A good step that was long overdue
India may have taken its first serious step at reform in the sensitive field of defence procurement with the government approving comprehensive changes to purchase procedures on Saturday which will seek to privilege domestic sourcing over imports.
The Defence Acquisition Council chaired by defence minister A.K. Antony cleared changes in the existing arrangements that would enable “rapid indigenisation of defence products, with both public and private sectors playing pivotal roles”. This gives India’s private sector virtually the first opportunity to involve itself in defence production. In earlier days, as a result of ideological underpinnings of the policy framework, private industry had to stay clear of defence. The best it could hope for was orders to make shoes or belts.
The change in the government’s approach is a fallout of the perception that overseas defence purchases are shot through with corruption, with strong hints of money changing hands in the Agusta-Westland VVIP helicopter deal being just the latest manifestation of this paradigm. Even when allegations against the country’s political leadership are not established and underhand transactions may only have involved civil or military bureaucrats, the charge of corrupt practices in defence purchases has had a destabilising, or at least an unsettling, effect on our political processes, given the deeply fractious nature of our polity. This became most evident in the Bofors affair.
With domestic industry — both public and private sector — in the lead in defence hardware, we hope the corruption angle will become a thing of the past. No less important, massive savings in foreign exchange should accrue over time. India now imports nearly two-thirds of its defence equipment. This is unique for a major nation, and is also unconscionable. Dependence on foreign suppliers in such a critical arena potentially gives them and their governments undue leverage in policy matters while dealing with India. Indigenisation will minimise this factor.
Earlier this month, at the behest of Western powers, the UN voted to put limits on international commerce in the field of defence. Under this agreement, in a clear move to favour importers who toe the political line of exporting countries, exporters alone can choose what countries or groups may buy defence material in the international market. India can get out of this trap if it is able to indigenise. Pre-existing contractual obligations for imports naturally have to be met before indigenisation can proceed in those areas. Even where imports are necessary, these must be undertaken not by the government but by private companies which, in turn, may sell to end-users such as the Army, Navy or the Air Force.
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