Defence Secretary Sanjay Mitra said at the DefExpo on Thursday that the Strategic Partner (SP) policy was still at a preliminary stage and expecting orders even by next year would be a “little premature”. By all available indications, the orders will take even longer because there are fundamental flaws in the SP policy, in which the defence ministry plans to select Indian private sector firms to manufacture complex weapons platforms, including fighters, helicopters, submarines and tanks, in India. The SP will fabricate the platform based on technology transferred by a global “original equipment manufacturer” (OEM), which will be chosen in a simultaneous but separate process. To spread skills, the policy mandates that a firm can be nominated an SP to build only one class of weapons, and must indicate its preferences while applying.
The process designated to select an SP is long and arduous. To be nominated an SP, a private firm must pass a demanding financial capability gate, and also a searching examination of its technical capability and experience. However, private firms in India, even the most financially and technologically strong, simply do not have the experience needed to build sophisticated defence platforms like submarines and aircraft, which are “systems of systems” that involve multiple systems in various technology domains working in perfect harmony. For example, building a warship demands expertise not just in welding and fabricating hulls and superstructures, and in laying the plumbing and wiring that winds through a modern warship, it also requires expertise in propulsion and transmission systems, environment management, and in integrating these, along with the vessel’s weapons systems and sensors, into a battle platform.
It has taken defence public sector shipyards like Mazagon Dock and Garden Reach over half a century to reach the level they are at today, where they can design and build complex warships. Similarly, the public sector Hindustan Aeronautics, which is the only Indian company with experience of having designed and built fighter aircraft, has gone through a decades-long process of skills accumulation. They began by literally building warship- and aerospace-grade nuts and bolts and simple sub-systems, then graduated to more complex systems and eventually started putting together entire warships and aircraft.
In the laudable urge to quickly build private sector capability, the SP policy might be demanding from the aspiring companies a technological capability that it is unrealistic to expect from anyone. Many of the corporations, even with the best of intentions and handholding from foreign OEMs, will be hard-pressed to build a modern fighter or frigate. SP projects require at least a 40 per cent degree of indigenisation and, given the high cost of propulsion and weapon systems and sensors — all of which are currently imported — a large amount of fabrication work and final integration will be left to be done in India. An inexperienced Indian SP will simply not be able to manage its share of the work. The outcome will be an undesirable dependence on the foreign partner to take up the slack. Aspiring Indian defence manufacturers like the Tata group, L&T, or even smaller companies like Dynamatic Technologies, which started manufacturing relatively simple components and then graduated to building sub-systems and now systems, are on the right track. They will eventually — by building skills and accumulating experience — develop into credible systems integrators. But that process cannot be rushed beyond a point.