India aspires to be an economic and military power. To achieve that, India must possess the necessary military strength to ensure security of its national interests in a dynamic international geo-political environment. Worrisomely, slow and tardy modernisation of the Indian armed forces has been a matter of concern for all those who are concerned with national security. Existing critical deficiencies prove that India has failed to keep abreast with newer weapon systems and technologies. Many attribute this state of affairs to archaic mindsets, poor planning and convoluted procedures.

After the Kargil War, the Group of Ministers (GoM) on National Security had also attempted to identify the regime’s weaknesses. The Group, in its report of February 2001, stressed the need to bring about improvements in the structures and procedures. Consequently, a new set-up was established in the Ministry of Defence (MoD) in October 2001 and a new defence procurement procedure (DPP-2002) was put in place. Initially, three routes were spelt out for progressing procurement proposals, i.e. ‘Buy’, ‘Buy and Make’ and ‘Make’. However, within an year, cases under ‘Buy and Make through Imported Transfer of Technology’ were also included in the procedure.

In the review carried out in 2005, the ambit of the procedure was expanded to include the offset policy. DPP-2006 contained three major changes – splitting of ‘Make’ category; sub-categorisation of ‘Buy’ decisions as ‘Buy (Indian)’ and ‘Buy (Global)’; and introduction of Integrity Pact for all procurements over Rs 100 crore. Subsequently, DPP-2008 introduced measures to promote transparency.

Despite repeated reviews, there has been no discernible improvement since 2002. Worse, instead of streamlining the procedure, every review has made the process more complex, confusing and hard to comprehend. The latest version (DPP-2016) is a mammoth document, running into close to 500 pages. As the defence production and procurement regimes remain trapped in the quagmire of bureaucratic inefficiency, the services continue to wait indefinitely for new equipment to materialise. Unquestionably, India’s defence procurement system has been an utter failure.

Indicators of the Failure of the Procurement Regime

The stated objective of the procurement procedure is threefold – to ensure expeditious procurement of the approved requirements of the armed forces in terms of capabilities sought and time frame prescribed by optimally utilising the allocated budgetary resources; to demonstrate the highest degree of probity and public accountability, transparency in operations, free competition and impartiality; and to keep the goal of achieving self-reliance in defence equipment in mind.1 As stated earlier, despite all efforts, there has been no speeding up of the procurement process. Funds continue to get surrendered while the services remain deprived of critical equipment. Decision making continues to be highly sporadic and erratic. Questions are still being raised regarding lack of transparency and objectivity of the process. Competition remains limited. Indigenous defence production continues to languish. The country remains dependent on imports for all major requirements. Quite shamefully, India holds the dubious distinction of being the largest importer of conventional weapons in the world.

Ideally, inventory of a military should consist of 30 percent state of the art equipment, 40 percent equipment of matured technologies and 30 percent equipment nearing obsolescence. In India’s case, the respective percentages are 15, 35 and 50. Thus, in addition to regular modernisation/upgradation plans, India has to make up the existence deficiency of 15 percent of the state of the art equipment. It is a huge challenge as modernisation of the armed forces is lagging behind by more than 10 years. See Illustration 1.

Illustration 1: India’s Defence Inventory – Worrisome Level of Obsolescence

India’s defence industry is in a pitiable state solely due to the gross inefficiency of the public sector. Instead of mastering imported technology and using it as a spring board to develop newer technologies, the public sector has found the easiest way of making money by acting as pure traders – assembling imported subsystems and selling them to the captive military at unethically exorbitant profits.

Every effort is made to inhibit the entry of private companies in the defence sector, lest they provide competition to the sloppy public sector. Enormous potential of India’s vibrant private sector remains untapped. Efforts to recognise the well-established private companies as Raksha Utpadan Ratna have been aborted. The much awaited policy on Strategic Partnership continues to remain under consideration since 2016. As regards DPP, not a single major contract has been successfully concluded since 2001 in a competitive environment without getting embroiled in allegations of wrong doings. Every successful deal has been on single-vendor government-to-government basis, showing total hollowness of the procurement system. The ‘Make’ procedure has been a non-starter.

All nations seek offsets that are in consonance with their national needs – either to meet an urgent economic need or to fill a critical technology void. Shockingly, India has abdicated the right to select methodology, fields and offset programmes to the vendors, thereby rendering India’s needs inconsequential. As is expected, foreign vendors opt for programmes that cost the least and are easy to fulfil. Since India lacks a credible verification mechanism, it is an open invitation to unscrupulous foreign vendors and their dishonest Indian partners to collude and cheat the country by presenting exaggerated claims. MoD has no option but to accept their claims at their face value. The Comptroller and Auditor General (CAG) has severely faulted the offset regime on multiple counts.2

Reasons for Failure

Apparently, the government has failed to put in place a responsive, dynamic and effective defence procurement regime. The complete process suffers from indifference, apathy, inefficiency and lassitude. Old bureaucratic mindsets and penchant for status-quoism inhibit forward thinking.

