In major defence reforms, govt pushes for desi arms

The armed forces will now have to willy-nilly shed their penchant for exorbitant foreign weapon systems and platforms, unless they can be made in India through joint ventures with global armament and aviation majors.

This was the unequivocal message in the announcement of some long-pending defence reforms by the government on Saturday, which ranged from banning the import of certain weapons through a progressively-expanding negative list to significantly hiking the FDI limit to 74% from the existing 49% in the defence production sector through the automatic clearance route.

Several global arms majors have for long been demanding the hike in the FDI limit on the ground that they need “more management control” of the JVs to step up investments and provide top-notch military technologies to India.

India has attracted a paltry Rs 1,834 crore as FDI in the defence and aerospace sectors since 2014. In the same timeframe, the country has inked over 120 “capital procurement” contracts roughly worth around Rs 2 lakh crore with foreign armamentcompanies.

India, with an annual defence budget of about $70 billion, is behind only the US ($732 billion) and China ($261 billion) in terms of military expenditure around the globe. It is also the second-largest buyer of foreign weaponry after Saudi Arabia in the world, accounting for 9.2% of the total global arms imports during 2015-2019.

This will no longer do, declared finance minister Nirmala Sitharaman on Saturday, though some cutting-edge weapons will continue to be imported. India will stop importing arms that can be made indigenously to reduce the “huge defence import bill”, with a thrust also on domestically manufacturing even the expensive spares of the imported weapons. A separate capital budget, in turn, will also be created to buy indigenously-produced weapons, she said.

"We will notify a list of weapons and platforms for ban on their imports and fix deadlines to do it,” she said. The negative list, to be prepared in coordination with the newly-created department of military affairs led by chief of defence staff General Bipin Rawat, will be expanded every year as domestic production capacities grow. Among the first lot of weapon systems to be included in this list are likely be artillery guns and some types of helicopters, said sources.

A clear indication of these big-bang reforms, with the renewed thrust on “Make in India”, had come in the exclusive interview of Gen Rawat published in the May 10 edition of TOI.

The 15-lakh strong Indian armed forces, which do not have an “expeditionary” role, have to get rid of their overwhelming dependence on foreign arms and refrain from framing “unrealistic” technical parameters or GSQRs (general staff qualitative requirements) for weapon systems that DRDO-domestic industry cannot deliver in specified timeframes, Gen Rawat had told TOI.

Sitharaman, on her part, said there would be a time-bound defence procurement process, with “faster decision-making” through the setting of a “project management unit” to support contract management, “realistic” framing of GSQRs and overhauling of the cumbersome trial and testing procedures. Unrealistic GSQRs often result in a lengthy search for weapons and lead to single-vendor situations that are against the rules, she said.

The 41 factories under the Ordnance Factory Board (OFB), which with an annual turnover of around Rs 19,000 crore is the main source of supply of arms and ammunition for the Army, will also be “corporatized” to improve its “autonomy, accountability and efficiency”, she said, stressing that it did not mean “privatization” in any way.

The Army had last year sounded the alarm over the unacceptably high number of accidents and casualties taking place in the field due to the poor and defective quality of ammunition being supplied for tanks, artillery, air defence and other guns by the OFB, as was then reported by TOI.

The long-pending draft note for the Cabinet Committee on Security on corporatizationof the OFB says it would help increase the state-owned entity’s turnover to Rs 30,000 crore by 2024-25, enhance its exports to 25% of the turnover, and increase self-reliance in technology from the existing 20% to 75% by 2028-29.

TOI