NURTURING INNOVATIONS IN THE ARMED FORCES

Syndicate:

1. Background. One of the first aims of India as a nation since Independence has been

to achieve self - reliance in the field of defence and defence production. India’s military

expenditure has risen significantly over the past few decades. It grew by 259 per cent over the

30-year period 1990 and 2019 and by 37 per cent over the decade 2010–19.[1] India has the

third largest military in the world and is the sixth biggest defence spender. India’s tensions

and rivalry with both its adversaries are among the major drivers for its increased military

spending. In addition, India’s military spending has also grown due to an expanding salary

and pension bill of its armed forces personnel and capital expenditure for procuring warships,

submarines, aircraft and helicopters.

2. Why innovation is required? India is one of the largest importers of conventional

defence equipment and spends around 30% of its total defense budget on capital acquisitions.

60% of defence related requirements are currently met through imports. [2]
The share of

capital expenditure in India’s defence budget (inclusive of pensions) saw a sharp, decline by

almost eight percentage to below 24% over the decade to FY19. This, despite a persistent

state of tension with Pakistan and a Chinese threat. Hence, there exists a need to create an

ecosystem to encourage innovation and technological development within the country to

reduce the burden of defence expenditure. Indigenisation in the past as well, has effected a

substantial reduction in cost of the systems due to India’s labour arbitrage, good facilities and

fairly well-trained labour force.

[1]
https://theprint.in/defence/india-china-among-top-3-spenders-on-military-in-2019-sipri-study/

409655/
[2]
https://www.makeinindia.com/article/-/v/defence-manufacturing-sector-achievement-report

3. Challenges. The challenges faced in nurturing innovation and technological

developments are enumerated in the below paragraphs: -

(a) FDI Policy. The OEMs for setting up business in India in partnership with

public/private players want to have a major say in the management of manufacturing.

At present, FDI in defence industry is limited to only 49 percent as compared to other

major countries such China and South Korea. Also, the Government decides the

Indian partner for the joint venture and the OEM does stand to decide its partner. This

acts as a major deterrent in FDI in this sector.

(b) R&D. Inadequate investment in R&D in last budget shows our lack of

seriousness in the area of Research and Development. The allocation to DRDO

remains modest – around six per cent of defence expenditure though successive

parliamentary committees have recommended a minimum allocation of ten per cent.

Private sector giants such as the Tata, L&T and Mahindra and Mahindra invest less

than one per cent of their turnover in R&D unlike in countries such as France where

corporate organisations invest more than ten per cent in R&D. It would also be

interesting to note that the overall allocation to R&D is significantly lower (0.85 per

cent) in India compared to advanced countries which spend in the range of 2.2 per

cent to 3.5 per cent. [3]

[3]
http://www.indiandefencereview.com/news/make-in-india-challenges-before-defence-manufacturing/
major deficiency in terms of capability is in the areas of propulsion, weapons and sensors.

Some of the critical technologies where progress made by the DRDO has been abysmally

poor are Focal Plane Array (FPA), Active Electronically Scanned Array (AESA) Radar and

Stealth Technology. India is presently engaged in the design and production collaboration

with Russia for a Fifth Generation Fighter Aircraft (FGFA), that will have stealth features.