It appears paradoxical and incongruous that repeated reviews of DPP result in retrograde measures. Every provision is public sector centric. Despite loads of frequently doled out promises, the private sector continuous to be a fringe player with enormous untapped potential. Clout wielded by the public sector stalls every move towards open competition. With a view to safeguard interests of an inefficient and uncompetitive public sector, all policy initiatives attempt to ensure its monopoly and predominance.

There are 39 ordnance factories and the Ordnance Factory Board is the largest departmentally run industrial undertaking in the country. In addition, MoD has 9 defence public sector undertakings. Despite getting preferential treatment from MoD, they have singularly failed to keep pace with world-wide developments. They thrive on periodic infusion of transferred technology and have developed no indigenous competence.3

The Defence Research and Development Organisation (DRDO) is like an albatross around the services’ neck. It promises a lot but delivers little. Not a single state-of-the-art weapon system has been developed or produced by it so far. On numerous occasions, the services have been denied urgently required equipment because of DRDO’s claims of indigenous development. Even if DRDO is able to make some progress in a few cases, it is always done with major compromises with respect to the stated qualitative requirements. The services are forced to accept sub-optimal equipment. It has been a history of false claims, tall promises, unexplained delays and sub-optimal products.4Recent restructuring of DRDO has been a meaningless exercise.

Indifferent quality of the acquisition staffis the single most important reason for delays in procurements. Officials who perform acquisition functions are drawn from the civil services, defence forces and the defence finance. No one is selected for any special talent/qualification/flair for the job. Worse, no training is ever provided to them. Resultantly, their approach remains entrenched in bureaucratic mediocrity and procedural quagmire.5 Even CAG was forced to highlight the fact that defence acquisition was a cross-disciplinary activity requiring expertise and criticised the system of entrusting acquisitions to unspecialised personnel posted for three-year tenures.

As per the Indian offset policy, all defence contracts where the estimated cost of the proposal is Rs 2,000 crore or more will attract a minimum offset obligation of 30 percent of the estimated cost.6 Foreign vendors are unconvinced that the Indian industry can absorb offsets worth billions of dollars.

Indian officialdom is known for its haughty and pretentious attitude. Though called public servants, most officials consider themselves to be rulers and behave accordingly. Additionally, as awarders of high value contracts, they assume the role of dispensers of favours.7 Rather than considering businessmen as partners in enhancing nation’s defence preparedness, they are ill-treated. This adversarial relationship results in total lack of communication resulting in misapprehensions, and thereby, giving rise to doubts about the transparency and fairness of the process. Many aspiring entrants lose heart and get dissuaded.

Recommended Reforms

In the absence of a strong will to transform, India continues to flounder in the labyrinths of bureaucratic indecision while the country suffers – the armed forces are not getting the required equipment in time and the indigenous defence production is languishing. True test of national leadership is not routine governance but ability to take bold and radical decisions to put a derailed and inefficient system back on track. Here are some recommendations for the government to consider:

1) Creation of an Empowered Independent Entity

To start with, it must be appreciated that planning and implementation functions are distinctly different. They demand dissimilar but highly focused treatment. Therefore, they must be segregated. Planning functions should primarily be performed by officials and military leaders who possess necessary understanding of the national security concerns. On the other hand, implementation functions must be entrusted to professionals who are fully conversant with modern technologies and are aware of the latest management techniques to administer multi-faceted and multi-agency programmes.8 See Illustration 2.

Defence and Aerospace Commission   Ø  Receives plans approved by DPPC Ø  Converts capability needs into performance parameters          Ø  Analyses alternatives to acquire equipment within specified time Ø  Identifies the most beneficialand cost-effective route Ø  Oversees growth of indigenous defence industry Ø  Acts as nodal authority for offsets

Defence Perspective Planning Council   Ø  A broad-based overarching policy making body Ø  Approves identified capability gaps Ø  Approves 15-years Long Term Integrated Perspective Plan and 5-years Services Capital Acquisition Plan

Ministry of Defence

Executive Functions

Planning Functions

Illustration 2: Segregation of Planning and Implementation Functions

A Defence Perspective Planning Council (DPPC) should be constituted as the highest policy making body to handle all planning functions. It should be a broad-based body by including representatives of the Foreign Ministry, the Home Ministry and the National Security Advisor. Its role should include identification of capability gaps, approval of 15-years Long Term Integrated Perspective Plan and 5-years Services Capital Acquisition Plan. It should be empowered to approve changes in the acquisition procedure, grant deviations from the laid down policies and accord approval to invoke the Fast Track Procedure.9

India’s experience with the successes achieved by the Atomic Energy Commission and the Space Commission has been highly encouraging. It is time a similar setup is adopted for the defence sector for the executive functions. A Defence and Aerospace Commission (DAC) should be constituted to implement perspective plans approved by DPPC. It should be the nodal agency to oversee the complete defence acquisition process and the development of the indigenous defence industry.10 Suggested structure of the proposed Commission is shown at Illustration 3.

