Editorial: Expand private sector role in defence production

Encouraging more private sector participation in defence production, especially in medium and high-tech segments, is key to driving indigenisation

One of the main criticisms against the DRDO (Defence Research and Development Organisation) is that its projects are inordinately delayed, so much so that they become redundant by the time they are ready for delivery to the Armed Forces. There have been occasions when the defence forces have flagged the issue of delays and were forced to take recourse to imports to meet their urgent needs. Missing deadlines have been the bane of the defence PSUs, with many projects being in a state of limbo for decades. Against this backdrop, it is heartening that the Centre has now decided to transfer technologies developed by the DRDO to eligible domestic industries. This is a major step towards indigenous production of conventional missile systems. It is aimed at closing the gap between developing advanced weapons and manufacturing them at the scale needed by the end user—defence forces. The development is expected to put the country on track to build a stronger and more self-reliant defence manufacturing base. Currently, India is far behind countries such as China and the United States in scaling up technologies, from the stage of ideation to induction. The best way forward is to encourage more private sector companies to participate in defence production, especially in the medium and high-tech segments to boost indigenisation in the sector. In the latest order, the Ministry of Defence has not specified which missile systems will be opened up for private production, even as reports have indicated that Akash, Astra and Nag could potentially benefit.

However, the broader objective is clear: DRDO-developed technologies must move efficiently from laboratories and testing ranges to factories capable of producing reliable systems in substantial numbers. Historically, India’s indigenisation drive has been largely dependent on the DRDO and the defence PSUs to deliver on the promise. Over the years, the budget for the DRDO has been around 6% of the Defence Budget, hardly enough to deliver on strategically important projects. The Armed Forces have often raised the issue of product quality. The DRDO’s problems range from inadequate manpower in critical areas to a lack of proper synergy with the Armed Forces. To compete with global defence R&D organisations, the DRDO needs much larger budgets, trained manpower, and more freedom in its operations. Given the prevalent institutional limitations in manpower induction and cutting-edge technology, defence budgetary allocations are bound to fall short for a nation the size of India. Innovative methods have to be found to augment resources. The import of high-tech platforms, equipment, and even ammunition shows that India still has a long way to go before it becomes self-reliant in critical defence technologies. The private sector is still not in a position to meet the needs of the Armed Forces largely because it has been deliberately kept out of defence production.

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