The Akash Surface to Air Missile (SAM) and Pinaka Multi Barrel Rocket
Launcher (MLRS) are shining stars on the bleak Indian defence landscape
where nearly 70 per cent of defence equipment is imported. This is
because these two completely indigenous weapon platforms go even beyond
the NDA government's Make in India programme, where equipment can be
assembled within the country by a foreign company that owns the designs.
Yet, for over a year now, orders worth over Rs 19,000 crore for these
indigenously designed developed and manufactured (IDDM) weapon systems
have been caught up in South Block's red tape. The armed forces' intent
to buy additional Akash and Pinaka systems are yet to translate into
contracts.
The armed forces need both vitally. The Indian Air
Force needs the Akash - a supersonic, all-weather surface-to-air missile
which can shoot down enemy aircraft, helicopters, drones and cruise
missiles 30 kilometres away - to protect airfields and vital
installations. Its Pechora missiles acquired from Russia over 30 years
ago are nearing the end of their lives; the army needs six more Pinaka
regiments to augment its firepower. A single salvo from a Pinaka
regiment of 18 launchers can saturate an area of one square kilometre,
35 km away.
But it is within Indian industry that these
indigenous platforms have delivered their true force multiplier effect.
The Akash system is over 96 per cent indigenous and sources its
components from 330 Indian industries. The Pinaka, 92 per cent local,
supports 43 Indian industries.
These orders are so substantial
and the downstream effect on the defence ecosystem so huge that one
private sector CEO calls them the equivalent of a stimulus package for
Indian industry, a massive booster shot that would create jobs in the
high-tech sector, spur innovation and garner huge tax revenues for the
government. And it is here that the delays are making their absence
felt.
This, particularly since the outlook for three other
massive 'Make India' projects for the army-exclusively meant for Indian
industry, both public and private sector-is so bleak and the progress on
them so slow that industry has stopped bothering about them. The orders
for the Futuristic Infantry Combat Vehicle (FICV), a Rs 26,100 crore
project to replace all of the Indian army's 2,600 BMP Infantry Combat
Vehicles, Tactical Communication System (TCS) and the Battlefield
Management System (BMS), were meant to seamlessly integrate soldiers
with their fighting formations and transform the way the Indian army
fought wars when they were mooted a decade ago. They called for
consortiums of public and private sector industry working to develop
indigenous prototypes that would then be turned into series production.
These
projects, collectively worth over Rs 1 lakh crore or one percentage
point of India's GDP, would have delivered a substantial long-lasting
boost to indigenous industry, particularly the development of indigenous
electronics and spurred job creation. One private sector CEO estimates
that every Rs 1 crore invested into the Indian industry has the effect
of creating 25 jobs-six in the high-tech sector and 20 in the unskilled
sector. "In the past 11 years, not one of these projects, FICV, BMS or
TCS, has moved to the development stage, forget production," the CEO
says.
The DRDO's indigenously developed Advanced Towed Array Gun
Systems (ATAGS), a 155x52 mm towed howitzer developed with the private
sector, saw one of its prototypes shoot a shell out to 48 km at the
Pokharan test ranges on September 15, a world record for a gun of its
class. But this gun, too, is still years away from mass production.
The
only substantial Make in India programme in the three-and-a-half year
term of the NDA government has been a Rs 4,500 crore order for 100 K-9
Vajra-T 155/52 self-propelled artillery guns placed on a consortium of
private sector L&T and South Korea's Hanwa Tecwin. L&T undertook
to manufacture all 100 guns within the country, effectively converting a
'Buy and Make' project into a Make in India project.
The sole
low-hanging fruit for Indian industry in the near term are repeat orders
of the Akash and Pinaka. But thanks to bureaucratic delays, it now
seems that even these aren't coming in a hurry.
The Union
ministry for defence sent out requests for proposals (RFPs) for six
regiments of Pinaka MBRLs worth approximately Rs 4,500 crore in March
this year. The two firms, Tata Power SED and L&T, submitted their
bids in April 2017.
As per the terms of the RFP, the lowest
bidder will get four systems and the other bidder, two systems. The
rockets, which cost approximately Rs 3,000 crore, are to be ordered
separately from the Ordnance Factory Board (OFB). Seven months later,
the bids are yet to be opened and a Pinaka order seems unlikely before
March 2018.
A similar fate seems to have befallen the Akash. The
order for seven squadrons of Akash short range missiles for the IAF
worth Rs 6,000 crore is still in the pipeline nearly 15 months after it
was mooted by the government.