Exports and Cooperation Wing Promote defence exports through proactive initiatives and close liaison with industrial associations. Exploit opportunities for international armament cooperationdevelopment and exports.countries.

Acquisitions Wing An integrated set-up to undertake all acquisition functions relating to outright purchases and handle cases wherein indigenous production under licence is planned after initial purchase.

Maritime Industry Wing Oversee indigenous production of maritime systems, both under licence and through local development. Act as an interface between the government and the industry for maritime systems.

SME Wing Act as an umbrella agency to help SMEs to enter defence sector with their niche technologies and provide support to them in retaining their technological lead through continuous innovations. Liaise with industrial associations.                            Oversee import of technology and its absorption.     Help modify policies

Defence R&D Wing Evolve technology upgradation plan. Identify key technologies for focused attention, both through development and imports. Oversee absorption of imported technologies.  Supervise DRDO.performance. de with industrial associations.                            Oversee import of technology and its absorption.     Help modify policies

Defence Offsets Authority Independent and empowered single window agency to manage all offset activities in a predictable, efficient and transparent manner. Responsible for approving   and validating discharge of obligations. with decision making Liaise with industrial associations.                            Oversee import of technology and its absorption.     Help modify policies

Land Systems Industry Wing Oversee indigenous production of land systems, both under licence and through local development.             Act as an interface between the government and the industry for land systems.

Aerospace Industry Wing Oversee indigenous production of aerospace systems, both under licence and through local development. Act as an interface between the government and  industryfor aerospace systems.

Defence Technology Advisory Board

Policy Review and Training Committee Technology Advisory Board

Defence and Aerospace Commission

Illustration 3: Suggested Structure of Defence and Aerospace Commission

The Commission should be tasked to handle all activities pertaining to the production, acquisition and export of defence systems/equipment. For each procurement proposal, the Commission should debate, analyse and determine the route that should be adopted – outright import or indigenous development or a combination of the two. Factors like quantity, economic viability, urgency, criticality, indigenous capability and acceptable timelines would be the key deciding factors. However, technical evaluation and field trials should continue to be held under the aegis of the respective Service Headquarters as hitherto fore.11

The Acquisition Wing is the main executive arm. It should undertake all functions relating to outright purchases and finalisation of cases wherein indigenous manufacture under licence is planned. Like the current set-up, it should continue to be an integrated set-up to include officials from the Department of Defence, the Finance Division and the Service HQ.

Land Systems Industry Wing, Aerospace Industry Wing and Maritime Industry Wing will be responsible to oversee indigenous production of their respective systems, both under licence and through local development. These wings will also act as an interface between the government and the industry, both public and private sectors.

Small and Medium Enterprises (SMEs) are the engines that spearhead technological advancement. As they operate in niche segments, they acquire exceptional expertise; gain specialised knowledge; and master manufacturing processes. However, they lack resources to be able to compete with bigger players. They need hand-holding to thrive and deliver. SME Wing should provide necessary support to them.

The Defence R&D Wing should be headed by a military-technologist and its primary responsibility should be to keep a watch over the performance of DRDO, thereby making it accountable to an oversight authority. Additionally, the Wing should facilitate identification of technologies for import to fill critical gaps in indigenous knowledge and help accelerate the process of achieving self reliance.

The Defence Offset Authority should be an empowered authority with decision making powers for efficient management of the complete gamut of offset related activities in a predictable, efficient and transparent manner. Promotion of exports and international armament cooperation will be the primary responsibility of the Exports and Cooperation Wing. The Wing should encourage formation of multi-national consortia for the purpose.

Defence Technology Advisory Board should be headed by an eminent scientist. It should formulate policies and oversee their implementation to promote development of Indian defence industry in well-delineated phases. The Policy Review and Training Committee should act as an internal watchdog and maintain a databank of all successful and unsuccessful programmes to draw necessary lessons from them. The Committee should also be assigned responsibility to organise training programmes for all functionaries involved with acquisition and developmental assignments.

2) Integration of the Private Sector

Both the public and the private sectors are national assets. To build a globally competitive defence industrial base, it is essential to exploit the potential of both the sectors. It is only then that necessary economies of scale can be achieved in different fields of defence manufacturing. The government must shed its pro-public sector bias and tap the enormous technological prowess and potential of the private sector.

Undoubtedly, the public sector possesses vast facilities, huge work force and decades of experience in assembling imported sub-assemblies/components. On the other hand, the private sector has mastered modern tools of management. It has acquired innovative marketing and financial skills. The government must explore ways and means of public-private partnership to harness their respective strengths.

