India’s Renewed Push For Indigenisation In Defence Sector: Opportunities And Challenges

It is a well-established fact that any country in the world needs to be self-reliant for domestic defence needs so as to preserve its territorial integrity unless it has the luxury of supporting a North Atlantic Treaty Organisation (NATO)-like organisation. India does not have this luxury; besides, it is surrounded by near-permanent adversaries like China and Pakistan, and to top it all, these two adversaries are ‘all-weather’ friends and have colluded with each other against India.

India was making steady progress in all fields including the defence sector. It had a close ally in the form of Russia. Good economic relations with China and continued peace and tranquillity along the Line of Actual Control (LAC) had given India the requisite time and space to undertake capability building as it did not see any immediate threat from China and had an assured warlike store supplier in the form of Russia. It was also building connections with the USA in a deliberate manner.

But then, all of a sudden, everything changed. China transgressed at multiple points along the LAC in Eastern Ladakh in April–May 2020. All bilateral agreements were junked, which also resulted in a bloody clash in Galwan, wherein we suffered considerable losses. The subsequent efforts at political, diplomatic, and military levels have not been able to resolve all the transgressions to date, with major transgressions still remaining at Depsang and Demchok. Other resolved transgressions are also “disadvantages for India” due to the creation of buffer zones.

It was during this time that India realised the urgent need to become self-reliant in the defence domain by means of indigenisation. Multiple measures were initiated by the defence forces, Defence Public Sector Undertakings (DPSUs), Defence Research and Development Organisation (DRDO), private sector, and Ministry of Defence (MOD). It was realised that unless a ban is placed on defence imports, alternatives will not emerge in the domestic market, but it was also true that a blanket ban on defence imports will be counterproductive to the country’s operational preparedness.

A systematic approach was thereafter followed, wherein the MOD issued the first import ban list, including certain items that were restricted for imports. The list was prepared with the assistance of all stakeholders. It was on 21 December 2021 that this first list was issued, setting the agenda for indigenisation. As time progressed, these lists were renamed ‘Positive Indigenisation Lists’, giving positive orientation to this national effort.

The geo-political situation was fast changing with increased interaction between Russia and China, so much so that the Russian president attended the Winter Olympics in China on 22 February 2022, announcing ‘no limit’ friendship between the two nations. The Russians probably accommodated the Chinese wish to continue with the Winter Olympics successfully before launching the special operations against Ukraine in the last week of 22 February 2022, though their forces had surrounded Ukraine from three directions in the garb of military exercises. An unprecedented situation emerged in front of India, wherein its most trusted friend, Russia, and its most adversarial nation, China, were on the same side. India started analysing this geopolitical development and started a more focused approach towards indigenisation, due to which two lists were released in the year 2022.

By the end of 2022, Russia’s invincibility was shattered due to a tough fight being given by Ukraine with the support of NATO countries, which resulted in the depletion of warlike equipment and warlike stores for the Russian defence forces. Russia was constrained to meet its own domestic requirements, leaving aside the needs of other countries, including India, where it had supplied the defence equipment. Such a situation put an urgent indigenisation focus on India, which embraced this challenge by issuing fourth and fifth positive indigenisation lists. The fifth positive indigenisation list was issued by the Raksha Mantri on 4 October 2023 during a Naval seminar in New Delhi recently.

The ban on the import of the items included in these lists is not immediate, but a well-thought-out timeline has been given wherein the Indian industry will be able to produce these ex-import items or their better replacements. In fact, the fifth list has 98 items, taking the earlier total of 411 items to 509 items, systems, and subsystems. The list not only includes the future arsenal but also looks at the induction of disruptive technological advancements as well. The renewed focus, on the one hand, puts requisite pressure on all the stakeholders to indigenise the defence equipment to meet the requirements of the country, but on the other hand, it also aims at meeting the requirements of other foreign-friendly countries. Indigenisation is key to meeting the requirements of the defence forces. This twin focus is a great opportunity for the country.

The production of modern defence equipment takes considerable time. Excluding the imports, there are three means to achieve the targets. First is own R&D, which is most reliable but will take an operationally unacceptable timeframe; second is technology transfer from Original Equipment Manufacturers (OEMs), which is faster as compared to own R&D but has its own inherent challenges. The best option is joint ventures with the OEMs, with the mandatory provision of technology transfer and the mandatory incorporation of Indian domestic manufacturers.

The focused effort on indigenisation is good, but the geo-political situation is fast changing, including the Taiwan crisis and other conflicts the world over. India cannot remain unaffected by such developments. Chinese have the potential to carry out misadventures on the LAC with India in a larger spectrum as compared to current transgressions. If Russia showed its commitment towards China in such a conflict, we would have turned our opportunities into ‘pitfalls’. It is therefore essential that politico-diplomatic efforts provide at least a decade’s time for the country before major indigenisation of the Indian defence forces takes shape.