Today Indian defense production on fast track – what changed under the leadership of PM Modi

Indian defense production on fast track – what changed under PM Modi’s leadership
Defense production, defense, air force, navy, army defense production on track – what changed under the leadership of PM Modi.

Five years ago, we were still more than one lakh armed forces as we are today. However, the then Army Chief General VK Singh informed the Prime Minister in his letter on 6 March 2020 that the Army’s preparedness was at a “dangerous level”. There was no guarantee of revival in the shrinking force of the Air Force. The Navy’s much-publicized plan of six submarines being built at Mazgaon Dock and Shipbuilders Limited was lagging behind. 
The army was asking for more than 1800 guns to be replaced, but every reputable manufacturer globally was blacklisted. The air wing of the Navy was barely able to fly. Neither was the Make in India effort, the Defense Procurement Procedure-2009 manual was an old mix that affected private sector participation, exports and offered little for startups and MSMEs. Where are we today.

As we win for a general election, whatever it may be, it must be said that the deck has been cleaned and the tracks are well laid out for the next government to stand in March, 2019.

It is relevant that we recall a meeting in early 2020 with an MP from the opposing camp.

Speakers at a seminar organized by us. The seminar focused on innovation in the defense sector. The draft DPP-2020 defense procurement process was already on the net for comments. Out of Parliament, outside the forum the desolate assessment, “DPP-2106 was drafted.” Manohar Parrikar maintained the same momentum and power as the Minister of Defense during his tenure as he did when drafting the document.

Late Defense Minister Parrikar’s biggest achievement was the release of DPP-2020. Defense production in the last five years has increased by 80 percent to Rs 80,000 crore in 2018-19. It was Rs 40,000 crore in 2013-14. Since then indigenization has been the main thrust, with 150 contracts worth Rs 1,27,500 crore being signed with Indian vendors for defense equipment. Acknowledging the need, the first of the major steps that MoD’s (Ministry of Defense) calls for, agreed with the launch of services to their specific needs for 164 proposals worth Rs 2,79,950 crore for domestic requirements has gone.

Defense exports have been given a wide push, although if we have a defense industry, a lot more needs to be done. Growth has been more than modest over the years; Manifold growth in 2013-14, Rs 7180 crore by the end of 2018 in 2013-14. By the end of the financial year, we can reach the five-digit figure.

A hitherto uneven playfield was a major reason for us not participating adequately in the private sector defense sector. DPSU (Defense Public Sector Undertakings) and OFB (Ordnance Factory Board) have been favorites despite their performance. However, although not ideal, the process of change in speed has been determined.

The new Make 1 and 2 processes are attractive options that favor both entrepreneurs and Indian OEMs (original equipment manufacturers). 2 Make that calls for government funding of projects have pulled the industry into some key areas. These include the 125 mm Fin Stabilized Armor Piercing Discoating Sabot (FSAPDS) for the T-72 and T-90 tanks. Ammunition in a tank is important for tank warfare and our lack of holdings was dangerous. Other products offered on the Make2 Planck include infrared search and track systems, upper air sounding systems, and maneuverable expandable aerial targets.

The production of a fair number of items has been de-licensed. More private players have jumped on the bandeauge to benefit from the Armed Forces’ purchase of billions of dollars for their modernization. As of 31 March 2014 there were 215 licensees for defense equipment production. Now, despite the production of a large number of commodities, 424 licensees are not in the area.

Other policy reforms that deserve mention include a strategic partnership model in DPP 2020. Currently, two important proposals have been approved for fighter jets and submarines under this category.

Foreign investment has been increased up to 49 per cent through automatic route and thereafter with the approval of the government.

Recently, 116 items purchased by Defense PSUs have been notified under the Public Purchase Order, giving priority to domestic manufacturers.

The defense testing laboratory and firing range for testing and certifications have been made available to the industry.

Performance of DPSUs and OFB.

At least some of the defense PSUs and OFBs, often cited for their sluggish speed and indifferent performance, are quite important.