 

3) Policy Initiatives

No country can afford to neglect innovations. Innovation entails an energetic and dynamic drive that seeks to improve existing systems, processes and procedures for better results. Defence technologies evolve at a very rapid pace and undergo rapid obsolescence. Defence equipment needs continuous upgradation to be able to perform effectively. The government needs to build up a supportive ecosystem to facilitate easy assimilation of developing technologies for defence systems. It could be through an open architecture that allows ‘plug and play’ and promote development of cutting-edge technologies.

The government has rightly realised the importance of Foreign Direct Investment (FDI) in the defence sector for accelerated growth. In addition to the infusion of funds, FDI brings in latest technologies and modern processes. As the defence sector is highly capital intensive and the investible funds available in the world market are finite, every foreign investor is guided purely by economic considerations. If India is aspiring for huge FDI inflows, it must make itself the most lucrative FDI destination. For that, the policies have to be tailored accordingly.

India announced its intent to demand offsets against defence procurements in early 2005. The policy has undergone a number of revisions. Offsets do not come for free and generally result in price escalation by 10 to 20 percent. It is a huge cost penalty. Hence, offsets make sound business sense only if the trade-off results in extraordinary economic or technological gains. However, India’s experience of the past few years has been highly disappointing. No benefits have been drawn from the offsets received to develop a vibrant defence industrial base.12The policy needs to be revisited.

4) Need for Professionalism

No reforms can yield results unless the concerned functionaries are trained and equipped to translate progressive policies into tangible actions on ground. It is only in India that defence procurements worth billions of dollars are being carried out by functionaries who possess no knowledge of economics, financial management and military systems. It has generally been accepted the world over that an efficient acquisition work force can not only expedite procurements but also affect considerable saving of the capital expenditure in initial purchase price and associated life-cycle costs.13

Promotion of indigenous defence industrial capability and management of defence acquisitions are multifaceted processes and are highly specialised activities needing extraordinary professional skills and unique attributes.14 It is time India pays attention to the quality of the workforce and takes concrete steps to improve it.

 

Conclusion

Defence procurements are intrinsically linked to a nation’s security concerns. The nation spends a considerable part of the national exchequer to keep the defence forces fully equipped with quality equipment to enable them to perform security functions effectively. Defence acquisitions are a multifaceted process involving a large number of disciplines; need for an overarching empowered authority to administer, coordinate, oversee, direct and control myriad acquisition activities is absolutely inescapable. Authority and accountability must go hand in hand.

In order to initiate remedial measures, it is essential to get at the bottom of all issues through diligent diagnostic study of the maladies. As the review committees appointed by the government lack necessary acumen and expertise to carry out a holistic and in-depth analysis of the system, they tend to look at procedural issues in a piece-meal manner. No expert committee has displayed courage to recommend radical reforms to put the system on track. Minor tinkering with a few provisions have produced no results.

Bureaucracy abhors change and dreads reforms. It thrives on status quo and looks at every new measure as a threat to its turf. Being the ultimate decision makers, the bureaucrats resist every well-intentioned move to revamp the regime. In the similar vein, despite numerous reviews, no major progressive measure has been incorporated in DPP since 2002. Self-seeking domain interests and egoistical attitudes act as the biggest stumbling blocks. Resultantly, the armed forces continue to suffer. Lack of courage to undertake radical overhaul of the regime has been the bane of the country. Requirement of inventive policy initiatives and concrete action plans can never be fulfilled by resorting to semantics and rhetoric. 

References

1. Indian Defence Procurement Procedure – 2016, available at https://mod.gov.in/defence-procurement-procedure
2. Major General Mrinal Suman, ‘Appraising Cost-Effectiveness of Offsets’ ,FORCE, vol 8, issue 4(2010).

3  Major General Mrinal Suman, ‘Impediments to the Modernisation of the Indian Defence Forces’, Indian Defence Review, vol 22, issue 1(2007).

4. ibid.
5. Major General Mrinal Suman, ‘Reforming the Acquisition Regime to Speed-up Defence Procurements’, Geopolitics, vol VIII, issue V(2017).
6. Indian Defence Procurement Procedure – 2016, available at https://mod.gov.in/defence-procurement-procedure
7. Major General Mrinal Suman, ‘Doing Business with the Indian Defence Regime: Challenges and Tribulations’, Indian Defence Review, vol 23, issue 1(Jan-Mar 2008).
8. US “Defence Acquisition Guidebook”, at http://www.defenseacquisition.com/wp-content/uploads/2010/07/defense-acquisition-guidebook.pdf . It provides detailed guidelines and commends best business practices to all functionaries involved in the acquisition system.
9. Major General Mrinal Suman, ‘Need for Defence and Aerospace Commission’, FORCE, vol 9, issue12 (2012).
10. ibid.
11. ibid.
12. Major General Mrinal Suman, ‘Defence offsets: has India benefited?’,Global Defence Offset Review, vol 4, issue 2(2015).
13. Major General Mrinal Suman, ‘Selection and Training of Acquisition Staff: a Neglected Aspect’, Global Defence Offsets Review, vol 4, issue 3(2015)
14. “Acquisition Operating Framework” at https://www.aof.mod.uk/index.htm It defines how UK conducts, governs and controls its defence acquisition work force and processes. It is a key enabler for improving delivery to the armed forces and for producing greater value for money for the taxpayer.

