SETTING THE STANDARDS HIGHER

AMIT COWSHISH argues why an overarching agency like the proposed Defence Capability Acquisition Organisation is required at the earliest to coordinate indigenisation efforts, ensure deeper involvement of the private sector, develop nimble procedures, provide generous funding, and engage with other scientific institutions, innovators, foreign entities, and the academia

There has been a renewed effort in the recent years to achieve Atmanirbharta, or self-reliance, in defence T production. As a part of the 'Make in India' campaign, the Ministry of Defence (MoD) has been encouraging the Indian industry to undertake indigenous design, development, and production of defence materiel. From 1990s, when a committee set up under Dr APJ Abdul Kalam (later the President of India) suggested a 10-year roadmap to reduce the expenditure on imports from contemporaneous 70 percent to 30 percent of the capital budget by 2005, MoD has come a long way in reducing the value of imports.

Between the years 2010-11 and 201920, the average annual expenditure on capital procurement from foreign sources was less than 43 percent of the total procurement, implying that approximately 57 percent of the budget was spent on procurement from the Indian companies. During the FY21, approximately 68 percent of the budget was spent on local procurement up to the end of January 2021 for which data is available. During the current year, 58 percent of the capital procurement budget was reserved for the domestic companies, which has been raised to 68 percent for the FY23.

These figures unequivocally indicate increasing levels of defence manufacturing in India. However, these do not signal indigenisation of defence production in the true sense of the word.

For one thing, local manufacturing has considerable dependence on transfer of technology (ToT) from the foreign vendors. And for another, some major equipment and platforms continue to be imported despite increased defence manufacturing within the country.

To put it in perspective, out of 213 contracts concluded between 2016-17 and 2019-20, as many as 90 contracts worth about Rs 1,76,569.10 crore were awarded to the foreign vendors from USA, Russia, Israel, France etc.