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Is defence R&D in the country at a crossroads?
The Indian defence industry is in transition. It has tremendous potential to move ahead but must also be ready to absorb some level of risk, to upgrade its competitiveness. There are many new opportunities, since the acquisition process has become more proactive.
DRDO is working with industry and will provide support wherever required as a technology partner.
Is industry being too cautious in wanting more guarantees?
We should not get into a Catch 22 situation, which would happen if the MoD demands industrial capability before placing an order, while industry demands orders before putting money into developing capabilities. Secondly, if the "Make (Indian)" category of procurement is to survive, we should work towards global competitiveness and a defence industry that exports. Otherwise, domestic industry will never be competitive in cost.
Would that mean loosening export control regulations?
Exports would be fine, provided we first meet our own military's requirements. But a large, assured market is essential for economically viable development programmes. Take the Tejas fighter - the Indian market may be for just 100-200 aircraft but the global market could buy another 500 aircraft. There is demand for this class of aircraft and not many competitors. If we build the Tejas in large numbers it can be globally competitive. A competitive defence industry must export for volumes. This will require policies, a well-crafted methodology, and MoD support.
Should there be greater funding for the DRDO?
China spends 15 per cent of its officially declared defence budget on R&D, as do other countries. We spend just 5.5 per cent, including on salaries, capital expenditure, and on strategic systems. We don't have any hidden budgets. It is imperative we spend more on defence R&D if we want to become self-reliant. Not just DRDO; a larger R&D budget can be shared with industry too.
But we are yet to develop an expenditure model where the government is ready to fund a private industry project, regardless of success or failure. For that the system needs to mature. Also, we need to identify four or five key thrust areas for R&D. One such area is the Advanced Medium Combat Aircraft, with unmanned systems developed in parallel. Another is artillery, where we need to develop our own gun design. We are developing that with a new partnership model: an Ordnance Factory-industry-DRDO partnership.
Tell us more about this.
Industry is developing the capability to manufacture a barrel. The DRDO's Armament R&D Establishment (ARDE) is designing electromechanical systems, better recoil capabilities, and a totally automated gun with higher rates of fire. We have set a timeline - the prototypes will be ready within three years.
Bharat Forge is developing its own gun too, alongside with partnering the DRDO project.
The DRDO has no problem with that; if industry does anything on its own, or even with foreign technology input, we are happy. Seven thousand DRDO scientists cannot handle defence R&D for the entire country. But we do not want industry initiatives to get into indirect import, with only minor assembly done in India. In so-called Transfer of Technology (ToT) manufacture earlier, 80 per cent of the inputs were coming from abroad. Manufacturing must enhance indigenous capability; industry must be able to upgrade products that it builds. Only then can one call it an Indian product.
Tejas, guns, missiles. What else is DRDO working on?
The future of DRDO will be defined by three to four R&D areas: First, unmanned warfare, on ground and in air. Robotic soldiers and unmanned aircraft will require us to develop a host of technologies. Second, we need to end ammunition import by creating indigenous manufacturing processes and upgrades. Third, we need state-of-the-art missiles with far greater ranges than at present, which we can launch from multiple platforms. One hundred km was considered a good standoff range, but now we need to hit aircraft and ships at longer distance. We need dynamic design processes to keep pace.
What developments can we expect in the DPP?
The DPP will constantly evolve. There will be more emphasis and clarity on indigenisation. The "Make" category has some parameters, but we need to work out processes for selecting a development partner for a system where the end product is not fully defined. We buy on a lowest cost (L-1) basis but how do you cost if the product has not been defined?
There is an unresolved debate on increasing FDI in defence…
FDI is not really relevant to DRDO. But, as an engineer, I feel FDI brings in skills that are essential for growth. In the automobile industry, it brought quality processes in manufacturing, automation, cost consciousness. Once foreign partners invest, their teams get integrated into management and that can transform the industrial pace and capability.
The counter argument is that defence is a sensitive matter, and so how much FDI is acceptable? That debate has to be resolved in appropriate forums. Also, if I transfer a proprietary technology to a firm, which is then acquired by a foreign company and it stops production, then it compromises our total programme.
Will the DRDO not be evaluating technology where companies apply for 100 per cent FDI on the grounds that high-end technology is being brought in?
We will be the arbiters who evaluate the technology. But we will not decide whether a particular technology is needed or not. That is a different role.
What are the difficulties in making your evaluation?
Evaluating technology is a tricky problem, even in offsets. We will need to identify and define critical technology. We will need to evaluate its cost. We will need to see how it fits in with our acquisition plans? These are the three keys issues that we are resolving. We hope mature methodologies will evolve on the costing of technology, its necessity, its impact factor, its long-term benefits and its ability to produce spin-offs.
What is happening on the Defence Technology Commission?
The DTC will have all stakeholders - the armed forces, MoD, PMO, scientific community, production community, industry bodies - together taking integrated, holistic decisions in the national interest, rather than in individual or group interests. I'm confident that it will come through by the end of the year. It has to go to cabinet for clearance. In principle there is no hurdle.
Will the DTC only set a broad agenda for indigenisation?
It will fix the parameters related to developing indigenous products - how to promote science and R&D, how to smoothen production interfaces, what kind of products and what numbers should be made...
Is the DRDO stepping up cooperation with overseas partners?
As India's capability and visibility grows, there will be more partnerships. Increasingly, a major part of the development would be from the Indian side with a small part coming from abroad.
But this is getting bogged down in procedure?
If we have to attract overseas partners we must simplify processes so that interfacing becomes faster. The world will not wait. If we delay, they will look for other partners.