 

(Major General Mrinal Suman, AVSM, VSM, PhD, (Retd.) commanded an Engineer Regiment on the Siachen lacier and was the Task Force Commander for designing and sinking shafts for Pokhran II. He is a prolific writer and has published over 500 articles. He is considered India’s foremost expert in India’s defence procurement procedure and offsets.)

 

(This article is carried in the print edition of September-October 2018 issue of India Foundation Journal.)

“Keeping in view the increasing threat perception, which includes various occurrences of external strife and internal dissidence such as Doklam, increased external activities in Tibet over a year(sic), rampant cross border firing, militant activities etc., the current budget is not supportive to the inevitable needs of the Army ( Armed forces)…”

– Extract from the Report of the
Standing Committee of Parliament on Defence– March 20181

Introduction

Lamenting inadequate allocations for defence in the yearly budgets has become a permanent discourse in India and the sentiment is echoed by the armed forces and the Parliamentary Committees alike.2This is ironical in a country which is the fifth largest spender on defence, behind only US, China, Saudi Arabia and Russia3. India also has remained the top global importer of arms for nearly a decade4. Despite such large expenditure on arms imports all services continue to report inadequacies of arms, ammunitions and equipment, often referred to as ‘hollowness’. A logical deduction is that the process of planning capability development, acquisitions and   defence budgeting is functioning sub optimally and needs a serious overhaul. This analysis is not about reiterating inadequacies of budget allocations, in real terms or as a percentage of the GDP but about identifying and addressing the systemic- disconnect that exists in provisioning financially for desired national defence capabilities.

The System – As It Exists

From the perspective of those vested with the responsibility of  formulating budget allocations, allotment of Rs 2.95 lakh crore (USD 43.4 billion approximately) to defence,  in the year 2018-19, though only 1.58%  of the GDP,  constitutes 12.1% of the Central government’s total expenditure. In a developing country with competing demands, it seems, to them, to be a fair apportioning of meagre resources available. The allocation however is perceived to be inadequate from the perspective of those vested with the responsibility of securing India’s disputed borders in a challenging nuclear neighbourhood, maintaining internal security as well as by those assigned the responsibility of placing India, the USD 2.5 trillion5, sixth largest global economy at an appropriate pedestal of national power in the Indo-Pacific and globally. The complexity is compounded due to the nonexistence of a robust defence industrial base, creating which remains a work in progress! It is for reasons such as these that The Economist, in its March 28, 2018 edition chose to (obliquely) dub India as a ‘Paper Elephant’, an unenviable title6!

This dichotomy exists primarily because of the budget allocations being planned (or apportioned) at the bureaucratic level, in the Ministry of Finance, rather than by the Parliament, which would have the macro perspective. A simplistic solution would be to suggest scaling down of the 1.5 million third largest armed forces, coupled with reasonable increase in defence budget allocation. This will also seemingly correct the skewed Revenue: Capital budget ratios reduce pension burdens in the long run, spare more money for modernisation. Alas! Only if it was such a simple quick fix in a complex security environment!

The Dilemma of Planning and Budgeting for Defence

The Indian Armed forces have a well-structured system of perspective planning, wherein a 15 years Long Term Integrated Perspective Plan (LTIPP) is made for capacity building and capability development. The current LTIPP, under implementation is for the period 2012 – 2027. This plan is set in the backdrop of the prevailing security scenario and an analysis of the current & visualised threats. While LTIPP needs to factor in the National Security Strategy and the National Defence Strategy but on account of nonexistence of these documents, the services rely on the ‘Raksha Mantri’s (Defence Minister’s) Operational Directive’. The Perspective planning document (LTIPP) includes the capability development and acquisition plans of the three services and for infrastructure development. The document is prepared by the HQ Integrated Defence Staff, with inputs from the services and is approved by the Defence Acquisition Council (DAC), headed by the Raksha Mantri. Although, costing is carried out for all the schemes included and a chapter is included on financial planning, no budgetary support is assured for this plan at any stage, either by the Ministry of Defence, or by the Ministry of Finance. Drawing parallels, similar exercise in the US system is approved by the Congress and signed into law by the President, providing it the required sanctity and parliamentary commitment.

