‘Make in India’ minus military preparedness?

India’s defence procurement continues to raise more questions than answers, points out Hemant Shivakumar, with the uncertainty over the order of Spike Anti Tank Guided Missiles (ATGMs) appearing to be the latest casualty to the ‘Make in India’ initiative.

Confusion persists over India’s purchase of Israel’s Spike missiles. India’s Defence Ministry is yet to officially admit whether it has retracted its order of nearly 8,500 Anti-Tank Guided Missiles (ATGM) and 300-odd missile launchers, choosing to release conflicting information through unofficial sources. The Indian Army, which is currently using MBDA’s Milan family and Russian Konkurs-M ATGMs – planned to equip its infantry and mechanized units with the new Spike systems. Nixing the USD 500 million ATGM deal – at the insistence of India’s Defence Research and Development Organization (DRDO) – especially with Israeli Prime Minister Netanyahu due to visit India in mid-January 2018 is puzzling. Unless the vision of domestic indigenization has trumped immediate military concerns, the lack of balance in addressing the Army’s requirements raises serious questions about India’s procurement-related decision-making.

Explaining the deal: a primer

The Indian Army’s requirements of 40,000 ATGMs over the next 20 years underline the urgency towards maintaining combat preparedness by restocking its current inventory, explaining why the Indian Army raised a Request for Proposal (RFP) in the first place. A 2014 report pointed that the Indian Army did not carry enough ammunition – including critical ATGMs – to fight an intense battle for 20 days. Eventually, in October 2014, India’s Defense Acquisition Council (DAC) picked the Israeli ‘tank-killer’ missile family over the US-built Javelin, with former Defence Minister Arun Jaitley stating that ‘national security was the paramount concern of the government.’ Subsequent negotiations ran into pricing issues with the MoD formally red-flagging Rafael Advanced Defense Systems. Some headway was made soon thereafter with the negotiations entering advanced stages during PM Modi’s visit to Israel. In January 2017, former Chief of Army Staff, General Dalbir Singh remarked that acquiring the Spike missiles was part of the army’s modernization roadmap. The Indian private sector also reflected optimism about the deal. Pune-based Kalyani Systems entered a Joint Venture (JV) with Israel’s Rafael Systems to manufacture these missiles in Hyderabad. Meanwhile, in September 2017, the DRDO concluded the developmental trials of the indigenously developed Nag (now Prospina) ATGM. Subsequently, in November 2017, the MoD is reported to have canceled the Israeli contract while tasking DRDO with developing ATGM missiles, although a more recent report, citing ‘sources’, said ‘the Indian Army is moving ahead with a proposal to buy Spike anti-tank guided missiles’.

Was the Nag trial a success?

Mixed messages prevail around the DRDO’s claims of successful testing of the current version of the Prospina. Development trials of the Prospina concluded in September 2017, and both the DRDO and the Government maintained it was successful. However, recent reports indicate that the Army was far more cautious in its assessment, suggesting that more trials were required. If this were true, it would leave the DRDO and the government in a perilous position. Often, such simple public relations’ confusions carry strategic implications for military observers and adversaries.

Make in India – only for Defence Public Sector Undertakings (DPSUs)?

If the Spike order is canceled, it will be only the latest in a list of scrapped purchases of products offered by foreign Original Equipment Manufacturers (OEMs) – after RFPs and years of trials. In June 2017, the DAC cancelled the ongoing six-year tender for Short-Range Surface-to-Air (SRSAM) and decided to induct two regiments of the indigenously developed Akash missiles. Similarly, after several trials with the Very Short Range Air Defence System (VSHORAD) over the last three years, the MoD is proposing to entrust the DRDO with developing this system. The foreign OEM procurement process resembles a minefield – multiple vendors during initial bidding, compliance of the weapon platforms during development and user trials, favorable Transfer of Technology terms (ToT) and pricing, besides mandatory offset requirements – with OEMs catering to the Army’s ambitious General Staff Qualitative Requirements (GSQR). The developments and the subsequent decisions are often both convoluted and leave observers bemused.

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Further muddying the waters are the JVs and investment by newer domestic private organizations who will feel that they have been hung out to dry. For instance, India’s Kalyani Missile Systems joined together with Israel’s Rafael Advanced Defense Systems to supply key components to the missiles through Kalyani Rafael Advanced Systems (KRAS) in Hyderabad. As the Kalyani Group chairman remarked during the inauguration of the facility in August 2017, the KRAS manufacturing unit is equipped to begin delivering orders of the missiles within a span of weeks. But the cancellation or modification of the Spike deal – in favor of PSUs – risks stymieing private sector enthusiasm in the defence indigenization vision.

All of which puts the spotlight back to DRDO and its underperforming subsidiaries. Should the DRDO produce an advanced working prototype of the Prospina over the next two years, it would still require the Ordinance Factory Board (OFB) and subsidiaries such as Bharat Dynamics Limited (BDL) to shake off their sluggishness and manufacture on scale. This will not be straightforward. In a 2013 report, the Comptroller and Auditor General (CAG) of India castigated Bharat Dynamics Limited(BDL) for failing to domestically scale up to develop and produce Konkur-M ATGMs despite having a manufacturing license and relevant ToTs from Russia. The report stated that “efforts of the Ministry of Defence to indigenize production of Konkurs-M missiles to reduce foreign dependency were defeated.” Eventually, the inventory shortfall created by BDL led the MoD to import 10,000-odd ATGMs from Russia at an additional cost of US$ 188 million. 12 of 14 DRDO’s Mission mode projects remain delayed due to lack of monitoring and accountability, a longstanding trait that Prime Minister Modi urged the DRDO to rectify. Domestically, the DRDO is yet to produce a time-bound design and production roadmap of the advanced version of the Prospina but initial estimates peg it at 3-4 years. The aerial version of the Prospina – Helina – to be used by the Army Aviation Corps is also reported to under development. But delays could leave the Army shortchanged.

The balancing act

Even if one concedes that India-Israeli strategic partnership grants political room to maneuver US$ 500 million deals, India is likely to drop a few spots on Israel’s export reliability index. After all, the Spike ATGM was reportedly finalized by the Indian Army and the MoD after nearly a five-year long period of testing and trials. The Spike is a premier anti-tank weapon, and the Spike family of missiles would have been inducted on the BMP-2 ‘Sarath’ vehicles, and the MPATGM used by individual infantry soldiers. By keeping faith with a tetchy DRDO and its precarious production line in the background of the 2017 Doklam standoff, India’s decision makers walk a tightrope in shaping a larger national indigenization vision at the cost of pressing military needs.