India is the largest importer of defence equipment in the world. It is therefore evident that the domestic industry is not being optimally utilized to meet the country’s defence requirement.

1. Armouring India: Indigenisation of
India’s Defence needs
G Raj Narayan
www.grajnarayan.com
twitter.com/grajnarayan

2. A look at the feasibility of complete indigenisation of India’s
defence needs
India is the largest importer of defence equipment in the
world. It is therefore evident that the domestic industry is
not being optimally utilized to meet the country’s defence
requirement. Currently, the domestic defence production is
met by 41 factories of the Ordnance Factory Board (OFB) and
nine Defence Public Sector undertakings (DPSUs) under
Department of Defence Production with various units across
the country. In addition to this 194 industrial licenses have
been issued to 121 private sector companies.
The buzzword today is indigenisation but this is more a
fashionable word than work-in-progress. While we jump on
to the bandwagon of indigenisation let us truly understand
the concept. Indigenisation starts with identifying critical
equipment and systems that are being imported”, and then
to either reverse engineer these products or design them
from scratch using our own knowledge and expertise.
Over the last five decades, the Indian Government has been
pursuing the acquisition of new technologies as part of
manufacturing licenses from foreign companies. While this
has resulted in valuable exposure to the manufacture of
state-of-the-art products, as in the case of the Mig-21 and
Su-30, Transfer of Technologies (ToTs) have rarely included
design technologies of the manufactured product. What is
transferred is only the manufacturing technology.

3. It is therefore up to the Indian partner to either reverse
engineer or decipher the technology behind the design in
order to lead to future indigenous designs.
Technology to manufacture is distinctly different from the
technology involved in design. Manufacturing of various
parts and systems involves mechanical fabrication and
machining, assembly of electronic modules and equipment,
testing and qualifying to rigid and stringent quality standards.
Very few industries in the private sector have exposures to
such specialised standards and processes as are applicable in
defence equipment. Hence, the need of the hour is to attract
more private sector enterprises, more particularly the
MSMEs, to this field.

4. With the competitive growth of the
Indian MSME environment, many of whom have highly
sophisticated machineries and equipment, and possess
specialised expertise in their own small areas of operation,
there are many examples of truly outstanding firms who are
now manufacturing industrial parts and equipment not only
for Indian consumption, but also exporting them to
prestigious companies globally.
The technical competence of Indian MSMEs is therefore no
longer under question. What is required is a nurturing
environment of trust and support going much beyond the
token recognition by way of annual awards by the
government or trade and commerce bodies.
Tweet this: “MSMEs need only to be empowered with the
right kind of exposure and training to raise their capabilities
to the demanding and specialised needs of the defence
industry”.
Such MSMEs will then graduate over time to developing their
own products and processes that would contribute to the
creation of a large matrix forming the supply chain for
indigenous integrators such as the Jaguar aircraft. PSUs or
even the large private sector organisations in the years to
come.
The question of value arising from foreign collaborations and
‘manufacturing under license’ can be answered in
comparison to the automobile sector in India.

5. The entry of Suzuki and Honda into the country for license
manufacture of their vehicles in a collaborative venture with
Indian private companies, introduced not only the Indian
consumer to high quality, state-of-the-art, re-liable and
trouble-free vehicles, but also to modem manufacturing
methods, machineries, human skills and management
systems. The Indian private sector companies have proven
their mettle in absorbing not only the manufacturing
technology but also in developing their own design skills.
Thus, resulting in their ability to leap-frog and compete by
themselves in the global market. Indirectly, this has also
spurred the establishment of a supply chain of ancillaries and
parts manufacturers of global standards. Thanks to this, a
healthy ecosystem of the indigenous automobile industry is
firmly in place. This is what needs to be replicated in the
defence sector too. India is, and will continue to be, an
attractive market for defence related sales for foreign
manufacturers.
However, it is certain that no other country would be willing
to transfer critical, cutting edge technology to India, with the
risk of losing their de-fence superiority as well as financial
returns. The solution clearly lies in factoring in all these
aspects, and pooling of all resources and the best minds in
the military, the public sector, the private sector, the
academia and R&D organisations across the country in a
strategically planned and executed partnership. The political
leadership only needs to set the rules of the game and a level
playing field in a transparent system.

6. Tweet this: “Innovation and indigenisation are literally two
sides of the same coin. Innovation is triggered automatically
when one is forced into a corner”.
This was amply proved by both DRDO and ISRO in the
manner they overcame sanctions and denials of technology
and critical parts for their projects. This should give us the
confidence that the same can be replicated in other de-fence
and aerospace projects.
The MoD, Government of India, should act as a facilitator
and enabler in such a way that it stimulates innovation in
both design and manufacture of defence related products. In
fact, the establishment of a separate category of “Defence
MSME” through a qualification and evaluation process would
by itself lead to their entitlement to financial grants, tax
rebates and lower lending rates for private players
successfully developing indigenous defence projects.
This calls for innovative methods of identifying prospective
enterprises, evaluation of their skills as well as growth
capabilities, special and exclusive funding schemes, training
programmes and other support for rapid growth of such
enterprises. In short, such companies need to be nurtured in
the interest of the country quickly achieving self-reliance.
Tweet this: “Indigenisation and self-reliance in defence
technology is no cakewalk and requires dedicated scientists,
technocrats and entrepreneurs”.

7. The user agencies and armed forces need to appreciate this
and lend a very supportive hand even when either the
performance is slightly below target or delays are
encountered. After all, no organisation takes any pride in
failures and would certainly like to take up the challenge to
improve further and cross the ‘finishing line’. As India has
demonstrated in the automobile sector and space
technology, Indian defence industry can not only increase the
scale of its operation to cater to the domestic requirement
but also export to the global market. The export of the ALH
Dhruv helicopters, though limited in number, proves this
capability.
The new Government headed by a down-to-earth and highly
progressive Prime Minister, Narendra Modi, has shown signs
of a few bold initiatives, that have set a clear direction
towards massive indigenisation of defence procurements in
the years to come. Public-private partnerships should be the
best way for-ward to reach a win-win situation for everyone
concerned. This will pave the way for the best talent to be
attracted towards this industry consequently leading to
industry meeting most of the needs of our defence forces.