While from the perspective of services, it is a comprehensive document containing long term projection of their operational needs, to meet the current and visualised security challenges, for the planners at the national level, this is perceived to be a ‘wish list’. This disconnect is at the root of the entire problem of capability development of services, technology development by the DRDO/ industry and in creation of an indigenous defence industrial base. It needs to be appreciated that the  LTIPP forms the ‘mother document’ for formulating  capability development and force structuring plans of the services; while the LTTPP (Long Term Technology Perspective Plan) of DRDO and the TPCR (Technology Perspective and Capability Road Map) forms the base document on which the entire defence industry bases its planning.Its sanctity therefore needs to be maintained to keep the system robust.

For the services, any attempt to restrict the inclusion of schemes in LTIPP to likely budget allocations, would seriously undermine their ‘threat based’ capability development plans, in view of uncertain gestation period for maturing of procurement proposals. For the financial planners however, these projections remain un-supportable, financially. The impasse thus continues!

Further down in the process of defence planning, the 15 years LTIPP  includes within its ambit three five years defence plans (also referred to as SCAP – Services Capital Acquisition Plans). The current LTIPP, for instance, included the 12th, 13th and the 14th Defence Plans. The 12th Defence Plan coincided with the national Plan period and terminated in 2017. The 13th Defence Plan was formulated for the period 2017 – 2022 and the 14th was to cover the period 2022 – 2027, till these were done away with. Although, the 2016 directive of the Prime Minister, to the NITI Aayog to evolve ‘15 Years National Development Agenda’7, with subsets of 7 years strategy and 3 years action plan, to replace the five-years plan model had to include defence and internal security, the same is yet to be implemented in the planning process. Either way, whether it was the five year Defence plans or the visualised seven years strategy, even these, like the LTIPP, though approved by the DAC, remain un-aligned to the national budgeting process and no financial support is assured to the projects contained therein.

The draft 13th Defence Plan prepared by the services after a deliberate yearlong exercise, projected a requirement of Rs 26.84 lakh crore (USD 416 billion) for the armed forces for the period 2017-20228. These projections however still remain unapproved. Also, the defence budget allocations made for the years 2017-18 and 2018-19,  two of the five years of this plan period, seem to bear no relationship to the projections made.

The only step in the planning process that seems to work partially is the Annual Acquisition Plan (AAP), which is a two years roll-on plan drawn up on yearly basis. This tends to work because in practice, it translates to some acquisition schemes, maturing in the normal course, getting accommodated even within the meagre budget allocations received.

Besides the impediments in ‘Planning’, problems also exist in implementing the ‘Procurement Procedure’, further compounding the paradox of defence budget allocations. According to the revised Defence Procurement Procedure (DPP) – 2016, the capital acquisition process, post approval of the DAC should take approximately 74 to 114 weeks (under different scenarios of single / multi-vendor, with additional 12 weeks permitted where winter trials may be required to be carried out) 9. A period of one and a half to two and a half years to maturity is thus a realistic planning parameter. In practice however, not more than 30% acquisitions get completed in up to three years and there are instances of acquisition schemes getting prolonged to 8-10 years or even more. The uncertainty in the time likely to be taken for the scheme to mature results in the inability to realistically budget for it. An analysis of the e-books of MOD published in July 201610 and May 201811 suggests that there are likely to be over 300 DAC approved schemes (referred to as AONs – Acceptance of Necessity) valued at approximately 5 to 6 lakh crore (USD 73–88 billion) which are likely to be still in the pipeline, awaiting contract conclusion. Clearance of this back log is a `national problem’ of immense magnitude, for which the budget allocations need to be planned deliberately.

The dilemma of budgeting for defence can thus be summarised to identifying what to align the defence budget to? The schemes to be sanctioned by the DAC in the ensuing year?The schemes likely to mature during the financial year?To the prevailing critical operational voids? To the capabilities sought to be created for the future? In our inability to find an answer to this dilemma, we merely ‘Apportion’ whatever is considered appropriate from the overall financial resources available. This has been and would continue to remain the bane of our ‘hollowness’, lack of defence technological & industrial base and our inability to prepare for future wars.

Managing the Imbroglio and Getting Out of it

The inadequacies in the planning process and budget allocations, as stated above have resulted in inadequate force levels and capabilities to meet the perceived security challenges. There are reports of Army considering foreclosing the project for Battlefield Management System (BMS)12 to save Rs 5000 crore and putting on hold the raising of the additional Mountain (Strike) Corps13. Operational voids are also repeatedly highlighted by the Navy and the Air force. There is also a persistent criticism of large sums being utilised under the ‘Revenue head’, leaving little for capital acquisitions. Even within Capital budget, bulk of the resources get utilised for meeting ‘carry–over’ liabilities, leaving meagre amounts for new schemes.  There is thus a growing gap between the national aspirations and the capability of the armed forces.