The IAF is presently conducting a
cost audit of the Akash, first of prime contractor Bharat Electronics
Limited (BEL) and later of Bharat Dynamics Ltd (BDL), which manufactures
the missiles. Project officials say the meetings have been dragging on
endlessly for over a year now and the IAF is believed to have questioned
the high price of the Akash. In September, IAF officials at a meeting
within Air Headquarters even questioned the utility of the Akash when
the IAF was getting five S-400 'Triumf' SAM missiles from Russia which
had a range of over 400 km. The comparisons, project officials point
out, are unfounded. The Akash is a point-defence missile while the S-400
is an area defence weapon.
Akash, part of the Integrated Guided
Missile Development Programme (IGMDP) in 1983, cleared its user trials
in 2007, nearly 24 years later. The Pinaka had a much shorter
development cycle, initiated in 1986, completing its successful trials
12 years later. Bureaucratic delays have also played a part. The IAF
placed its first orders for the Akash missile in 2011, nearly four years
after the user trials while the army order for the first Pinaka
regiment came in 2006, over a decade after field trials had been
completed and the army had raised its first regiment.
The two
projects are cited as perfect examples of public-private sector
partnerships. BEL in Bengaluru is the prime contractor for the Akash
while Tata Power SED and L&T are the prime contractors for the
Pinaka. Each of them, in turn, engages several other private sector
firms down the value chain. Project officials estimate that at least
half the cost of the orders will be ploughed back into the country in
the form of taxes and salaries. "You're talking of value-addition at the
highest level because R&D creates its own multiplier effect in the
economy," says a private sector CEO. The huge time lag between repeat
orders is illustrative of the dangers of a monopsony (where the
government is both the largest maker and the only consumer) which
disincentivises the private sector. The stop-start malaise has endured
despite the NDA government's commitment to indigenous systems and the
fact that all its three defence ministers, Manohar Parrikar, Arun
Jaitley and Nirmala Sitharaman, have enthusiastically backed Indian
systems.
Defence minister Parrikar firmly backed the Akash and
the Pinaka. He cancelled the army's import of two regiments of Quick
Reaction surface-to-air missiles and insisted that the army buy the
Akash instead, initiating the case for buying 10 regiments of Pinakas in
2016. But with Parrikar's departure from South Block in March this
year, both indigenous systems lost a champion, and bureaucratic delays
pushed the acquisition cases further down the horizon.
"We need a
secretary-level official to monitor indigenous defence products. The
job of the MoD's department of defence production has to change from
running the department to pushing indigenous industry," says Rahul
Chaudhry, chairman of the Defence Innovators and Industry Association
(DIIA) and CEO, Tata Power SED.
The Akash has not been without
its share of controversy. A CAG report tabled before Parliament in July
this year found that the missiles had a 30 per cent failure rate. A
senior Indian industry official associated with the project called it
part of the 'stabilisation process of an indigenous product'.
Swift
orders are essential to continue the pace of production. Red tape has
delayed Indian defence orders to a point when original equipment
manufacturers have closed down their production lines.
Defence
website Stratpost.com reported in 2013 that India's nearly Rs 5,000
crore order for 145 M-777 howitzers saw a 37 per cent cost escalation of
roughly Rs 1,200 crore because the manufacturer, BAE Systems, had to
restart a production line it had shut down.
This is also the case
with the Akash and Pinaka. "The order for the seven squadrons of Akash
were to have come in March 2015, over two years ago. But we are now
sitting idle on the Akash. Our supply chain is also sitting idle," says
the head of a private sector firm who supplies components to the Akash
programme. Another contractor for the Pinaka rocket launcher system says
he had last sourced components from his supply chain in 2009 soon after
completing the last orders. "If I get the Pinaka order today, it would
have been nearly a decade and I will have to locate all those old
vendors."
Support for indigenous projects ensures advanced
versions can come off the line quickly. In January this year, the
Armament Research and Development Establishment of the Defence Research
and Development Organisation (DRDO) successfully tested a modified
Pinaka Mark-2 rocket. With the addition of navigation, guidance and
control kit, the earlier rocket was converted into a mini missile with
fins and a guidance kit capable of hitting targets 55 km away. An
Akash-2 missile with an advanced seeker and enhanced 40 km range is in
the works. Given the delays in the acquisition process, however, their
swift induction is by no means guaranteed.
indiatoday
