Defence Orders to Boost Local Capacity

The government has cleared an order for 83 light combat aircraft (LCA) on Hindustan Aeronautics Ltd (HAL). The order is worth nearly ₹48,000 crore. The indigenous content is supposed to be 50% at the beginning and is supposed to go up to 60% by the time all the aircraft are delivered. Defence production is a way to encourage advanced manufacturing in the country. The present order is, in this respect, a boost for self-reliant (atmanirbhar) production.

If only things were that simple. How much of the total value that is added to produce the LCA Tejas Mk1A is accomplished in India is anybody’s guess. It is an old public sector trick to count as local production anything that is purchased from an Indian company, regardless of the import content of that purchase.

Suppose an Indian company buys sophisticated electronic sub-assemblies from Israel, France or the US and puts them together to supply HAL with an assembly that purports to be made in India for the Tejas fighter, what is the real gain for domestic industry? The point is not to create an autarkic defence sector. India must procure from the rest of the world what is best and most cost-effective for its defence equipment.

But there must be clarity on the extent of foreign content in the so-called indigenous output, so that improvement on this score can be achieved and measured. India still has the largest national contingent of young people of college-going age and, even after taking into account the damage done to their potential by terrible schooling, has the largest potential pool of engineers, scientists, designers and dreamers who can produce breakthrough technologies and convert them into useful products. Provided this capacity is marshalled.

That is why India needs to step up efforts on the lines of America’s Darpa — Defense Advanced Research Projects Agency, which funds moonshot projects — and nourish a startup ecosystem that innovates, drawing upon the best of R&D from around the world. The LCA order just scratches the surface. The point is to dig deep and rake it in.

Leave a Comment