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Defence Indigenisation - Enhancing the Effectiveness of Indian Defence Sector

Updated: Oct 9, 2023

The Indian government has taken a lot of policy initiatives in recent years and brought reforms to promote research and development of the indigenous defence industry, consequently promoting self-reliance in the country. The Indian defence industry is currently capable of producing numerous high-end equipment like tanks, armoured vehicles, firefighter aircraft, helicopters, warships, submarines, special alloys, steel, and an array of ammunition.


aatmanirbhar bharat

Image Graphics by Team Geostrata


Rapid progress has been made towards achieving " Atmanirbharta" in the defence manufacturing industry. Plenty of innovative equipment have been developed as a result of Atmanirbharta initiatives, like the 155 mm artillery system "Dhanush", the surface-to-air missile system "Akash," and the "Arjun" main battle tank.


Attaining self-sufficiency in defence manufacturing will ensure the long-term security of our country along with boosting the Indian tech industry engaged in defence production. The key benefit of defence indigenisation would be vital reduction in the budget deficit, ensuring the safety of permeable borders from hostile neighbours, employment generation and incresed sense of integrity and sovereignty amongst the Indian defence forces.


MAJOR TURNING POINT IN INDIA'S DEFENCE INDIGENISATION


With increasing conflicts with China, India has realized the significance of framing defence policies and has materialized it by laying a well-rooted foundation of defence indigenization. The Make in India concept has been fruitful for the Indian economy.


For the first time since independence, in 2017, India introduced big ticket indigenous weapon platforms and systems to include medium guns, radars and surveillance systems, battle tanks, rifles, night vision devices, fighter aircraft, combat helicopters, trucks, armoured personnel carriers and many more.

Since then the private sector's contribution to the defence industry has been increasing annually. The superior status accorded to the public sector undertakings has been withdrawn, instead, PSUS has now commenced aiding private sector enterprises in manufacturing some complex defence systems. The 41 ordnance factories were merged into seven Defence Production Public Sector Units- thus doing away with a 246-year-old legacy, that caused setbacks and perpetuated inefficiency.


The role of Medium and Small Enterprises (MSMEs) was recognized. The defence services became facilitators in letting the MSMEs be aware of their requirements. The MSMEs were brought in contact with defence personnel to understand the finer aspects of the products they wanted. The government earmarked 25 percent of the Research and Development funds for the industries. Portals like IDex and Srijan were hosted for the prospective vendors.


On the indigenization front, the induction of Tejas into IAF provides an interesting case study when contrasted with earlier attempt to induct HF 24 -Marut. The Government announced progressive plans to replace all the Mig 21s, 29s, Jaguars, and Mirage 2000s with Tejas Mk II in the near future. Furthermore, India would be developing its own fifth-generation fighter aircraft. A number of countries have shown interest in buying Tejas from India.


The Indian Defence Minister said that 68% of the capital budget for defence is reserved for indigenous defence manufacturing. The DRDO has set up centers of excellence for young scientists. A total of 37 projects have been awarded to various industries mainly in the MSME sector. The government also plans to fund at least 250 start-ups in the defence sector. The Prime Minister commissioned India’s indigenously developed and manufactured aircraft carrier Vikrant – with a new Indian Navy Flag dedicated to the memory of The Great Chhatrapati Shivaji.


WHY IS IDIGENISATION SO VITAL DURING GLOBALISATION?


The structure of Geopolitics is changing. The ongoing Russia-Ukraine conflict has exposed the dilemmas of globalisation. Therefore, India can’t afford to depend upon the external supply of equipment and critical defence equipment. Thus, pushing for localisation of production is essential, which will generate large and sustainable opportunities for domestic industry.


India is the largest importer of arms with 11% of total global imports, and has a critical dependency in the defence sector on Russia, France, Israel, and the US. As the conflict in Ukraine sounded the alarm about the need for self-sufficiency in defence technology, India's localization efforts have gained momentum. Thus far, India has published three negative import lists, covering 310 items that will now be manufactured in the country.

Starting with platforms like Naval Utility Helicopters (NUH), Medium Endurance Drones (MALE), Light Tanks, and Unmanned Underwater Vehicles to high-end sensors like Multi-function Surveillance and Guidance-A-Radar-STAR), various missile systems, India has embarked on an ambitious journey to create a massive military-technical infrastructure over the next decade.


