Strategic Partnership Model : more bucks, less bang
Sub Title : We need to look at the entire issue de novo and take steps that would give an impetus to the Make in India programme
Issues Details : Vol 13 Issue 3 Jul/Aug 2019
Author : Lt Gen (Dr) N B Singh, PVSM, AVSM, VSM (Retd)
Page No. : 52
Category : Military Affairs
: July 31, 2019
The Strategic Partnership Model as conceived is unlikely to achieve the set objectives. Instead we need to look at the entire issue de novo and take steps that would give an impetus to the Make in India programme in the right direction, so that it helps us acquire requisite Defence Industrial Capability and in consequence strategic independence
The strategic partnership (SP) model announced on 31 May 2017, which is intended to be a major policy reform to reboot defence manufacturing may not rev up Make in India, contrary to the views of most experts who are ushering this process. Instead, it may end up as an exercise of sourcing military capability from overseas by the private sector, much like the assembly of weapon systems by the OFs/DPSUs. The Make in India programme needs to be viewed as a strategic step towards Defence Industrial capability building and long term Technology Security. A vibrant indigenous defence industrial base, where innovation and incubation of new ideas is the norm, will contribute to achieving a battle winning edge by giving technological overreach over the opponents. When acquiring any system developed abroad through any route, the likelihood of military capability failure at crucial times will always be high as nothing prevents the adversary from acquiring knowledge from overseas on means to neutralize deployment of such capabilities. For political/economic reasons, the overseas source may end up selling the same system to a host of other countries as happened with Sukhoi, Mi 17 and possibly the T-90. Besides, cost for life cycle system readiness would be exorbitant and revenue budget under perpetual stress if dependence on foreign industrial base remains. Since the whole process of selecting the SP would be based on field trials of the equipment conducted to short list the Indian companies, and selection of the SP based on lowest bid (L1), the process is sure to lead to huge time and cost overruns. In effect, this process in many ways is similar to the earlier process of selection of a system for manufacture by the OFB/DPSUs, which I have considered as the fatal golf swing approach. After the Rafale brouhaha, it will be increasingly difficult for Govt to identify SPs without the risk of litigation from competitors left out and political fallout. SP at sub system level may be a pragmatic and cost effective course in the prevailing circumstances, as it will genuinely create an ecosystem of engineering capabilities. At sub system level the focus will be on technology rather than the complete platform per se. Full systems can then be designed and developed using indigenous knowledge base and indigenous sub systems, in the manner in which the Navy`s ship building programme is evolving. The salient feature of this programme is that systems level knowledge leadership is provided by naval engineers, with inputs from experts (Indian/foreign) where needed and a fair participation by the local industry.
Here are seven steps that could propel India into the big league with respect to defence manufacturing :-
Put a Defence Industrial Strategy in place
Any major acquisition programme under the SP model, should not only provide an operational capability to the Armed Forces but also contribute significantly in creating a self sustaining defence industrial base (DIB) by plugging gaps in technological capabilities. In order to arrive at areas of technology where such partnerships are needed, it is important that a Defence Industrial Strategy (DIS) is put in place, clearly identifying areas where important industrial and technical capabilities are a must and need to be created within the country for national security and operational sovereignty, delineation of the workspaces of public and private sector and more importantly identifying areas where the two need to collaborate. SPs involving manufacture of complete systems like a tank, aircraft or marine systems may not fulfill our strategic defence industrial needs, besides being largely unaffordable over the life cycle. A pragmatic approach would be to initially allow the private sector to get into manufacture of open sub systems, leaving confidential systems to the public sector along with system integration and testing, opening up further once the tempo builds.