Addressing this by systematic planning is well within the capabilities of the nation. Some measures towards giving a strategic sense of direction to capability development are:

• Identifying What We Need: The size and capability of the armed forces is a function of National Aim and National aspirations, taking cognisance of the prevailing security environment. These need to be defined in the National Security Strategy and the National Defence Strategy. Presumably, these basic policy documents are under formulation with the newly constituted Defence Planning Committee. In their absence an updated ‘Raksha Mantri’s’ operational directive’ should provide the requisite guidance, although with no mandate over the other ministries.
• Addressing a Two-Front, Multi-domain Threat: Disputed Northern and Western borders with China and Pakistan present a perpetual commitment of armed forces for preserving sovereignty and territorial integrity. These threats manifest primarily in terrestrial and maritime domain, presenting a two-front security challenge for which adequate force levels need to be created and maintained. Related capabilities also need to be created in other asymmetric warfare domains to effectively address the two front threat.
• Approach to Two- Front Threat: While preserving territorial integrity is a sine qua non, this threat, in the Indian context, can be addressed by adopting two alternative approaches. It can either be by pre-positioning (deploying) acclimatised troops along the LoC (Line of Control) in the West and LAC (Line of Actual Control) in the North, as being done hither to. This provides an advantage of having favourable force ratios at the point of application of force by the adversary and mitigates the possibility of any loss of territory (even temporarily/ tactically). This arrangement proved its utility during the Doklam standoff in 2017. On the flip side however, it entails maintaining higher overall force levels and resultant higher ‘Revenue Expenditure’ on pay, allowances, pensions and sustaining operational deployments. Alternatively, the responsibilities along two borders can also be fulfilled by maintaining centralised reserves and high level of inter theatre strategic mobility. This would entail procuring additional strategic mobility platforms like IL– 76 or C- 17 (through Capital Budget) and maintaining these (through Revenue Budget). This may also result in temporary loss of territory till the application of reserves. The advantages of reduced manpower and reduced pre- deployments would however accrue.  Choosing appropriate course of action and funding the manpower and equipment inherent in it has to be a national-call.
• Concept of Maritime Capability Development. India is considered to be the most significant maritime power in the Indo-Pacific. Countries of the region, US and other nations look at India to maintain a free and open Indian Ocean and rules based regional order. India needs to define its primary and secondary areas of interest and build its capabilities accordingly. The policy decisions of whether the desired area of influence remains confined up to the Straits of Malacca or extends to Western Pacific and  of how far does it extend in the Western and Southern Indian Ocean should be a function of how much capability  development and financial support can the country afford. Likewise, well deliberated policy decisions need to be taken on whether or not the country requires additional aircraft carrier(s) and to what extent do the island territories need to be developed as forward operating platforms.
• Development of Air Power: While 42 squadrons of combat aircraft is often stated as the optimum requirement for a two front war, it would be prudent to further analyse the requirement of platforms considered appropriate for the Northern and Western borders. The replacements for ageing Migs could well be a mix of single and twin engine aircraft, optimising on acquisition and operating costs. Also, the requirements of UAVs/ RPAs (remotely piloted aircraft) and helicopters, including attack / armed helicopters need to be optimised between the three services avoiding wasteful overlaps. The strategic mobility capability would need to be acquired according to the overall concept of two front war and regional responsibilities sought to be shouldered.
• Asymmetric Warfare Capability: Cyber, space, electronic warfare, information warfare and operations in other non-conventional domains have become an integral part of warfare. Capabilities need to be developed in these domains, without the luxury of reducing capability substantially in other spheres, at least in the Indian context. This entails preparing simultaneously for the second to fifth generation warfare.14

Generations of Warfare

• The essential overlap and induction of technology at a pace comfortable to the Indian soldiers need to be considered for capability development and budget allocations.
• Border Infrastructure Development: Development of infrastructure – roads, air fields/ helipads, strategic railways, ammunition storage, habitat constitute an essential part of the capability development and need to be budgeted for since all force developments would come to a naught in the absence of the ability to apply these effectively.

A consideration of the above mentioned factors would enable us to carry out a comparative ‘threat’ and ‘capability’ audit and identify the voids that need to be provisioned for, financially.  The pace of capability development and realisation of national aspirations would thereafter be a function of the pace and quantum of allocation of funds. A fundamental understanding of this imperative would be the first step towards getting out of this imbroglio.

Optimising Defence Budget Allocation – Beyond the 3% Solution

The budget allocation of 1.6% of the GDP (approximately) to defence seems inadequate for the size of forces that India maintains and for the aspirations that it nurtures. There is however no conclusive ‘alternative figure’, which, if allotted consistently over a few years would enable the desired force structuring and capability to be achieved. It would thus be appropriate to define parameters on which the defence budget allocations could be worked out year on year rather than one side justifying current allocations and the other insisting on allocation of 3% of GDP, with both sides being bereft of concrete logic.

