Friday, 17 May, 2024
By: Anshul Vipat
The armed forces have completed three rounds of acquisitions which includes drones, battle tanks and other defence equipment. Image Source: IANS
The Indian armed forces have now begun its preparations for the fourth round of emergency procurements.
In August 22, Ministry of Defence’s (MoD) Defence Acquisition Council (DAC) had ‘granted’ emergency procurement power to the armed forces to buy, preferably from the Indian sources, any kind of equipment urgently needed by them to deal with the situation in eastern Ladakh which has been tense since the Chinese intrusion in the Galwan Valley in June 2020. The armed forces have completed three rounds of acquisitions which includes drones, battle tanks and other defence equipment.
The Indian armed forces have now begun its preparations for the fourth round of emergency procurements. However, this time the purchases will be entirely from the domestic industry, the army chief General Manoj Pande said. The army has placed its bet on the indigenous products and plans to place orders worth Rs 8 lakh crore with Indian industry. But, is the domestic defence industry ready to take up the challenge?
How 'atmanirbhar' is defence industry?
In 2022, the Stockholm International Peace Research Institute (SIPRI) released its yearly report on arms production capabilities. According to the report, 84.3 percent of the major conventional arms procured by India in 2016-2020 were of foreign origin, of which licensed production accounted for 57.8 percent. In a stark contrast, the domestic procurement accounted for a mere 15.7 percent of the total procurement.
Among the five segments monitored by SIPRI, the domestic shipbuilding industry stood out as a shining example of India’s potential in designing and manufacturing major platforms. Most of the ships delivered during the aforesaid period were based on Indian designs. And so was the nuclear-powered ballistic missile submarine Arihant which gave ‘India’s nuclear forces a high level of autonomy’.
Unsurprisingly, the domestic shipbuilding industry accounted for 78.6 percent of the total volume of procurement of naval vessels.
What is the government doing?
The below chart gives us a brief about indigenous production. The defence production in India was at an all-time high during 2017-18 at $12.2 Billion. There was a decline in the defence production in 2018-19 and 2019-20 thanks to the COVID-19 pandemic. The defence production then increased to $10.9 Billion in the year 2020-21 and then dropping again to $11.85 Billion in 2021-22.
However, the government is taking prominent major in the last couple of years to fire up its domestic defence capabilities. Post the launch of 'Atmanirbhar Bharat', the govt has massively increased its defence capital acquisition. For the fiscal year of 2022-23, the Union Budget allocated Rs 5.25 lakh crores for Defence — 9.8 percent higher than the budget estimates of last year. Of this, the revenue allocation was Rs 2.33 lakh crore, capital allocation Rs 1.52 lakh crore, and defence pensions Rs 1.19 lakh crore.
Under capital allocation for new procurement and past payments, 68 was reserved for procurement from the domestic industry, and 25 percent of this was reserved for the domestic private industry.
Currently, India’s defence and aerospace manufacturing market is worth Rs 85,000 crore with a private investment of Rs 18,000 crores. The Ministry of Defence has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defence goods and services by 2024, including exports of Rs 35,000 crore. The value of defence exports in 2020-21 is Rs 5,711 crore.
The problem
While the government investment is appreciated, the age old problem of bureaucracy and red tapism remains. Frequent delays, logistical shortfall and budget overruns has been a cause of concern. Some time back, Indiatracker had done a detailed analysis of how modernisation budget for the armed forces was cut down. This enormous delay is forcing our security forces to continue using sub-standard and age-old equipments which has resulted in crucial loss of lives.
There is no doubt that the country has a lot of potential, thanks to our immense improvement in technology and manpower. But the long gestation period associated with any big-ticket defence acquisition, bureaucratic hurdles and budget problems poses a huge challenge. If India wants to establish itself as a military firepower, all it needs is a seriousness from New Delhi.