Collaboration and Consolidation of existing capabilities
Time has come for harnessing and consolidation of existing defence industrial capabilities in the public and private sector with the explicit aim of providing high quality weapon systems to the Armed forces. Design and development of any complex systems needs the support of a design house, system integrator, 5-10 system houses, 20-30 sub system houses and hundreds of component manufacturers, many of whom are already available within the country in terms of skills and competencies. What is needed is a consolidation of their capabilities in a mission mode. Despite the criticism heaped on DRDO, the fact remains that the capability for complete system design, development and integration is only available with them. Capability gaps may be there, consolidation of existing capabilities and its fine tuning through handholding by foreign design houses/experts is the need of the hour, e.g. German Aeronautical engineer Kurt W Tank was hired for the HF24 fighter programme and the country nearly developed the aircraft in the seventies. If mobility and running gear experts are needed for the Future Ready Combat Vehicle (FRCV), get them. What is the need to import a full system with TOT? Similarly, a host of sub systems manufacturers are available in the country for industrial grade engines, transmissions, controls, sighting, computing, etc. both in public and private sector. A SP between these entities and foreign sub system houses to create capabilities to design and manufacture mil standard next generation systems in India will be a strategic step forward. There are several foreign firms wanting to transfer such technology through JVs if some enduring clarity and certainty about the project exists. Such opportunities need to be seized, as the Chinese have been doing and what the Israelis did in the eighties to get the Merkava tank programme up and running. Acquiring of dual use technology through partnerships is also a viable option.
Focus on Elements of a DIB
A DIB comprises a web of industrial units , big and small, like prime contractor or systems integrator, partial system manufacturer, sub system manufacturer, unit and component manufacturer and design houses with capabilities for design, development, integration, testing, upgrade ,support and service of systems and components of aircraft, tanks, missiles, marine systems etc. These also have the ability to offer advanced system solutions based on the emerging needs of the armed forces. Some industrial units in the private sector have this capability today, however it is not being expanded due absence of clarity on futuristic projects. A network of industrial units in niche areas can be developed by entering into SPs for sub systems and advanced technologies between Indian public / private sector companies and foreign entities.
Strategic Partnership for sub systems and advanced technologies, NOT complete systems
It is important to remember that a tank, helicopter or a submarine derives its performance capability through a host of sub systems, working in unison. It is imperative to develop sub system houses within the country to provide a continuous supply of state of the art sub systems to enable a platform’s capability to be upgraded by technology insertion. If this approach had been adopted, the design and development of systems like the FICV, gun systems, missiles, aircraft, helicopters, etc would have been greatly facilitated. Currently, the capability to integrate complex systems like an aircraft, tank or a warship remains primarily with the public sector, these could become extinct if not incubated or consolidated around core workloads. This can happen if complete systems are indigenously designed and developed albeit with collaboration from foreign partners in specific areas where needed and with maximum use of indigenously available sub systems. SP should be pursued only for sub systems and advanced technologies that are not available in house with the aim plus of plugging technology gaps e.g. if a tank gun is needed with a capability to fire missiles in the FRCV, SP is needed in this specific area rather than the entire FRCV.
Capability building of SMEs to deliver high quality components/units
With deliberate hand holding and facilitation, SME sector can be transformed into world class suppliers of military grade components and replaceable units. There are already a no of these who are doing it for foreign OEMs and indigenous systems under manufacture. However, the ever present anxiety that another L1 can bag the next order is inhibiting innovation and development of next generation systems. A policy change in the procedures to permit repeat orders of a proven sub system/component will turbocharge the SMEs to become centres of excellence in operational innovation. In the initials years of the establishment of the DIB, Israel had guaranteed a ten year buy back to its industrial units besides providing full funding for crucial technology acquisitions. SPs need not be based solely on L1 but also on the extent and content of TOT i.e. willingness of the foreign partner to part with knowledge base of complex black boxes. The indigenization of the air compressors of T-72/BMP proceeded at glacial pace for three decades, due to the L1 policy constraint, resulting in a perennial dependence on imports.
