The Efficacy Of The Make In India Programme

The Efficacy Of The Make In India Programme

More than the statistics, which at $62 billion inflow, between 2014-16,  so far, define the biggest FDI gush yet - it is the sea-change in thinking that the Make In India programme represents.

Not only are we at a unique juncture in the global scenario, where very few really good investment destinations present themselves, but we have something of an insatiable appetite, thanks to the size of the country, its needs, its population and its growth rates.

And with dynamic changes in policy- we are not cleaving to the old shibboleths of a mixed economy any more, nor to the  ‘commanding heights’ reserved for the state and the public sector. We are growing pragmatically, with the collaborations and stand-alones working to achieve the best fit instead.

The DRDO, for example, is being tasked harder than ever before to deliver, but it will not be thrown over. But neither will it enjoy its lazy and inefficient monopoly, alongside HAL, as Air India knows only too well.

It is early days yet, but given a straight run for the next 15 years, this Make in India programme, in its vastness, will change the face of India, as we know it, forever.

It has brought the private sector into partnering highly sensitive defence production of planes, helicopters, guns, tanks, etc. for the very first time, but without any hesitation.

And also, into the private aviation space, submarines, ships, tanks, armoured carriers, artillery, ammunition and aircraft-carrier spaces.

The public-private and government-private/government-government collaborations include missile development/deployment, surveillance/attack drones, super-computing, satellite tracking, solar, nuclear energy machinery.

It includes electricity infrastructure and manufacturing equipment.

There is leap-frog technology ingress in road/port/ bridge/tunnel/airport building, operating, and maintenance know-how, and technology.

The much needed real-time intelligence sharing apparatus to catch terrorists also needs very high technology. This too is being inducted.

Other moves are in the area of crop improvement, farm production, distribution, marketing, food-processing/value addition/wastage/spoilage reduction/packaging/specialised handling, transportation, storage processes, and infrastructure, to serve a full 50% of the population. 

In construction of smart cities, and housing for all by 2022 programmes, there is much induction of the intelligence of things (IoT), and other advanced artificial intelligence, automation, and IT involved. This is a catch-up and deliver game for our sweated-shop IT industry so far, and will have a bearing on its survival rate too.

With the 4^th largest railway system in the world, languishing for most of the 70 years since independence, barring some electrification and diesel engine induction, the move is towards the latest railway and metro building technology, coming in thick and fast.

In addition, realising the limitations of wanting to share in the latest and the best beyond a point, India has invited very high-technology defence manufacturers around the globe to come and make in India with 100% ownership of its own assets and technology secrets.

Lesser percentages of foreign ownership, in collaborations, are also being welcomed. Anything up to 49%  FDI in defence manufacturing is now put on an automatic fast track.

Tens of thousands of billions, perhaps trillions, in this investment intensive  space, with possibilities of a brand new and high-value export stream are on the horizon.

This, particularly as we are new members of the missile club already (MTCR-Missile Technology Control Regime), and within barking distance of the nuclear supplier’s group (NSG), and even the UNSC.

And lakhs of employees with high technology skills will be created also for the very first time.

India continues to be the largest defence related purchaser in the world. This includes vehicles, planes, tanks, guns, arms and ammunition, but encompasses many other items which are part of the defence logistics requirement.

Meanwhile, naval ship building has come of age, to an extent when we are able to build patrol boats and stealth frigates almost in their entirety domestically, and are beginning to export such ships as well.

We are now extending this capacity to aircraft-carrier building in collaboration with the best in the US. And submarines, including nuclear submarines, with our first indigenously built one in sea trials now prior to induction.

Of course, in all of this, missiles included, where we are probably the most advanced in know-how, a great deal of bought-out componentry is a feature still. Our own R&D set-up is quite woebegone, but there is the argument about rebuilding the wheel as well.

We are also beginning, because the political will favours it at last, to finish the marque 1 of the indigenous light combat aircraft project. after a quarter of a century delay, and manifold cost over-runs.

