101 Out! Can Raksha Mantri’s 101 Item Import Embargo Transform India’s Defence Industry?

A broad rule of thumb in news rooms is that “news” announced on a Sunday is often suspect, aimed at garnering headlines on what is usually a slow news stream.Even so, it certainly took some gall for the Defence Minster Rajnath Singh to make a big pitch for Atma Nirbhar Bharat in a period when foreign acquisitions have been raining on India. Last month, Boeing completed the delivery of 22 Apache attack helicopters to India, the first five of 36 Rafale fighters arrived and New Delhi announced the procurement of 21 Mig 29 and 12 Sukhoi 30 MKI aircraft from Russia. In May, India had signed a $ 1 billion contract to equip the Indian Navy with 24 MH 60 R helicopters.The ministry of defence embargo on the import of 101 items in phases between 2020 and 2024 is strictly for public consumption. As former Finance Minister P Chidambaram put it, “ The only importer of defence equipment is the Defence Ministry… What the Defence Minister said in his historic Sunday announcement deserved only an Office Order from the Minister to his Secretaries!”Instead, a headline grabbing announcement has been made of banning products which were, in many cases, already being made in India.The ministry of defence embargo on the import of 101 items in phases between 2020 and 2024 is strictly for public consumption.It includes things we weren’t importing any way. Sufficient room has been left for yet another round of imports here.What the country needs first is a blueprint of an industrial policy which will deliver results, not by the next election but a decade plus from now. The DRDO should not be able to make unsubstantiated claims to block an acquisition, something it has repeatedly done in the last half century. Just how successful the process will be depends on the honesty with which the Ministry implements it.Money, Math and MysteryAs per the list there will be an near-immediate embargo on 70 products, another ten will be stretched out till 2021 before the embargo kicks in and finally the balance 21 will be targeted between 2022 and 2025. So clearly sufficient room has been left for yet another round of imports here.The ministry has conjured up fantastic figures like the Rs 4 lakh crore of contracts that the domestic industry would receive in the next six or seven years.This doesn’t even make for good arithmetic, considering that the current capital outlay budget is of the order of Rs 1.15 lakh crore, a significant portion of which is spent on importing weapons systems and components and sub-assemblies of systems allegedly made in India like the Sukhoi 30 MKI.No one can quarrel with the effort of the Ministry to develop an indigenous base. National security is one area where it is best to be self-sufficient to the extent possible. This has been a long-standing dream of the country. But we have fumbled so many times that there is need for caution and careful planning. The country needs to learn to walk before it can run.MoD Approves Procurement of 21 MiG-29, 12 Sukhoi Jets From RussiaWhere is the Industrial Policy?What the country needs first is a blueprint of an industrial policy which will deliver results, not by the next election but a decade plus from now. This policy, of necessity, must be directed by the government and have clear cut, and, more important, realistic targets. The LCA experience should by now have taught us that leap-frogging from assembling fighters to designing and making one is simply not possible.The policy must over the next decade create industrial clusters in certain identified areas. The government needs to fund re-innovation of foreign technology by setting up research institutions around key areas.The Ministry must apply the policy with ruthless integrity. The DRDO should not be able to make unsubstantiated claims to block an acquisition, something it has repeatedly done in the last half century. Likewise companies, especially Public Sector Units, should not be allowed to get away by making dubious claims. For example, the MOD, or HAL to be specific, claims that India is manufacturing the Sukhoi 30MKI from raw material at its plants in Nashik and Koraput. The reality is that it is more or less assembled here. The composite sheets, rubbers, and other proprietary material is imported in kits from Russia and some machining and cutting done in India before assembly. This process is even more true of the AL31FP turbofan engines that power the aircraft.Atmanirbhar Bharat Yet a Dream, No Strategy Devised: Rathin RoyA List of Banal Bans?The “auspicious” list of 101 items includes things we weren’t importing any way. Among these are wheeled armoured fighting vehicles (AFVs), naval corvettes, or Off Shore Patrol Vessels (OPVs) shallow water and water jet fast attack craft, which we have not only been making but exporting to countries like Mauritius, Sri Lanka. India has been designing and building its own OPVs since the 1980s if not earlier and designs its larger warships as well. So to claim we are embargoing them is to set up the proverbial straw man and then beat him !The same could be said of another “ban”—hull mounted and shipborne sonar systems. India has been using such systems of its own HUMSA-NG and USHUS design for quite some time now. This has been one of the few successes of the DRDO. Earlier versions were fitted in our older warships, and upgraded ones into the P17, P 15A and P 28 ships. The inclusion of dipping or towed sonars would have been significant, but we plan to import those systems.Another mystery in the embargo list is the ASTRA Beyond Visual Range Missile. This again is a completely Indian designed and made product. So what does it mean when we say it is on the embargo list ? Presumably its key components are still imported and so an indicative date of December 2023 has been given for the embargo to take effect.India’s Defence Machinery Has to Run on Imported ‘Engines’A lot of the list is clearly riding on the hope that indigenous efforts bear fruit in the coming years. The outside date for bans on long-range Land Attack Cruise Missile (LACM) is December 2025, that for small jet engines December 2024.Speaking of engines, that is where the real weakness lies. You can embargo everything, but the one thing you can’t do without is imported engines. You can change their name, as you have done for the Aridien 1H1 which is called Shakti and powers the Dhruv and the Advanced Light Helicopter, but you can’t change the fact that we are some way from being able to make our own engines. The unfortunate part is that there is no systematic and sustained efforts in developing them either.Indigenisation is a desired goal, but systematic planning to develop effective industrial eco-systems is another, a task that takes skill, persistence and a light and skilful bureaucratic touch. The Indian private sector is now ready to enter the threshold, provided they are not deliberately kept out as they have been in several areas for some time now. Companies like L&T, Kalyani Group and Tatas have stuck it out, but many have closed shop because of the MOD’s step-fatherly treatment towards them. Another area that requires attention is skilled manpower. India has seen one generation of submarine builders waste away in the 1990s. Hopefully this time around they will not be allowed to fade away.Just how successful the process will be depends on the honesty with which the Ministry implements it. The Ministry has done a good thing by drawing a line in the sand and declaring that certain products cannot be imported. This will encourage domestic industry to invest. But putting out a list alone won’t do the trick. There are many bureaucratic loopholes still around, that is why the Defence Procurement Policy keeps on getting revised with astonishing regularity.(The writer is a Distinguished Fellow Observer Research Foundation, New Delhi. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)

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101 Out! Can This Embargo Transform India’s Defence Industry?

Defence Ministry has done a good thing by declaring that certain products cannot be imported but it’s not enough.

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