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India’s missing weapon makers

India’s missing weapon makers
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First Published: Mon, Mar 14 2011. 09 57 PM IST
Updated: Mon, Mar 14 2011. 09 57 PM IST
Unlike most parts of the world, India’s defence requirements are acute. A challenging neighbourhood and the country’s geographic spread ensure that it remains a big buyer on the global arms bazaar. The latest data from the Stockholm International Peace Research Institute (Sipri) shows that between 2006 and 2010, it was the world’s biggest importer of conventional weapons, accounting for 9% of global arms imports—much ahead of its rivals in South Asia.
What this trend shows is the failure of the country to indigenize defence production, let alone create a defence industrial complex that almost all major powers have done in their history. While there has been abundant lip service to the idea of self-reliance in defence systems, in reality the country’s inabilityis painfully visible.
Admission of this failure has been slow. Almost a decade after the Soviet Union broke up, India permitted 26% foreign direct investment (FDI) in the sector. It did not work. Even after permitting FDI in defence production, the country’s planners continued to demand that foreign suppliers of hardware invest/spend a percentage of their contract value in India. This so-called “offset” policy was a thinly disguised effort to piggyback on foreign providers of equipment to give a push to the domestic defence industry. The idea was flawed in principle: how could outside sellers create a local industry when decades of government investment and pushing did not do the trick? The mistake was to assume that money could clinch the issue while the problem of the “missing” industry lay elsewhere.
FDI flows were expected to solve another problem: that of diversifying the country’s supply basket. Until 1991, India had been heavily reliant on the Soviet Union for almost all its weapon purchases. The Sipri data shows this continues even now. In the 2006-10 period, Russia accounted for 82% of conventional arms supplies. This may change in the years ahead as the US begins edging into the space occupied by Russia. This, however, has little to do with permitting FDI in the sector and has more to do with the political proximity between the two countries.
Any country’s need for weapons has to be evaluated rationally in response to its requirements. This requires not only year-by-year purchases, but also multi-year, if not decadal, perspective planning. Instead of being dogmatic about how it procures weapons, the focus should be on projecting future requirements, their potential suppliers and much better inventory management.
Has the “offset” policy harmed defence preparedness? Tell us at views@livemint.com
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First Published: Mon, Mar 14 2011. 09 57 PM IST
More Topics: Ourviews | India | Defence | FDI | SIPRI |