We have now inducted the first two Tejas  fighters into the Indian Air Force (IAF). The idea is to build up  a squadron in due course, and build a marque 2 of the Tejas, with more advanced features for further combat squadrons, at a much lesser cost than bigger fighters being negotiated for joint-venture development/manufacture, as well.

But this induction represents a major change in the mind-set that refused to let indigenous production gain ground.

Meanwhile, while these corrupt shenanigans dominated defence and security policy-making, the armed forces were starved of essentials as well as state-of-the-art equipment.

Our IAF planes are so old that they routinely crash, killing their pilots and passengers.

We didn’t have any field gun purchases since the Bofors artillery pieces, purchased in the eighties. Now, at last, the Modi government has placed orders for American howitzers for mountain warfare, and more, with the South Korean ones being manufactured by L&T, tracked for off-road use, and for the plains.

The imports from America too are to be supplied quickly at first, to meet urgent requirements, and then manufactured in India in joint venture with the Indian private sector.

We don’t use a modern state-of-the-art automatic rifle yet, when even  Pakistani terrorists do. And we don’t even have enough ammunition!

Our troops do not have protective gear such as bullet-proof vests and helmets in adequate numbers, or up to the required strength and quality. Ditto night-vision goggles. This litany can go on and on.

But, at last, something is being done about it all, and in a comprehensive manner.

Look at the evidence. Boeing, Lockheed Martin, SAAB-AB, Dassault Rafale, the Eurofighter Typhoon, Shinmaya of Japan, the Russian S-35 in joint-development, T-90 tanks replaced by Arjun Mk2, are all, once more, in the fray.

The fighters/bombers/transport aircraft, procured/agreed-to will be a combination of fly-away and manufacture/assembly here; replete with technology transfer, upgrades, development of the supply chain, spares, and localised R&D.

From Japan, a supply of 12 amphibious search-and-rescue planes for a start, is under negotiation. In the end, much of all this will see itself to fruition including particularly, the early successes of indigenous production.

This partially because with a Rs. 2.58 lakh crore defence procurement budget, India has the capacity to make the difference between solvency and bankruptcy in several of the cases. But if the bulk of it is spent in India, it can make a big difference to both preparedness and the economy.

Meanwhile, the K9 155 mm Vajra mobile howitzer (a version of the Samsung mobile howitzer), from L&T, is on order. It is Rs. 4,500 crores worth, for a 100 guns. These can scoot around at 60km an hour on its own tracks and fire eight rounds a minute.

Tata Advanced Systems has signed on with Bell Helicopter to make both commercial and military rotary wing helicopters in India.

And Tata Boeing Aerospace in Hyderabad is going to co-produce fuselages for the  Apache combat helicopters, its AH 64; considered to be the world’s most advanced.

Boeing is also training Indian IAF pilots locally at its first Globemaster III Simulating Centre  opened  last year, in Gurgaon (Gurugram).

There are missile systems already inducted, developed in joint-venture with Israel and Russia, Brahmos, Barak and so on.

While automobile projects, including parts, ancillaries, and electronic factories connected with mobile telephony, account for most of the FDI into manufacturing/assembly at present; this activity, prominent today, is really in continuation from UPA times.

A lot of it is designed to take advantage of more favourable taxation if the manufacturing/assembly is done locally, and to a certain extent as a process that fuels export to other countries, over and beyond the considerable local demand.

In vehicle parts and accessories, indeed even aeroplane parts, India has a good reputation now, and its production is specified as OEM in top end marques such as Mercedes Benz and Boeing.

Meanwhile, another automobile manufacturer, Kia of South Korea is planning to come to India shortly, and is scouting locations for the purpose.

In future though, nuclear, solar, even conventional thermal electricity generation and equipment connected to it, may however, prove to be the biggest Make in India growth areas, outside, that is, of defence and infrastructure.

It seems that the opposition that mocks this programme as grandiose, and ultimately vacuous, have no idea about the strides made in 25 months, and its potential to transform - or do they?

For: The Pioneer

(1,493 words)

July 23^rd, 2016

Gautam Mukherjee