, which is now worse with 61% of the budget for salaries and pensions and 19% for buying arms. The argument that there must be men to use these machines is specious. Technology can enable a smaller human input and yet keep the defence and attack capabilities formidable.
Thankfully, the 15th Finance Commission already advised the creation of a non-lapsable defence fund, the modalities of which must be finalised. This will insulate defence spending from short-term fiscal pressures. A closer engagement between the government and domestic manufacturers will facilitate the process. The government cannot look at the expenditure the way consumer spending is analysed. A strong defence merits large spending. On the scientific front, the prowess of private players such as Tata and Larsen & Toubro will be tested. These private companies were not roped in only because they had faster processes but also so that one day India has its own Boeings and Lockheed Martins.