Arms industries in India, China and Pakistan need to modernize to be competitive

Arms industries in India, China and Pakistan need to modernize to be competitive

India, China and Pakistan have indigenous arms industries in order to sustain their independence and assert their power in the region and beyond, but they, China included, lag behind the West in terms of organizational structure and technology, writes P.K.Balachandran in www.southasianmonitor.com.

Indeed, all three countries have come a long way from total dependence on friendly foreign suppliers to meeting many of their requirements from indigenous sources. They are even exporting to other countries. Not surprisingly, China is streets ahead of India and Pakistan in arms production and export and is aiming at overtaking leading Western countries by 2020.

But defense industries in these countries are being held back by structural issues entrenched in the over-arching political and bureaucratic system. Reforms are urgently needed to bring about efficiency, innovativeness, cost-effectiveness and competitiveness, attributes which are essential for survival in the globalized marketplace.

With 1.3 million under arms, India has the second largest standing army in the world after China’s. Besides, it has 1.2 million in reserves and 1.4 million in its paramilitary outfits. It is believed to possess 90-110 nuclear bombs. Its defense budget is US$ 51.3 billion, which is 2.3 % of its GDP.

Pakistan has a 600,000 standing armed force, 300,000 men in reserve and 100-120 nuclear war heads. Its defense budget is US$ 9.5 billion which is 3.4% (higher than India’s figure).

China’s Peoples’ Liberation Army (PLA), which includes its Navy and Air Force, has 2.3 million men and women. This is to be cut by 1 million soon, but only to arm it better and make it “lean and mean”. China’s paramilitary comprises 500,000 persons. It has 260 nuclear warheads. Its defense budget is a whopping US$ 214.8 billion. But as a percentage of the GDP it is a minuscule 1.9%.

India’s armed forces look good on paper. But among other deficiencies, the country’s defense industries are backward. No wonder that even 70 years after independence, India imports 70% of its military hardware. Its ammunition stock is sufficient only for 10 days of fighting. Today, India has the dubious distinction of having been the second largest importer of arms, next only to Saudi Arabia, between 2011 and 2016.

Faced with traditional rival Pakistan and a resurgent and assertive China, India has to import more. According to defense commentator Ajai Shukla, India’s arms are of the 1970s vintage. According to Jane’s, the Air Force’s 45 MIG 29K jets are up to 40% not airworthy at any given point of time. India had 13 submarines at one time, but now it has less of them than Pakistan. India has been trying to devise or buy a suitable field rifle since 1982 but it yet to succeed. It has not made or purchased a medium range gun like the Bofors gun, since the Bofors guns were bought in the 1980s.

But besides all this, India’s defense industry, though large (the outlay for it is a whopping Rs. 250 billion (US$ 3.9 billion) by the last count) is inefficient and incompetent.

Speaking at a public forum recently, the Vice Chief of Army Staff, Lt. Gen. Sarath Chand, said that Pakistan has a better defense industry than India. Being almost entirely in the public sector the Indian defense industry is weak because there is no competition and no motivation to innovate, do better and faster.

In an article in The Statesman on August 1, Maj. Gen. Harsh Kakkar, pointed out that the overheads in the Indian ordnance factories are as high as in other public sector undertakings in India. Therefore, costs and prices are high. Because of a lack of innovations and quality consciousness, products fail at the field level. Twenty officers were killed in an arms depot explosion at Pulgaon when anti-tank mines exploded due to a TNT leak. Complaints to the manufacturing companies went unanswered as usual.

Manufacture of arms gets delayed because parts are not available or are not made available on time. The tank factory at Avadi near Chennai, delays delivery because of non-availability of parts. There is also wanton wastage as in the case of truck manufacturing. The Vehicles Factory is located in Jabalpore, but the parts are made by Ashok Leyland at Bengaluru. The parts are transported to Jabalpore to be assembled over a thousand miles when this could easily have been done at Ashok Leyland at Bengaluru.

Writing in the Indian Defense Review, Brig Arun Bajpai says that India’s defense industry comprising 41 ordnance factories, 42 laboratories and eight Public Sector Undertakings is under performing because it is working on inherited pre-independence principles.

According to Western sources, Indian technical skills being low, the integration of indigenously developed systems with imported ones, is unsatisfactory, causing delays in joint development projects.

Recommendations of two committees to reform the system to meet modern needs, made since 2003, have been ignored. Bajpai notes that it is only now, Prime Minister Narendra Modi has unshackled the tri-forces from the mandarins of the Defense Ministry by empowering the Vice Chiefs of Army, Navy and Air Force to take financial decisions.

In the past few years, and especially after Prime Minister Modi inaugurated the “Make in India” project, the private sector has been roped into the hitherto highly restricted defense production area. But in a media interview, a private sector representative, Vinay Kaushal, said that annual policy changes make it very difficult for private sector to participate. Furthermore, the interest rate on bank loans is high at 9.65%. And it takes months to get the required clearances from multiple agencies and ministries apart from the Defense Ministry.

However, India has been making modest headway in exporting military hardware.      This new emphasis on exporting military wares has yielded early results with Indian defense exports doubling over the course of the past year to about $330 million in 2016. The target is to export $2 billion worth in two years.

India has exported select avionics for Malaysia’s Su-30 MKM fighters. Indian exports to Afghanistan, Nepal, and Namibia have included light helicopters. India  has developed HMS-X2 sonars to Myanmar and protective armor for NATO members like Turkey. A range of spares, mechanical components, and electronic assemblies are being supplied to global manufacturers. The 1,300-ton US$ 50.8 million Offshore Patrol Vessel (OPV) MCGS Barracudawas supplied to Mauritius in December 2014. The Goa Shipyard Limited has supplied an Advance Offshore Patrol Craft to Sri Lanka, and eleven Fast Attack Craft (FAC) and two Fast Patrol Vessels for Mauritius.

Typically credit is given for buying Indian equipment, but the BrahMos missile is being sought for its capability. Vietnam, Indonesia, UAE, Chile, Malaysia, the Philippines, South Africa, Algeria, Greece, Thailand, Egypt, Singapore, Venezuela, Brazil, and even Bulgaria have expressed interest.

Pakistan

As regards, Pakistan, its defense production for local use has reached $1.5 billion per annum, according to a report published in the journal Jane’s Defense Weekly, which quoted an unnamed Pakistani official as saying: “We have substituted imported defense equipment worth US$1.5 billion, which for us is a huge bonus”.

Pakistan exports its Khalid battle tanks and J-17 fighters. But the quality of its ammunition has been questioned in some countries like Oman. Like India, Pakistan too has to involve the private sector to make quality products.

China

In 2016, China’s defense industry produced products worth US$ 362 billion. China has reached high levels of competence in some sectors like missile technology, but research in other areas is still lagging behind leading to continued dependence on Russian technology. Its submarines are still too noisy.

China’s state-owned defense industry faces many challenges typical of the public sector anywhere. Due to high centralization and security consciousness, inefficiency, lack of innovation in certain areas, and mounting debt are prevalent.

There is now a move to involve the private sector. As a first step, between 2010 and June 2016, the defense industry raised US$ 62.87 billion by issuing bonds and equity.

President Xi Jinping has called for a scientific and technologically advanced and better organized PLA. But at the same time, he made it clear that the Communist Party will have the final say in military matters and that the structure will continue to be highly centralized.

(The featured image at the top shows a Chinese J-10B fighter)

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