One key lesson from the Ukraine crisis is that at the end, one has to actually depend on one’s own defence capabilities. And for that, the best way forward is to become aatmanirbhar.
The Russia-Ukraine conflict has made countries around the globe re-evaluate their defence capabilities to ensure that either they are self-reliant or have good friends backing them if they are to face such standoffs. India’s position amidst this chaos seems precarious because of its recent decisions like abstaining vote at the UNSC and buying crude at discounted rates from Russia. This seems to have hit India’s relations with the US.
Global Uncertainties
Chinese Foreign Minister Wang Yi’s recent visit to New Delhi was intended to restore some degree of normalcy in bilateral relations, so that Beijing could invite Prime Minister Narendra Modi to visit China later this year to attend the BRICS summit. Contrary to the usual practice, no official photograph of him being received by the Government of India was released by the MEA. The meeting also failed as New Delhi’s stance was very clear that it could not be “business as usual” with China as long as the PLA did not withdraw its front-line troops from the remaining face-off points along the LAC.
In just a few days Israel’s PM Naftali Bennet is set to visit India which brings a lot of hope on actual work getting started towards the New Quad (India-Israel-UAE-USA). With the original Quad not very active on military support for members, Bennet’s visit to India will remain very crucial on defining the roadmap for bilateral as well as multilateral ties, especially in a situation when India still needs Israel’s technical support for advanced defence manufacturing.
On the other hand, Pakistan PM Imran Khan faces a no-confidence motion brought by an enraged, united opposition that he might well lose which even if he survives, he will find his political capital severely dented — and be even more in debt to the military. With Pakistan backing the Taliban right from its earliest days, concerns around national security are bound to shoot-up.
India Today
India has undoubtedly taken significant steps in the direction of achieving aatmanirbhrta by producing many indigenous defence equipment like Arjun Mk-1A Main Battle Tanks (MBTs), LCA (Tejas), Arudhra, aircraft Carrier ‘Vikrant’, etc. But the question remains, whether these steps are sufficient?
Defence manufacturing has long been concentrated in the hands of government agencies like HAL, BHEL, BEML, etc, and the deficiency of leading private companies in the space like Tata, Reliance which possess the capacity of producing in large scale while maintaining efficiency is a big constraint that the nation needs to overcome. Such a partnership is not just vital for production purposes, but equally for knowledge transfer especially in a time when cyber warfare is emerging as a growing threat for nations across the globe.
In fact, one of the most important reasons why a country like Israel has a much successful defence ecosystem is because of its public-private partnership model that breeds entrepreneurship and innovation. Moreover, to encourage people to not fear failure, incubators are also set up by the Israeli government, which give $600,000 risk-free loans to promising start-ups. If companies fail, they don’t need to pay back the loan. But if they succeed, they pay back a 3 per cent annual royalty.
Defence Trading Relations
According to International Arms Transfers, 2020, a report by the Stockholm International Peace Research Institute (SIPRI) Between 2011-15 and 2016-20 Indian arms imports decreased by 33 percent. Russia is the largest arms supplier to India. However, Russia’s deliveries dropped by 53 per cent between the two periods and its share of total Indian arms imports fell from 70 to 49 per cent. In 2011-15 the US was the second largest arms supplier to India, but in 2016-20 India’s arms imports from the US were 46 per cent lower than in the previous five-year period, making the US the fourth largest supplier to India in 2016-20. France and Israel are the second and third largest arms suppliers to India in 2016-20. Combat aircraft and associated missiles made up more than 50 percent of Indian arms imports in 2016-20.
Recent Policy Measures
An ambitious export target of Rs 35,000 crore ($5 billion) in aerospace and defence goods and services has been set for the year 2025, in the draft Defence Production and Export Promotion Policy 2020. The Government of India also approved a budget of Rs 498.8 crore for the next five years to support over 300 start-ups and foster innovation in the same sector.
The 2022 defence budget registered a healthy rise of 9.48 percent from Rs 4.78 lakh crore last year to Rs 5.25 lakh crore in the next fiscal. The key highlight remained that 68 percent of the modernisation budget would be reserved for domestic industry for which steps have been taken like banning imports of 101 defence related weapons and equipment, over the period 2020-25.
Evolving Challenges & Way Ahead
Even though self-reliance is the only answer in the long run, in a relatively shorter time frame, India needs to diversify its trade volume with more countries like France and Israel to have a smooth supply chain in case of a sudden standoff with neighbours like Pakistan or China. This becomes even more important when China is spending 3x on defence than India. Ramping up Free Trade Agreements (FTAs) in the defence space could be one possible solution to the constraints in the short run. The recently concluded India-Australia agreement is a big step in the right direction.
However, the ultimate defence capability still remains to be of nuclear prowess and we witnessed this in the recent Ukraine crisis as well. Had Ukraine not dumped its nukes in the 1990s it would have been in a much safer position today. Thankfully, for India, after Pokhran’s Operation Smiling Buddha it can be asserted that India remains well equipped to tackle any engagements.
Unlike AUKUS (Australia, the United Kingdom, and the United States) which was built to boost relations on ground of defence by arrangement involving supply of nuclear-powered submarines to Australia to counterbalance China’s military prowess, Quad remains very weak as there is no defence component to it. The US, which earlier gave a CAATSA waiver to India for procuring S-400 from Russia, is also pondering to reverse the decision which will come as a big blow. One key lesson from the Ukraine crisis is that at the end, one has to actually depend on one’s own defence capabilities. And for that, the best way forward is to become aatmanirbhar.
Rajesh Mehta is a leading consultant & columnist working on Market Entry, Innovation & Public Policy. Sandesh Dholakia is the founder of Case Ace and the Asia Pacific Chairman at International Finance Students’ Association. Views expressed are personal.
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