Since technology is an essential component of any military equipment, the Indian tech industry and technology start-ups - are set to prosper and expand as a result of import substitution. Remarkably, in the last two years, the DRDO has participated in over 1,430 technology transfer agreements with Indian businesses, 450 of which have been finalised.

This ISlicy change combined with increased public-private collaboration, is part of the high-end engineering design being done in the country.


Indian engineering services companies can offer solutions such as digital systems engineering and electronic system design that enable higher product performance along with making the products faster and safer, while also helping to further modernize the country's defence engineering industry. The day is not far away when Indian engineering services companies can enable 'Make in India' for the defence sector.


25% of the budget for Research and Development in defence has been reserved for industry, start-ups, and academia in this year’s budget, it is expected to give a big boost towards innovation. Startups like Astrome, Idea-Forge, Botlabs, etc., are developing competitive technologies that can be successfully used in the strategic sector.



KEY INITIATIVES IN DEFENCE INDIGENISATION:


DEFSPACE MISSION

India’s Space Defence initiative, Mission DefSpace was launched by Prime Minister Narendra Modi during DefExpo in October 2022. The goal of the space programme is to use industry and startups to further India’s preparation and position the nation for potential future space endeavours.


Mission DefSpace was launched with 75 Defence Space Challenges that have been categorised into existing DDP initiatives of iDEX, Make-I and Make-2. The challenges, grouped into five categories—Launch System, Satellite System, Communication & Payload System, Ground System, and Software System—provide a comprehensive 360° overview of space.


INNOVATION FOR DEFENCE EXCELLENCE (iDEX)

The Innovations for Defence Excellence (iDEX) framework was introduced by the government with the objective of encouraging innovation and technology development in the defence and aerospace industry by involving industries MSMEs, startups, independent innovators, R&D institutes, and academic professionals and fostering self-reliance. Through the Defence Innovation Organization, the goal of the program is to financially support approximately 300 startups, MSMEs, and individual innovators (DIOs).


SRIJAN

Defence Minister Rajnath Singh launched SRIJAN, the Portal of the Department of Defence Production, in 2020. It is a one-stop online portal that provides access to the vendors to keep track of items that can be taken up for indigenization. The portal presents data in a structured manner, including the name of the item, an image, and specification, import values, a NATO Classification (indicative), etc. There is a search function as well.


DEFENCE INDUSTRIAL CORRIDOR

To achieve defence self-reliance in line with the Make in India initiative, the Center has developed two defence industry corridors (DICs)—one in Uttar Pradesh and the other in Tamil Nadu. Through these DICs, the government wants to create a defence production ecosystem.


The aim is to have a strong supply chain to promote production, testing, and certification in order to promote economies of scale and the growth of globally competitive domestic enterprises. All key sectors of the defence manufacturing ecosystem have benefited from initiatives, with a strong focus on localization and sourcing from local companies.

CONCLUSION


With defence sector imports falling to an all-time low of 36% in 2020-21, India is achieving its declared vision of self-reliance in the sector. In 2022, India had only two companies (HAL and BEL) among the top 100 global defence manufacturing companies. The United States has 48 companies on this list and China has 7. Apart from this India needs to heavily invest in some dual-use technologies (used for weapons systems as well as other wealth-creating industries). The upcoming semiconductor manufacturing center in Gujarat (a joint venture between Vedanta and Foxconn) is one such big step in the right direction.


The end products from this hub will not only feed the consumer electronics sector but also find their way into weapons platforms and systems. Essentially, India must soon shed the label of being a third-world developing country and become a developed country with a GDP per capita almost five times what it is today. Nevertheless, the country has a long way to go to create high-tech weapons and defence equipment.


 

BY BHAVISHYATA MENDIRATTA

TEAM GEOSTRATA

info@thegeostrata.com

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Cian Elliott
Cian Elliott
19 Haz 2023

I admire India's stride towards defence indigenisation, with its "Atmanirbharta" initiatives, burgeoning startups, and substantial policy reforms. This shift from being a major defence importer to cultivating local production not only fortifies national security but also spurs technological advancement. I believe the integration of MSMEs and the private sector invigorates India's defence ecosystem, triggering economic growth and job creation. Yet, the persistent dependence on international sources for critical technologies underscores the need to amplify indigenous R&D and innovation. While significant strides like the Tejas aircraft and the Gujarat semiconductor hub indicate progress, India's quest for comprehensive defence autonomy and high-tech weaponry development is a work in progress.

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