Military-industrial Complex: crafting a winning strategy


Senior Member
Oct 5, 2009
Military-industrial Complex: crafting a winning strategy

Surrounded with security threats to its land frontiers since Independence and bedeviled with a paucity of funds, Indian defence industries for many decades plodded along alone striving for self-sufficiency as the western countries were loathe to part with the latest equipment or share their technology. The silver lining in this bleak situation turned out to be Soviet Union, which did not consider India strategically hostile and was willing to accept payments in rupees. However, in the unfolding geopolitical scenario, besides Russia, countries like France, Israel, Britain, and America, each with well-established military-industrial complexes are keen to join hands with India to co-develop, co-produce and co-market defence equipment.

This change of political climate in favour of India has occurred primarily on three counts. First, despite sanctions and technology denial regimes, India has emerged fairly unscathed and stronger due to the genius and technical skills of its people. Both economically and militarily, making it an alternate geoeconomic hub in Asia vis-a-vis China. Second, fear of a rising China that intends replacing American influence in Asia-Pacific and the pre-dominance of Islamic fundamentalism prevalent in most of the Asian countries has placed severe restrictions on selling of armaments to these countries by the West. India being a secular and democratic society, offers an attractive alternate market. Third, all four plus generation weapon platforms require IT engineering solutions in which India leads. Today, India is both a cost-effective hub for R&D investments and also boasts of the capability to absorb fair quantities of new generation weapon systems produced, due to the rapid modernisation of its defence forces that is underway. To optimise monetary benefits as well as leverage the politically conducive environment, New Delhi needs to craft a holistic strategy instead of clinging to a piecemeal approach.

First, the Defence Research and Development Organisation (DRDO) and other agencies must resist the temptation to reinvent the wheel. Instead of frittering their resources on systems that can be bought off the shelf or through transfer of technology (TOT), they should focus on mastering critical technologies that other countries will not share with us. Low-tech items like binoculars, or 9 mm carbines, crucial for success in close combat can simply be imported along with a license to produce them locally in the private sector. Yet, the Indian Army still awaits an ordinary item like a carbine! Similarly, instead of spending a fortune on research on the MBT Arjun, which the end-user is still wary of inducting, we could have easily evolved Mark-II and III versions of the world class T -72 tank series. Preferably DRDO and our scientists should, therefore, concentrate their energies in developing nuclear powered submarines or re-jig the PSLV/GSLV technology to produce ICBMs as these form part of technology denial regimes. Nuclear powered submarines for completion of the nuclear triad and ICBMs are a necessity for an emerging global player, since the power of a country influences only as far as the reach of its sword!

Second, to sharpen the competition in wide-ranging research on future weapons, New Delhi should encourage and fund, both the government agency as well as a private sector company. The final selection of the weapon can be made by the end user but without the loser suffering a financial loss. This will ensure serious commitments in R&D, development of a superior weapon system, giving larger profitability and encouraging the private sector to become a significant part of the Indian military-industrial complex. Such inducement to the private sector in defence production is the key to development of a world-class infrastructure. To further familiarise and enable private sector entry, the Army, Navy and the Air Force should maximise outsourcing of maintenance and repairs of equipment to private vendors, thereby spurring their participation.

Third, no single vendor or country has the resources to invest individually to attain self-sufficiency in creating weapon platforms of the next generation. The future well being of nations will depend on their integrating their armament industries effectively between countries with shared perceptions of their national interests by creating joint ventures. This will bring diverse skills together to enhance the capabilities of the product, reduce the costs by sharing investments in R&D and achieve profits by jointly marketing to other friendly nations. Brahmos, the supersonic cruise missile produced jointly between New Delhi and Moscow is a case in point and an unprecedented success story.

A US Air Force General recently commented that F-15 Eagle fighters had lost 90 per cent of all simulated dogfights to Indian pilots flying Su-30MKI in the skies over Alaska causing quite a stir. The Su-30MKI, a four plus generation aircraft, owe their existence to the parameters set by the Indian military, creating a brand new fighter aircraft by harnessing Russian genius with skills of India, France and Israel. This joint approach and the experience gained with Su-30MKIs can be applied to MiGs too — a time tested machine. Therefore, it is worthwhile to examine the possibilities of investing twenty per cent into shares of MiG Corporation by HAL since we need a replacement for ageing aircraft in the Indian Air Force. Similar replication of projects with other partners in Israel, France and Britain can cut costs and create reverse dependencies, thereby creating mutual economic stakes that can be politically leveraged. However, while working out joint ventures, one should be careful that it is dependent on 'sunrise technologies' that we require and not on transfer of 'sunset technologies'.

Last but not the least, with fiscal restraints becoming greater in future, Indian military industries to prosper must go into an overdrive to export their hardware. A modest beginning in exports worth 1.4 billion dollars was achieved. A vast market exists for exports in West, East and Central Asia besides Mrica. It is imperative that New Delhi set up a central mechanism, in consultation with both public and private sector partners. Besides recovering the R&D costs which can be recycled to create next generation weapons, this would help extend India's geopolitical reach.

Military-technical cooperation has emerged as an integral part of international cooperation. It takes into account the political, economic and military interests of states and enables a push for exports to raise additional funds in order to improve the scientific and industrial infrastructure of the domestic defence industry. Therefore, this is the route the Indian military-industrial complex should devise to emerge as a global player by the end of this decade.

By Bharat Verma

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