Indian Defence Industry: An Agenda for Making in India
About the Book
This book thoroughly probes the Indian Defence industry and the policies pertaining to it. Based on hard core evidence, it identifies the key shortcomings of this vital sector and provides a detailed roadmap for the Modi government’s ambitious ‘Make in India’ programme to succeed in defence production sector. Though written with a clear focus on influencing policy making, the book is presented in an accessible format to be easily understood by the wider strategic community.
About the Author
Dr Laxman Kumar Behera is Research Fellow at the Institute for Defence Studies and Analyses (IDSA), New Delhi. As a member of the IDSA’s Centre of Defence Economics and Industry, he specialises on issues related to arms procurement, offsets, defence industry, military spending, defence cooperation and arms export control. He was closely associated with two high-level Committees set up by the Ministry of Defence on Defence Acquisition and Defence Expenditure. He was a Consultant to the Task Force on Self-Reliance and Defence Modernisation, constituted by the National Security Council Secretariat (NSCS). In 2013, Dr Behera held the prestigious ICCR Chair, India Studies, at FundacaoGetulio Vargas (FGV), Rio de Janeiro, Brazil.
CONTENTS
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Preface
- Indian Defence Industry: The Journey to Make in India
Defence Industrialisation Phases
Can the Indian Defence Industry Make in India? - Ordnance Factories
Origin and Growth
Management
Employees, Production, Sales and Accounting
R&D and Technology Absorption
Execution of Orders
Pricing of OFB Products
Quality of Products
Exports
Capacity Utilisation and Impact of Modernisation
Poor Inventory Management
Outsourcing and Vendor Development
Corporatisation
Challenges from the Private Sector
Conclusion - Defence Public Sector Undertakings
An Overview
From Nomination to Competition
Defence Procurement: Share of DPSUs
Indirect Import
Vendor Development and Outsourcing
R&D and Technology Assimilation
Value Addition
Labour Productivity
Analysis of Profit Margin
Exports
Disinvestment and Listing on Stock Exchanges
Conclusion - The Private Sector
Why Private Sector in Defence Production
Defence Production: The Role and Scope of the Private Sector
Private Sector’s Contribution to Capital Acquisition
What has Hindered Private Sector’s Participation
Can the Make in India Initiative Save the Private Sector?
Conclusion - Defence Research and Development Organisation (DRDO)
DRDO: Origin and Growth
DRDO’s Performance: An Overview
DRDO’s Performance: A Critique
Defence R&D: The Problem Areas
Conclusion - Offsets
Evolution of Defence Offset Policy
Part I
Impact AnalysisPart II
Lessons from International Practices
Conclusion1 - Review of Policy Recommendations
Group of Ministers
Kelkar Committee
Sisodia Committee
Rama Rao Committee
V.K. Misra Committee
Dhirendra Singh Committee - An Agenda for Make in India
Set up a Make in India Council within MoD
Articulate an R&D and Manufacturing Plan
Appoint an Additional Secretary within the DDP for thePrivate Sector
Reform the OFs and DPSUs
Revitalise DRDO
Provide Conducive Financial and Procurement Framework tothe Private Sector
Streamline Defence Offset Policy
Curb Indirect Import
Involve the Industry in the Formulation of QualitativeRequirements (QRs)
Acknowledgements
List of Abbreviations
List of Tables
List of Figures
ANNEXURES
Annexure A – DPP-2016: An Overview173
Annexure B – Strategic Partnership: An Overview of the Aatre Task ForceReport183
Annexure C – Foreign Investment Proposals Approved in Defence Sector (As on July 2015)187
Annexure D – Details and Status of Major Ongoing Projects(Cost above Rs. 100 crore) of DRDO
Index
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