India needs an arms manufacturing sector

The light combat aircraft (LCA) Tejas, developed by Hindustan Aeronautics Limited (HAL), received its initial operational clearance certificate. This means the aircraft is now considered worthy of induction into the Indian air force, and a few aircraft will be inducted by June and more by the end of the year. The Indian navy, too, is expected to purchase few of the aircraft.

This initial success of Tejas can give us a reason to smile, but not to jump with joy. The IAF and the navy have both said they intend to carry out some more tests and it remains doubtful if the Tejas will actually fulfil the role it was built for: to replace the ageing MiGs.
A reality check reveals some sobering facts. For instance, the LCA has been in the making for some 27 years. The initial budget was Rs560 crore; this spiralled to over Rs15,000 crore. Moreover, 40% of the components are imported, including the all-important engine. The Indian engine, named Kaveri, was a failure.

Ironically, even as India struggles to make the Tejas a state-of-the-art fighter aircraft, few would have missed the fact that just a few days ago, China unveiled its futuristic stealth bomber. India’s defence production is still in its infancy. We need a paradigm shift if we are to make defence equipment comparable to the best in the world.

Also, truth be told, India doesn’t have a choice: our defence import bill for 2012 is expected to touch $30 billion, according to Assocham. There is no reason why some of that huge amount cannot be spent on Indian firms making defence equipment. The development of a viable and vibrant defense production sector will have tremendous spin-off, especially in terms of innovative technology, for the economy. This is evident from the examples of the US and former Soviet Union. Defence technology need not always be geared towards fighting destructive wars.

While what exactly needs to be done to create a viable defence production sector requires much debate and planning, two aspects are clear: our public enterprises need to be set definite time-lines, made accountable, and given proper budgets (did India really believe we could make a fighter aircraft from scratch for just Rs560 crore?). Second, the private sector has to be involved. Competition between different firms might just be the trigger to make the defense manufacturing sector more productive and cost effective. It is time to think of defense as a key sector, which is capable of boosting the general economy.