Infrastructure for realistic testing and evaluation of prototypes
Testing is the only way to determine the validity of claims and promises made by designers and manufacturers. There are two types of tests in the life of a weapon system, developmental and operational tests. Development tests are controlled engineering oriented tests to ascertain if the weapon system meets technical requirements. Operational tests are intended to subject the system to operational tempos akin to actual combat to assess its combat effectiveness. They are distinct and exclusive and need to be conducted by different agencies. Infrastructure for test and evaluation is mostly available with the Govt, as are the duty cycles for evaluating system effectiveness. These facilities need upgradation and modernization. Ground rules to facilitate easy access to these by private players need to be framed for testing and evaluation, so that systems developed by private sector can be evaluated for performance and inadequacies addressed. Today this is one area where the industry finds itself rudderless due to lack of ownership of such technology development projects by the armed forces. With DRDO there are other constraining issues of IPRs etc.
Creation of a talent pool
In order to bridge technology gaps in breakthrough and generation next technologies, there is a need to work on creating a culture of innovation and creativity in our academic institutions. This is one way a continuous availability of next generation sub systems can be assured for technology insertion in systems that are graduating towards obsolescence and bridging the capability gap. For this, the need to create technology incubation centers at our institutions of higher learning is a way forward. These could be established in Government labs, IIT(s), NIT(s), and Indian Institutes of Information Technology region wise for various disciplines of technology like power systems, propulsion systems, C4ISR, AI, PGMs, computer vision, nanotechnologies, advanced materials, and spearheaded by a joint group of academicians and ex-armed forces engineers. The Israeli `talpiot’ system of nurturing R&D talent is an example worth emulating. Israel, which has faced enormous challenges to its security, adopted the human capital intensive growth strategy where a lot of focus was put on creating a knowledge & skill base in universities & Govt laboratories. This has created an exceptionally creative set of scientists & engineers for the high tech industry. Another practice which has helped Israel is the large no of conscripts who learn skills during their Army service & transfer it to civilian life upon release. Of course, a liberal export policy has been a great help.
I will end on the note that it is time acquisitions are also taken up as defence industrial capability development initiatives. The armed forces need to graduate from attribute centric procurement to capability centric acquisition- decide what is to be done operationally, compare it with what the system can do and then acquire it if it fits the bill. Merely acquiring a system because it has some fancy features like fire and forget which the adversary has or which the OEM is marketing, is an unaffordable waste of taxpayers’ money. A munition that is tracked till the terminal end has a higher probability of hit than an autonomous one, despite tall claims by the designers. In order to get the desired bang for the buck, the MoD can consider setting up of a Capability Evaluation Board (CEB) with the following charter:-
o Provide strategic direction for development of defence industrial capabilities over the next 10-15 years inconsonance with the capability requirements prioritized in the DIS.
o Vet the accuracy of the capability gap analysis carried out by service headquarters to establish the need for a new system before AON and that such a capability cannot be met through the more economical system upgrade route.
o Corroborate claims of service HQ that the proposed system to be acquired/developed will meet the operational requirement in the long term and identify subsystems with new technologies where full ToT is a must from the SP. Opinion of scientists and engineers working at the forefront of research in a specific field will help decide this issue rather than the user/OFs, whose sole aim could be to speed up deliveries. This is one reason why after several ToTs, DPSUs and OFs are not in a position to roll out an indigenous anti tank missile or combat vehicle.
o Identify gaps in technology security and measures to plug the same, by establishing a database of equipment capability surpluses, shortfalls and
o future development needs for high cost complex systems, so as to channelize the R&D efforts into these areas. No point spending Government funds in developing technologies which the private sector can provide. Funds need to be apportioned for Microsystems, tactical and strategic game changing technologies.
o Provide inputs to the MoD/Parliament on major defence acquisition programmes when required.
In the present form, the SP model may only result in shifting of the assembly line from public to private sector, without maturing of a DIB. The 21000 crore Make in India project to manufacture 111 choppers is expected to finally select one foreign helicopter out of four and one Indian firm out of those in the fray. The other six are left out without any recompense. As to what kind of DIB will get created after the assembly of 111 choppers with targeted 60% indigenization, what kind of strategic industrial capabilities will result is any body`s guess. The only outcome certain is that the fatal golf swing approach is sure to result in once again, our missing the fairways for the woods.