Defence Indigenisation: Progress and Perils

India has been making progress with its self-reliance project or the Atmanirbhar Bharat (AB) initiative  that was launched in May 2020. This flagship undertaking has shown signs of incremental progress in the defence sector. Independent of AB, examples of successful defence indigenisation under the Defence Research and Development Organisation (DRDO) have largely been confined to missile technology. But by the end of 2022, the defence ministry disclosed that under AB’s Positive Indigenization List (PIL) a total of 3,700 items have been taken off the import list and sourced from the domestic industry. Apart from this critical change, defence indigenization has been extended to areas such as Innovations for Defence Excellence (idEX) which seeks to generate innovation in the aerospace and defence industry with the involvement of Micro, Small and Medium Enterprises (MSMEs), start-ups, Research and Development (R&D) institutes, individual entrepreneurs, and academia. The government has allocated almost 500 crores towards (idEX) for the period between 2021 and 2026. In addition, the government has launched the Supporting Pole-vaulting in R&D through Innovations for Defence Excellence (SPRINT), which requires development of very niche technologies in the space and naval domains. They are part of the Make-1 and Make-2 initiated under the Department for Defence Production (DDP) for idEX to encourage technology development though 75 challenges by enlisting the efforts of young technologists, start-ups and private companies in the space and naval domains to meet key requirements of the armed forces. For example, the Indian Navy (IN) has signed an agreement with Mumbai-based Sagar Defence Engineering for acquisition of armed autonomous boat swarms. Similarly, in the space arena, under the aegis of the principal scientific advisor to the Government of India’s Mission DefSpace has been launched to make India self-reliant in defence technologies linked to the space domain. Developments in niche technologies and more widely in establishing self-reliance in defence hardware, are promising but these will take time to achieve gains. Cumulatively, the latest data from the Stockholm International Peace Research Institute (SIPRI) also tends to confirm the government’s efforts to reduce New Delhi’s dependence on defence imports. SIPRI’s data reveals India’s arms imports declined 11 percent between 2013-2017 and 2018-2022, attributing it to complexities inherent in India’s procurement and acquisition process, diversification and native sourcing of defence items. Nevertheless, SIPRI still ranks India as the largest defence importer in the world, demonstrating why New Delhi has a considerable distance to cover before even a large proportion, never mind majority, of the defence needs of the Indian armed services are fully met.

Developments in niche technologies and more widely in establishing self-reliance in defence hardware, are promising but these will take time to achieve gains.

Thus, despite the gains accruing from the AB, India’s operational readiness cannot be compromised given the nature of the military threats the country faces from the Peoples Republic of China (PRC) and Pakistan. Defence imports will continue to constitute a sizeable share of India’s defence basket. Furthermore, challenges remain in meeting the qualitative requirements (QRs) of the Indian armed services, which are, by all counts, very stringent. Potential defence manufacturers only realise the demanding specifications following the issuance of a tender for a specific weapons system or military item rendering them incapable of meeting the QRs. Consequently, several acquisition efforts to source from indigenous vendors have been scuttled in the past. Therefore, the task before the government is in overcoming Indian native industry incapacities or limitations. This also requires a combination of governmental investments, regulatory standards, involvement of academic institutions and Indian Inc stepping up to meet the needs of the armed services. Alternatively, the services will have to drop or be compelled to dilute their own tough QRs on product quality and source from Indian vendors that could potentially have its own consequences in the of form of frequent equipment breakdowns and poor weapons systems performance. It would also compromise their operational readiness and generate inefficiencies that will drive up costs exerting greater stress on scarce budgetary resources. Thus, the long-term challenge for India is in ensuring deep and sustained investments in defence R&D and a defence industrial eco-system that can, if not comprehensively, but for most part, service the requirements of the Indian military. Finally, the establishment of economies of scale that brings about a surge in productivity and quality, while commensurately bringing down costs is a vital imperative for the security establishment and consolidation of a dynamic, efficient and adaptable Indian defence industry.

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This commentary originally appeared in Economic Times.

• Defence and Security
• Indian Defence
• India
• Atmanirbhar Bharat
• Defence
• DRDO
• iDEX
• India
• MSMEs
• SIPRI

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