Out of fire power?

PM Modi’s pet project ‘Make In India’ tottered into its third birthday a few days ago but there wasn’t much to celebrate. Launched with much ado just four months after Modi took over as the PM, it was projected as both a nationalistic slogan and an economic vision for the nation. However, three years down the lane, results are lacklustre and most predictions about economic revival, burgeoning employment opportunities and increased share of manufacturing in GDP remain unconsummated.

In February 2015, Modi took it upon himself to drum up support for ‘Make In India’ in the defence production domain (one of the 25 components of the programme) by inaugurating the Aero Show in Bangalore (this was only the second time that a PM had graced the show, a meeting point for defence and aerospace industries).

His speech was an enticement to Indian and international entities to ‘Make In India’ and held out much promise of ease of business, dwindling red-tapism and manufacturer-friendly regulations. The sense of urgency that India’s state of defence preparedness vis a vis its two antagonistic neighbours mandates appears to be missing.

In February 2016, the much-awaited Defence Procurement Procedure 2016 (DPP 2016) was unveiled at the Defexpo 2016 in Goa, but it was evident that the Government had been under pressure to meet that deadline because the all-important chapter on Strategic Partnership (with private entities) was conspicuous by its absence. After inordinately long procrastination (which involved discussions with private entities who had some serious disagreements with the Government vision of the Strategic Partnership model), the final policy was announced on May 31 this year, but some loose ends still remain to be tied up. Clarifications are expected soon especially on the clause which says that “only one SP would generally be selected” in each of the four segments declared so far.

Private companies are raring to have a go at juicy contracts in collaboration with foreign Original Equipment Manufacturers (OEMs); the benefits for Indian entities of learning from their foreign partners will include work cultures, management techniques and profit orientation but most of all the tangible benefit would be transfer of technology.

As far as defence aerospace industry is concerned, Hindustan Aeronautics (HAL) has largely been content with license production of foreign aircraft and transfer of technology has not been high on its priority list. Even the Rafale deal involves no transfer of technology while all the offers (F-16/ F-18, Grippen) of setting up aircraft manufacturing lines in India are also very unambiguous about not sharing leading edge technology; hard negotiation lies ahead for Indian entities.

It is impossible for India to become a major power unless it is a major industrial power first; leading edge capabilities in aerospace and defence production are essential and that is the thrust that ‘Make In India’ needs to provide to India’s defence production capabilities. Technology transfer is thus the key to success for ‘Make In India’ for defence and partnerships would have to be located so as to maximise technology transfer — a motivation that would militate with the Indian private industry’s profit orientation.

The writer is a former IDSA senior research fellow and a retired IAF officer

COMMENT NOW