The new defence acquisitions policy cleared by the defence ministry on Saturday, with Cabinet approval expected to follow shortly, lays the ground for major multinational companies making fighter jets, helicopters, submarines and armoured vehicles (tanks and infantry combat vehicles) within the country, mainly in partnership with Indian private companies. The defence public sector — comprising DRDO and its 50 labs, five defence PSUs, four shipyards and 41 factories under the ordnance factory board — which has held the fort since the early days after Independence — has got the boot for all practical purposes. It will now have to compete with private firms to enter into strategic partnerships, or long-term business and financial arrangements on the strength of viability and staying power, with foreign companies.
There was a time when the very notion of private firms entering the military field was looked on with suspicion, and it was deemed a great concession when they were permitted to make shoes and belts. Now it appears the Narendra Modi government is on the verge of handing over the defence sector exclusively to private industry. The defence public sector has much to answer for, although it scored hits in some areas — aerospace, for one. Its frequently-noticed lack of direction, inefficiency and occasional corruption were principally traceable to governmental policies and governmental sloth and were comparable to public enterprises in the civilian domain. Even so, it has a consolidated knowledge base. For now it remains unclear how the government proposes to dip into it for the maximum national gain.
The private sector, on the other hand, will enter a new domain. Its competence and capabilities for defence production are untested. In the event, it must demonstrate that it can efficiently absorb the technologies that foreign multinationals land on Indian shores. This takes time. The implication is that off-the-shelf purchases of major defence hardware under direct government-to-government deals could continue in the foreseeable future, as seen in the case of intermediate-range fighter aircraft purchased from France and light howitzer guns from the US, although there is a palpable directional shift to edge out the defence public sector and move toward private and foreign companies in the expectation that this would lead to defence autonomy and self-reliance — a questionable proposition. There is evidently an ideological basis to the fundamental changes envisaged.
In the light of shifting gears in defence procurements, it is reasonable to expect much stronger ties than earlier in the field of foreign policy with Washington and its Nato allies, letting the traditional idea of strategic autonomy in world affairs wither away.
