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Super power in importing and back bitching own products
Proponents of an indigenous defence industrial base say fast-track imports are like a foot in the door and gradually expand into larger orders, diverting limited budgetary resources. The army is close to placing a second order of 72,000 battle rifles from US arms-maker SIG Sauer, after an identical purchase last year. Indian manufacturers who have invested in developing domestic capabilities to design and develop small arms are aghast. “FTPs strike the biggest blow to Indian industry.
When the armed forces go for foreign weapons, even small arms, you are effectively telling the world that your indigenous capacity is worthless. When we try and export, the first question we are asked is ‘why isn’t your own army buying your products’,” says the CEO of a private sector firm.
The Defence Research and Development Organisation (DRDO) is worried that an order for a regiment (45 vehicles) of Russian 2SDS ‘Sprut’ light tanks for use in high-altitude terrains like Ladakh will kill its own under-the-wraps light tank project. The infantry wants more Israeli-built ‘Spike’ anti-tank guided missiles (ATGMs) even as the DRDO is readying an indigenous man portable anti-tank guided missile (MPATGM) for the army.
A bulk of the current fast-track buys are for ammunition. The shortfalls, army officials say, have been caused by the Ordnance Factory Board (OFB), whose 41 factories have failed to keep the supply lines running. The OFB is part of the defence ministry’s Department of Defence Production.
A series of Comptroller and Auditor General (CAG) reports have highlighted deficiencies in OFB-produced ammunition. A 2015 CAG report noted that 74 per cent of 170 types of ammunition failed to meet the ‘minimum acceptable risk level’ and only 10 per cent met the ‘war wastage reserve’ requirements. Another CAG audit for 2017-18 presented in Parliament in December 2019 said that the ordnance factories ‘had achieved production targets for only 49 per cent of the items’. A significant quantity of the army’s demand for principal ammunition items remained outstanding as on March 31, 2018, adversely impacting its operational preparedness, said the report. OFB exports, the report said, decreased by 39 per cent in 2017-18 over 2016-17. On May 16 this year, finance minister Nirmala Sitharaman announced that the government was corporatising the OFB to improve ‘autonomy, accountability and efficiency in ordnance supplies’. Corporatisation, though, could take several years to bear fruit. Attempts at private sector ammunition production have not taken off either, though not for want of capacity, capability or investments.
In June, the army’s Master General of Ordnance Branch inexplicably pulled the plug on a 2016 plan to procure ammunition from the private sector. A brainchild of then defence minister Manohar Parrikar, the plan had aimed to bring the private sector into what was until then a government monopoly. It studied the 2016 experience where ammunition deficiencies led to fast-track buys. The goal was not only import substitution but also to create a vast domestic ammunition manufacturing capacity that the armed forces could tap into in an emergency. Deliveries would commence from six months of signing of the contract and spread over 10 years.
Fifteen private sector firms had planned to bid for eight procurement contracts for specialised tank, anti-aircraft and infantry ammunition for the army’s vast Russian-origin arsenal of battle tanks, anti-aircraft guns, multiple grenade launchers and 155 mm artillery guns (see A Lost Opportunity). Some of the private players had even established plants and scouted for international partners, anticipating orders. Five requests for proposal (RFPs) for ammunition were withdrawn while no decision has been taken on proposals for BMCS (Bi Modular Charge System) and fuses. With the collapse of long-term capability building plans, short-term weapons acquisitions will continue to remain more attractive.
