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Stuck in the self-reliance mantra


RESEARCH INTERTIA: Defence self-reliance in India remains a mirage because the government is reluctant to privatise military R&D. Defence minister A K Antony seen here with Air Chief Marshal N A K Browne

To develop good defence technologies we need to interact more with the outside world, not less.

India's quest for a sophisticated militaryindustrial complex was supposed to save money, bring greater freedom of action in foreign policy, and trigger civilian spin-offs that fueled national development. The government shouldered this responsibility with extensive investments in military research, development and weapons production facilities, but these efforts failed to produce breakthroughs in security policy or technology development. India remains dependent on foreign suppliers for its arsenal, its armed forces are wary of equipment made by the country's state-owned factories, and Indian military R&D has produced one armament of strategic consequence: nuclear weapons. To make things worse, India's defence marketplace is rife with corruption. 

Reforms have proved to be hard despite acknowledgments of their necessity. In 2005, the Vijay Kelkar Committee advised broad privatisation of the defence industry. New rules opened up the industry to domestic private investment, but eight years later, private participation remains limited. Indian firms are keen to participate, but the government has not been willing to consider them as suppliers of major systems because they have no record of weapons production.

In 2008, the Rama Rao Committee proposed an overhaul of the Defence Research and Development Organisation (DRDO) to focus on a handful of key technologies. This was followed by a series of newspaper reports that exposed the DRDO's main failings. But rather than initiate dramatic new policies, defence minister A K Antony defended the agency arguing that the DRDO faced "genuine difficulties, like technical complexities, technological embargo/sanctions, non-availability of infrastructure within the country, extended and long lasting user trials, revision of systems specification during development phase, " oblivious to the fact that as defense minister he was the official responsible for at least two of the problems.

The persistence and the pattern of the dysfunction in the Indian defence marketplace suggest that the failures are more deep-rooted than even these committees recognised. The committees, for example, recognised the impact of globalisation on the Indian defence industry, but were unable to breakout of the self-reliance mantra.

Defence self-reliance in India remains a mirage, but the slogan remains unshakeable even when India needs to be more, not less, integrated with the rest of the world. Success in developing new technologies comes from increased interaction with the outside world. For nearly a decade now, leading weapons-makers from around the world have lined up in Delhi to supply weapons systems. It is notable that they are not going to China. India's path to becoming a great power depends on the country developing a web of economic, scientific, cultural, and political ties with other great powers who are more likely to accommodate the rise of a well-integrated new power than one that is isolationist.

The pursuit of self-reliance was accompanied by yet another major cause of inefficiency, the state-run monopoly in the defence industry. Indian leaders believed state intervention was necessary because private industry was incapable of and unwilling to invest the capital necessary to build a robust defence industry and defence required secrecy that only the state could provide.

The greatest damage was done by the government monopoly on R&D. The formation of the DRDO and its resulting controls imposed on military research and development have been stultifying. The only breakthrough strategic weapon produced in India, the nuclear bomb, was the product of the nuclear scientists in the Atomic Energy Commission.

By definition, research is uncertain;the vast majority of projects fail. Societies find different ways to absorb the cost of risk. In the high-tech world, venture capital fills the gap, but governments generally have been the biggest funders.

In the US, the government pays for the majority of R&D expenditure, but does not conduct the majority of the R&D activity. Most military R&D occurs in the private sector;most basic research occurs in universities. The government pays for research through grants governed by contracts. This contracting process is central to the success of the US research system. It enables government agencies and non-government researchers to enter into an agreement to generate a highly unusual and highly uncertain outcome in the form of some breakthrough technology. Consequently, the contracting process has to be robust enough not only to allow funding to proceed, but also to make sure that there is minimal abuse.

The Indian government's hesitation to privatise military R&D stems from the absence of this contracting infrastructure. Officials do not trust private businesses to deliver on the contract terms. The Indian state executes thousands of general supply contracts of course, but these are so mired in corruption that it has sustained distrust in the ability of the courts to enforce contract terms and exact restitution.

The roots of the problems of the defence industry reach far beyond the sector itself. Given the deeply held ideological views and wider institutional failures underpinning these failures, it is not surprising that India's de facto policy has been to import rather than to build. For defence indigenisation to succeed, this time on the back of privatisation, the government must first commit to mitigating the underlying problems. 

The writer is a nonresident senior fellow at Brookings and teaches at the University of Maryland, Baltimore County.

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