Relevance: GS-3: Indigenization of technology and developing new technology

Key phrases: Defense, Indigenous Design, National Security, Self-Reliance, Atma Nirbhar Bharat Abhiyan, Lack Of Strategic Planning, Skewed Decision-Making, SRIJAN Portal, DAP 2020, FDI, Defence Investor Cell.

Why in News?

• Design and development of unique defense capabilities that are tailor-made to meet the Indian military’s requirement is the key to national security as it cannot be achieved through imports, said Prime Minister Narendra Modi as he explained the blueprint to achieve self-reliance in defense.

Context:

• Addressing a webinar on budget proposals related to the defense sector, Modi alluded to the neglect of indigenous design and development in the defense sector after independence that led to the country becoming one of the world’s largest arms importers in recent years. Modi said the development of the local defense industry was critical for national security.
• Idea of self-reliance in defense means if ten militaries have the same equipment then the Indian military will not have any unique thing. Uniqueness and surprise elements can only be there when the equipment was developed in our own country.

Challenges to achieving self-reliance in Defence Sector:

These challenges are:

• Lack of growth in defence modernisation and defence capabilities: Over the years, the pace of defence modernisation in India has remained slow and indigenous production of high-tech weapons continues to be a challenge. This is mainly due to a
  • Declining defence budget towards long term investments, and research and development;
  • Process inefficiencies and delays in domestic production by government lead organizations;
  • The government's reluctance to grant defence contracts to India's private sector.
  • As a result, India continues to rely on foreign imports for high-tech weapons, thereby hindering the development of the indigenous industry.
• Budgetary issues: While India's defence budget has increased over the years, a major chunk is spent on personnel costs such as salaries and pension, thereby shrinking the funds available for defence production. Further, India's budget allocation for research and development remains around 4 %(It was 4% of the total defence budget for 2020-2021). This is much lower compared to capital expenditure by technologically advanced countries like USA and China, which spend 12% and 20% of their defence budgets on research and development, respectively.
• Lack of strategic planning for future needs of the Armed Forces: In the emerging geopolitical scenario, the Indian Armed Forces have to remain operationally ready to respond to border threats. Consequently, the Armed Forces' war-fighting capabilities have to be constantly augmented and the technology in the weapons and equipment has to be updated. In order to meet these needs indigenously, there is a need to strategically and pragmatically plan for the needs of the Armed Forces and invest in long-term development of high-tech weapons. Commentators have argued that this is currently lacking in India's defence policy.
• Production and time delays: Indigenous defence production has been wrought with production delays. For example, India's first indigenously produced Light Combat Aircraft, HAL Tejas, faced a long production delay with HAL requiring a total of seven years to produce 16 aircrafts despite the estimated timeline of four years.
• Hierarchal and skewed decision-making: A 2018 internal report of the Ministry of Defence identified skewed decision-making process, bureaucratic red-tape and multiple decision-making heads as the reason for inordinate delays in defence procurement. Decision-making on issues of national security and defence procurement has been slow and inefficient due to hierarchical complexities, resulting in the slow growth of defence modernisation.

Government initiatives to Self-Reliance in Defence Sector:

• Ministry of Defence has notified a ‘First Positive Indigenisation list’ of 101 items on 21st August, 2020 and ‘2nd Positive Indigenisation list’ of 108 items on 31st May, 2021 for which there would be an embargo on the import beyond the timelines indicated against them. This is a big step to promote indigenisation in defence sector.
• SRIJAN portal to promote indigenisation was launched on 14 August, 2020. As on date, 10,929 items, which were earlier imported, have been displayed on the portal for indigenisation.
• DPP-2016 has been revised as Defence Acquisition Procedure (DAP)-2020, which is driven by the tenets of Defence Reforms announced as part of ‘AatmaNirbhar Bharat Abhiyan’.
• In order to promote indigenous design and development of defence equipment ‘Buy {Indian-IDDM (Indigenously Designed, Developed and manufactured)}’ category has been accorded top most priority for procurement of capital equipment.
• The ‘Make’ Procedure of capital procurement has been simplified. There is a provision for funding up to 70% of development cost by the Government to Indian industry under Make-I category. In addition, there are specific reservations for MSMEs under the ‘Make’ procedure.
• FDI: The Government of India has enhanced FDI in Defence Sector up to 74% through the Automatic Route for companies seeking new defence industrial license and up to 100% by Government Route.
• An innovation ecosystem for Defence titled ‘Innovations for Defence Excellence (iDEX)’ has been launched in April, 2018. iDEX is aimed at creation of an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, startups, individual innovators, R&D institutes and academia and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defence and aerospace needs.
• Government has established two Defence Industrial Corridors, one each in the States of Uttar Pradesh and Tamil Nadu. The investments of Rs 20,000 crore are planned in Defence corridors of Uttar Pradesh and Tamil Nadu by year 2024..
• Defence Investor Cell (DIC) has been created in Feb-2018 the Ministry to provide all necessary information including addressing queries related to investment opportunities, procedures and regulatory requirements for investment in the sector. As on date, 1,176 queries had been received and addressed by Defence Investor Cell.
• Technology Development Fund (TDF) has been created under DRDO to promote self-reliance in Defence Technology through participation of Public/Private industries especially MSMEs and startups.

Way forward:

• To overcome the challenges identified above and support self-reliance in defence production, the government should consider the following suggestions for reform:
• Supporting private sector: To build a defence industrial base, the government should consider supporting the private sector in India and trusting the private sector with bigger and stable defence contracts. Supporting research and development, and design and manufacturing capabilities of the private sector are vital for increasing defence production in India.
• Funds for Armed Forces: Several defence projects are pending due to a lack of funds. The Indian government should consider reviewing the budget allocation for the defence to ensure adequate funds for the three forces relative to personnel costs. In addition, long-term and larger capital investment in the defence production, and research and development are the need of the hour.
• Decision-making and time delays: To overcome decision-making challenges facing defence procurement, the Ministry of Defence should consider a restructuring of the decision-making process. Representatives from the three forces should be included in defence procurement and national security decision-making for a more inclusive and efficient decision-making. Time delays in defence procurement can also be reduced by making structural changes to the decision-making process.
• Self-reliance in defence manufacturing is a crucial component of effective defence capability and to maintain national sovereignty and achieve military superiority. A robust domestic defence manufacturing sector can transform India’s military capabilities and help achieve self-reliance in its defence requirements

Source: The Hindu BL

Mains Question:

Q. Discuss why self-reliance in defence is critical for India's security? Critically analyse. (250 words).