Defence Secretary Sanjay Mitra had said at the recently held “DefExpo” that the Strategic Partner (SP) policy was still at a preliminary stage.
Notably, there are fundamental flaws in the current Strategic partnership (SP) policy and it will definitely take a few more years for orders to commence.
What is the Strategic Partnership (SP) Policy?
The intention of the “SP” policy is to promote the private sector to primarily manufacture – fighters jets, helicopters, submarines and tanks, in India.
The partnership envisions facilitating technology transfer from a foreign ‘Original Equipment Manufacturers’ (OEM) to a local partner on agreed terms.
This will aid Indian firms to access the technical knowhow on weapons manufacturing while also simulataneously boosting foreign investments.
Notably, to bring a spread in skills among many firms, the policy mandates only one class of weapons to be manufactured by one local partner.
The process designated to select a SP is long and arduous and nominated firms must demonstrate its financial and technical potency to be selected.
What are the challenges?
It is a fact that even the most strong of Indian firms dont currently pocess the capability to build sophisticated military hardware.
For example, building a warship demands expertise not just in welding, fabricating, plumbing and wiring.
More specifically, establising a battle ready platform requires expertise in high-tech propulsion systems, environment management tools and sensors.
Notably, public sector shipyards like Mazagon Dock and Garden Reach took almost 50 years to aquire the current level of expertise to build warships.
Similarly, even Hindustan Aeronautics, which is the only Indian company capable of manufacturing fighter jets, had taken decades for the achievement.
These public enterprises literally began with nuts and bolts and simple sub-systems, and then graduated to more complex systems.
What is the risk of rushing through with partnerships?
In the urge to quickly build private sector capability, the SP policy seems to be demanding unreaslistic technological capabilities from aspiring firms.
Even with the best of intentions and handholding from foreign OEMs (foreign firms), Indian firms will be hard-pressed to build a modern fighter or frigate.
SP projects require at least a 40% indigenisation, but the most costly components like propulsion systems and sensors will have to be imported.
This implies that a large amount of fabrication and final integration has to be done in India to meet the 40% indeginisation target.
All this would mean an undesirable dependence on the foreign partners to compensate for the slack by the local firms.
What is the way ahead?
Aspiring Indian defence firms like the Tata group, L&T, started manufacturing relatively simple components and then graduated to sub-systems and systems.
These firms seem to be on the right track and they can eventually graduate to manufacturing fully finished equipments.
But the government needs to be realise that if this process of gradual evolution is rushed beyond a point, it will become counter productive.
