Introduction
An increasing convergence is being seen between the Services and the Ministry of Defence (MoD) towards the two concurrent goals of modernisation and indigenisation of the Indian Armed Forces. This is reflected in the simplification of policies and regulations for acquisition of technologies and platforms, according primacy to indigenous defence startups & MSMEs and fast tracking of existing procurement processes.
The recently concluded meeting of the Defence Acquisition Council (DAC) under the Chairmanship of the Raksha Mantri gave approval for acceptance of necessity (AoN) for capital acquisitions of close to Rs One Lakh Crores, one of the biggest in MoD’s recent history with special focus on indigenisation. Platforms such as new generation anti-tank mines with seismic sensors and remote deactivation, tactical control Air Defence Radars for the Army; active towed array sonar and medium range maritime reconnaissance and multi-mission aircraft for the Navy and; flight refueller aircraft for the Air Force were the main highlights of this DAC.
Focus on Indigenisation
Apart from these sophisticated platforms, the DAC also strengthened rules for expediting the acquisition of advanced technologies from Indian startups and MSMEs, especially those who qualify under the Innovations for Defence Excellence (iDEX) and Technology Development Fund (TDF) competitions. The amendments made to the Defence Acquisition Procedure (DAP) 2020, which has undergone multiple revisions to promote fast tracking of defence procurements and incentivise indigenous development of defence technologies since 2020, further simplify procedures related to payment schedule, procurement quantity and cost computation. This will help indigenous industries to scale and increase their competitiveness in the global market, again demonstrating the close link between national security and economic growth, each feeding into the other.
Over the years, the percentage of indigenisation component in platforms acquired through the capital acquisition route has constantly moved upwards on a steep gradient. This was a deliberate step taken to ensure that the stigma attached to India being one of the world’s largest arms importers is replaced with one that redesignated the country as a defence exporter as well as a net security provider in the region.
Many steps were taken under the current government to facilitate this transition. Arrangements such as joint ventures, transfer of technology, enabling of defence startups and MSMEs through iDEX& TDF and promulgation of back to back positive indigenisation lists started showing results and India, for the first time in its history, emerged as a major exporter of defence systems and sub-systems to significant number of nations, the last count being 85. One can only reminisce on the pride and exuberance felt when an agreement was reached between India and the Philippines for a $375 million deal to export the BrahMos supersonic cruise missile to the latter in 2022. The LCA Tejas is also being considered by at least three countries to form the mainstay of their respective air forces.
Emergency Powers
However, some of India’s neighbours that have revisionist powers ignore and actively disregard international norms of acceptable state behaviour. A delicate territorial understanding between India and China along the Line of Actual Control was broken unilaterally by the latter in May 2020 when soldiers of the People’s Liberation Army transgressed into Indian territory and clashed with Indian soldiers, resulting in deaths on both sides. As a result of the developments along our Northern borders, a massive counter-mobilisation was ordered to stop further Chinese incursions and all the three services quickly went into action.
Under these circumstances, duly aggravated with large supply chain disruptions due to ongoing Covid pandemic, to ensure that the country stands up to the regional bully and Indian forces are equipped with the best available products, a series of emergency powers (EPs) were allocated to the three Services These EPs, gave revenue procurement powers of up to Rs 500 crores (per case) to each of the three Services, through their respective Vice Chiefs. EPs focused on three broad areas i.e. spares, stores and limited niche capabilities. So far EPs have been allocated in four tranches, with the last expiring in June 2023.
Under the first three tranches, restrictions on importing equipment from abroad were lifted and items were procured from both indigenous sources and foreign vendors. In the last tranche of EP, from January to June 2023, procurement was allowed only from indigenous sources. The change in terms and conditions of the EPs also mirror the relative stabilisation of the situation along the LAC which has been termed ‘sensitive yet stable’. The termination of the EP, along with further easing of DAP 2020 also brings attention back to the twin process of indigenisation and modernisation of the forces.
Taking a deeper look, one can gauge that EPs had a threefold aim: meet urgent operational requirements, early insertion of equipment to address capability voids and cater for the sustenance of requirement of the Armed Forces. What the EPs ensured was that the procurement process was put on steroids for a short term and enhanced capability was achieved. This was under the understanding that the EP route was for emerging crises and situations warranting a concentrated and immediate response. After the EPs, the receipt of the equipment had to be within one year of signing the contract.
Some of the equipment contracted under the first three tranches of EP include ammunition of various calibres, radio sets, night sights for the Army; repair of platforms like KH-35E, Shtil, Barak and provision of spares for torpedoes and Sea Kings for the Navy and; repair and overhaul of aero engines for Su 30, MiG 29 and Mirage 2000s for the Air Force. The last tranche which featured only Indian manufacturers had the Army procuring equipment like ballistic helmets, quick reaction light and heavy vehicles, remotely piloted aerial vehicles and very short-range Air Defence systems; depth charges and repair of certain UAVs for the Navy.
Acknowledging that the provision of EP did not exist in the just released DAP 2020, the MoD inserted a clause of Fast-Track Procedure (FTP) for capital procurement cases, under which the services received autonomy over procurement of capital equipment up to Rs 300 Crores. There are some very valid caveats in the FTP procedure, given that it pertains to items that can be made available in the short term. So, obviously items with long lead times are automatically out of the purview of FTP, since they form part of the regular procurement route. The evolution of the FTP, extension of the EPs till June 2023 also reflects a matured and converging thought process within the MoD which couples increasing autonomy to the Services with the impetus to indigenisation and also reflects the growing capability of the Indian defence industry.
Also, one has to be very careful when attempting to routinise EP for a longer time horizon since there is a huge difference between EP and an established procurement cycle. While the former implies ensuring adequacy of spares, overhauls and niche yet limited capabilities and is focused more on plugging operational gaps, the latter has a more long-term horizon.
Conclusion
A quicker and efficient procurement cycle has to be mirrored in an increased technological absorptive capacity of the organisation. It is prudent to amend, modify and at place, adopt new doctrinal concepts, organisational structures and related tactics to absorb any new technology or platform fully in order to leverage them for maximum military effectiveness on the battlefield.
The sharpening of the DAP 2020 is a welcome step since it provides a scaffolding where processes and regulations regarding defence procurement and acquisition can be debated and modified based on a shared understanding. It is hoped that Indian defence procurement reaches a point where the concept of EP itself becomes redundant.
The emerging convergence between the Services and the MoD reflects the integrated approach of warfighting from a ‘Whole of Nation’ approach. With the synchronised efforts of the MoD, the integration amongst the three Services has resulted in better coordination to deal with every challenge together. Defence procurements are an integral part of such reforms and India is moving in the right direction to reduce its dependence on arms imports and become a net exporter, with defence exports expected to reach 50,000 Crores by 2028.
