Originally Published 2014-02-25 08:34:59 Published on Feb 25, 2014
An all inclusive Defexpo would not only add greater character but also help the Indian companies explore the markets through a comparative framework and in turn enhance their manufacturing capabilities in the long term.
Defexpo 2014: Driver for India's defence industry
" The recently concluded Defexpo 2014 showcased land, naval and internal homeland security systems at Delhi's Pragati Maidan. Though an event of this magnitude should have ideally set the tenor for indigenisation of India's fledgling defence industry through the medium of collaboration and partnership, however early gaffs dampened the excitement. While the expo was inaugurated by Defence Minister A.K. Antony with pomp and show in the presence of the three service chiefs, a tacit admission that 92 percent of the capital budget had been spent - when as a matter of fact almost Rs 8000 crores were transferred from the capital account to the revenue account early this year -- partially dampened the spirits.

Despite the ministry blacklisting 27 domestic and overseas vendors and early signals from the top leadership indicating little chance of any orders fructifying in this financial year, the exhibition consisting of land and sea weapons systems appeared vibrant. The exhibits included extremely futuristic products represented by almost 600 Indian and foreign companies, with 12 country pavilions and almost 500 delegates from over 50 countries. The 8th Defexpo clearly stood out by exceptional representation from committed Indian private players in the weapons systems, sensors and also through initiatives like the Indian Gun Programme (IGP) which in the future is likely to set the tone and drive the design and development of Indian weapon systems to the next level.

India's military modernisation is now at a critical juncture and therefore the pace of modernisation can ill afford to get affected by either political or economic constraints and least of all get affected by policy paralysis or lack of decision making. However, the defence minister's statement that India's modernisation of the armed forces was not adversely affected by the government policies was a tacit admission of weak decision making.

While it is expected that every statement or remarks emanating from the defence minister would not only be closely followed but also diminutively dissected by commentators, I would humbly like to remind the minister that a modest increase of less than 10 percent in the defence outlay and even a more modest increase of less than 5 percent in the capital outlay announced in the interim budget is adversely affecting the pace of modernisation of India's armed forces. While there can be an interim budget due to political constraints but short term allocation of funds critically afflicts India's defence budgeting and hence modernisation. Moreover, in the prevailing geostrategic environment India cannot afford to slow down the pace of modernisation when our neighbour to the north is boisterously modernising its military.

The defence minister tom-tommed his ministry's ability to exhaust all its budgetary allocation - here too I would like to remind him that while the Budgetary Estimate (BE) of the Capital outlay in 2013-14 was Rs 86, 740 crores, the Revised Estimate (RE) in the same year was reduced to Rs 78, 872 crores.

The Standing Committee on Defence 2013-14, Demand for Grants, Twentieth Report and the Notes on Demand for Grants 2014-15, Ministry of Defence (Demand no 27) narrates the same story. While the Air force in 2013-14 had projected a demand for Rs 64,607.84 crores under this head, it was allotted Rs 39000 (60 % of projection) and the RE in the same year was less than Rs 38000 crores. The army too had demanded Rs 25,528 crores but was allotted less than Rs 18,000 crores. There has been a repeated shortfall in the capital budget for both the air force and the army, at a time when both services are trying to upgrade its fledgling arsenal. While the IAF is in dire need of more squadrons, the army too has to very quickly enhance its firepower.

Indigenisation of the Indian defence industry has to be a process which should be adequately backed by the government - but can indigenisation take place by allocating a mere Rs 5975.25 crore (less than $1 billion) for R&D and a paltry amount of Rs 35.71 crore in the Prototype Development under the Make Procedure at a time when large number of Indian private players are anxiously waiting to get included in the 'Make category'? To place things in the correct perspective, China very recently invested $ 50 billion for development of aero-engines - their current Achilles heel which they hope to reverse in less than a decade!

The Defexpo was beyond doubt a mega event which provided opportunities to a large number of Indian players to establish JVs and engage in future partnerships. A number of Indian companies were able to forge partnership with foreign players like Saab, DCNS, Elbit etc. And with MBDA assuring air superiority coupled IAF's plans to carry out major enhancement to its operational capabilities, the Defexpo is de facto becoming a platform for spearheading India's defence indigenisation programme. However, an all inclusive Defexpo would not only add greater character but also help the Indian companies explore the markets through a comparative framework and in turn enhance their manufacturing capabilities in the long term.

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Alok Kushwaha

Alok Kushwaha

Alok Kushwaha Student Tata Institute of Social Sciences (TISS)

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