India conducts two types of defence exhibitions - Aero India and DefExpo - on an alternate biennial basis, to provide glimpses into the world of military and dual-use equipment on a yearly basis, not only to enable the government and end-users (armed forces) to explore the global military market but also for foreign and Indian military vendors to showcase their products for the Indian market-estimated to be worth $300 billion in the next 15 years, at least half of which could be devoted towards acquisition of aerospace assets for state forces. At the eighth Aero India, held last month, as many as 300 exhibitors from 31 countries, 40 foreign delegates and close to 350 Indian companies were present.
It is interesting to note that the Indian defence exhibitions, which commenced during the late 1990s, preceded the wave of ongoing military modernisation programmes (largely equipment-driven thus far) as well as reforms in institutional arrangements in the higher defence sector. Global trends suggest that while major military powers organise such events (examples include aero shows in Farnborough, Paris, Moscow, Berlin), the linkage in military market transactions between buyers and sellers is largely synchronised with a thrust on exports. The same level of maturity or state objectives are hard to find in other countries (like Dubai or Singapore). India falls somewhere in between, as it sees Aero India as a concoction of meeting demands of a huge market and striving to benefit its upcoming aerospace industry, which is largely state-owned.
The Indian aerospace industry largely revolves around a prime contractor - Hindustan Aeronautics Ltd, ranked 34th in the world's top arms companies - and 60-odd medium and small companies as service providers and component suppliers. The emergence of companies like Tata Advanced Systems, Mahindra Aerospace, BEML Aerospace (a subsidiary of the state-owned defence major BEML), Taneja Aerospace, Dynamatic Technologies and even Jubilant Organosys is a good indicator of the private sector's involvement in defence production. Such companies are largely eyeing the offset work accruing from large aerospace contracts, which could be worth $30-35 billion by 2025. The emerging Indian aerospace industrial landscape seems to be becoming the maintenance, repair and overhaul (MRO) hub in Asia, while its actual aim should have been a globally competitive system integrators' nerve centre in aerospace products. This is where Aero India's biggest challenge lies.
On the positive side, Aero India 2011 provides a basket of choices for the forces to opt for their future requirements. This is firmly backed by a growing military capital budget for the forces, which has been growing 15% annually for the last five years to touch R70,000 crore this year. Also, natural scientific ideas need as much interaction with the world as their social science counterparts, and for the cross-fertilisation of both for universal advancement in science. The Indian military technology domain has been struggling for long in isolation. Conferences organised by DRDO and its constituents during Aero India bring in desirable scientific knowledge. And, the event brings in a sense of healthy competition in attracting knowledge, investment, manufacturing capabilities in the aerospace sector in major cities in India. It is interesting to note that Hyderabad is now competing with Bangalore in attracting investments in the aerospace sector.
Aero India 2011, however, raises a few issues for future debates. First, should aerospace modernisation be a national priority as India enhances its hard power? An affirmative answer validates the significance of Aero India. However, such fundamental issues need to be debated beyond the confines of the government. Second, historically, great powers invariably possess robust domestic arms industries. Should India follow the same? India must adopt a healthy balance by encouraging its domestic manufacturing as well as R&D sectors, which in turn calls for consistent substantial allocations for indigenous military R&D. Military R&D accounts for less than 6% of the defence expenditure, which is very little if pitted against aspirations.
Third, as the Indian arms market looks increasingly lucrative, it is natural that many companies - without previous records in arms manufacturing or supply - would raise their stakes, along with established players. Prudence suggests that the state must encourage the latter first, before it gives space to the former. Fourth, war fighting capabilities stand at the lowest in the innovation spectrum, which is embedded in the larger defence sector, especially in doctrines, training, industrial infrastructure, institutional arrangements and defence R&D. Military exhibitions tend to overemphasise equipment while larger defence innovations take a back seat. Aero India should strive for a right balance between the two. Fifth, military exhibitions are a good place for declaration of state intentions on larger military industrial and acquisition issues. Hence, the state should take the lead in laying out a vision for the sellers to follow. And last but not the least, the state must shed its exclusivist approach and instead embrace an open, collaborative model for the defence industry. Aero India 2011 has shown glimpses of this changing mindset. It must evolve further to reach the next level of maturity.
(The author is a senior fellow in security studies at Observer Research Foundation)
Courtesy: Financial Express
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