The 126 new fighter jets India is seeking promise to deliver wings of fire. Not only will they add to our air power, but they hold the potential to alter defence production and weapon indigenization in a manner unlike the past. It’s also time to shake the domination of the government companies in the defence sector.
The proposed aircraft deal may help in this change. In the years to come, India may end up spending some $40 billion on defence hardware. In comparison, in 2007-08, the defence services expenditure —of which hardware is just one part—will be roughly $23 billion.
Big defence companies such as Raytheon and Boeing are already tying up with local partners such as Tata Power and Larsen & Toubro. The possibilities of developing defence technologies by the private sector and rapid learning are very real.
For such knowledge externalities and spillover effects to be beneficial, it is important that the private sector is involved in indigenizing efforts in a big way; it will not do to merely hand over the big tasks to Hindustan Aeronautics Ltd (HAL) and throw the crumbs at private players. If this is not done, this learning experience will be of no use: HAL is a closed organization, one that has few successes under its wings. The private sector may not be involved in production of aircraft, but there is no reason why it cannot work with key subsystems such as avionics, which involve a spectrum of technologies. Indian companies have a fair degree of technological sophistication and any scientific challenges will be more of a learning experience rather than production bottlenecks.
Separation of procurement and production efforts broadly along tactical and strategic weapon lines is something the government must now seriously consider. India has a better track record in developing strategic weapons such as Intermediate Range Ballistic Missiles (IRBMs) (Agni series) and naval vessels of certain classes. It is best to devote money and effort in indigenously developing and producing such weapons.
Weapons such as short-range missiles, battle tanks, armoured carriers and aircraft, among other items, are best procured from reliable suppliers. Here, India enjoys an advantage few others have: It can source its requirements from two big rival players that produce all that it needs.
Russia has been a long-term partner in this and the US is more than keen to do business with India. Globally, the practice is to balance procurement from a basket of suppliers with ease of integration in various platforms.
Arguments about security of supply and “over-reliance” on a single country should not be listened to in these circumstances. The situation that prevailed in the 1970s when technology control barriers were very high, does not exist now, at least for India.
In view of these possibilities, it’s time the single buyer, single producer model, prevalent since 1947, was ended. It spawned inefficiency and delivered little. Project deadlines came and went, parameters were changed at will and cost overruns were rampant. The Light Combat Aircraft is just one visible example. It’s not fair to single out one organization for such failures; the system could not deliver what its customers, the armed forces, wanted. It was a runaway bureaucracy.
As written earlier, India should focus on strategic weapons such as IRBMs and the nuclear submarines. These are devices that any country would be reluctant to part with. For developing these, we need to spend money. This, however, needs to be done cautiously and in a manner that makes use of all available talent. It’s best not to spend all the money in a single agency that has no competition. Even the Soviet Union was careful to have two different aircraft design bureaus, the MiG and Sukhoi teams. India needs to learn this.
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