One possible way could be to collate the value of the old schemes that have reached the   Competent Financial Authority (CFA) approval stage – final stage of approval for acquisition) or advanced CNC stage (Cost Negotiation Committee stage- the penultimate stage of approval), since there would be a likelihood of these maturing in the ensuing financial year. Add to this the cost of most critical new acquisitions that must materialise during the year, to fill operational voids. The total cash outgo for this consolidated amount (approximately 15% of the value) should then be added to the existing carry over liabilities to arrive at the desired Capital budget allocation for acquisitions. Estimated requirements for infrastructure development and works would also need to be added thereafter. This process of determining Capital budget may continue till the existing backlog of DAC approved schemes is cleared. Thereafter, the approvals by the DAC must be prioritised and supported by firm budget allocations, modalities for which would need to be worked out. For the Revenue expenditure, adequate funding must be calculated to sustain the size of the respective Service approved on considerations given earlier in this paper. This should cater for the cost of the personnel and maintenance & upkeep of the in-service weapons and equipment. Determining levels of ‘War Wastage Reserves (WWR)’ is a function of the national policy on how many days of war to prepare for. Appropriate funding for these reserves would need to be planned on recurring basis, to cater for the wastages, past their respective shelf – life.

Having approved the basic planning parameters and the force levels to be maintained, the onus of maintaining optimum Capital: Revenue budget ratios must thereafter rest on those making budget allocations and not the services.

In the context of defence Capital budget, to make allowance for the delays due to impondera-bles in the acquisition process (delays in conclusion of user trials, general staff evaluation, deliberations on transfer of technology, cost negotiations etc) the Standing Committee on Defence has in the past recommended allotting Capital budget as ‘non-lapsable’ and ‘roll-on’ budget. While MOD has, after years of reluctance, agreed in December 2016 to the creation of ‘Non-Lapsable Defence Capital Modernisation Fund’, the Ministry of Finance continues to oppose this claiming it to be violative of Article 266 (1) of the Constitution15. This perception needs to be shed and the idea needs to be experimented with, even by seeking necessary amendments to existing regulations, if required. Not aligning the defence budget to proposed acquisitions, as stated earlier, will not only impede all efforts at building capable armed forces, it will also impede indigenisation and creation of defence industrial base.

It is well appreciated that even the most advanced economies cannot afford to fund the entire defence and security requirements and that these need to be prioritised. This needs to be a coordinated exercise between the national leadership and the services and within the services themselves.  The UK Joint Concept Note 1/17 on Future Force Concept16 suggests categorisation of force (for evolving concepts and allocation of resources) to: Current force (5 years planning), Funded Force (10 years), Future Force (10–20 years) and Conceptual Force (30 years planning).  A similar exercise in the Indian context would help determine the prioritised budgeting requirements for sustaining current equipment, funding for design & development of future inductions and for funding defence industry.  Likewise, the yearly National Defence Authorisation Act (NDAA) passed by the US is an exhaustive defence planning and budgeting exercise and needs to be studied to reform our own system. Approval of LTIPP and five / seven year defence plans by the CCS (Cabinet Committee on Security) merits consideration to accord this process necessary sanctity and budgetary support.

Alignment of defence budgets to GDP is a yardstick used by external agencies like SIPRI to estimate the proportionate national resources being allotted for defence and assess potential military capability. This yardstick is also used by the US and NATO to set targets of defence spending for member nations. Adding pensions to defence budget, as done by UK since 2014 was to meet the NATO targets of 2% spending on defence and was considered to be a ‘smoke screen’ for capability cuts. China on the other hand rarely declares its entire defence spending! It would thus do well for us not to be overly concerned with the figures indicated in relation to the GDP but to logically address the nation’s particular needs, irrespective of the percentages it translates into.

Conclusion

Budget allocations for defence are not about ‘budgeting’ alone! A country’s defence spending is generally considered as a measure of its ‘potential military capability’ and of the relative importance of its armed forces with other organs of the state. However, no matter how much a country spends on military, it still has to find ways to “translate its potential capability into power”17For a leading power and a growing economy like India, the national security strategy should shape defence spending and the defence spending, in turn, should shape the security strategy. This relationship however remains dysfunctional and needs to be corrected. An inconsistent defence budget allocation puts the entire process of perspective planning to noughts. It also has a snowballing effect on capability of armed forces, technology development and on establishment of indigenous defence industrial base. It is thus an issue of national concern which needs to be addressed with utmost seriousness.

References:

1     41 st Report on ‘Demands for Grants of the Ministry of Defence for the year 2018-19 on Army, Navy, and Air Force (Demand No. 20). 13 March, 2018. Pg 3.

       164.100.47.193/…/Press%20Release%20-20Army,%20Navy,%20Air%20Force.doc.

2     Ibid. Estimates Committee Report Summary: Preparedness of Armed Forces – Defence Production and Procurement

       http://www.prsindia.org/parliamenttrack/report-summaries/estimates-committee-report-summary-preparedness-of-armed-forces-defence-production-and-procurement-5332/

3     The Economist. ‘Paper Elephant : India spends a fortune on defence and gets poor value for money’.

       March 28, 2018. https://www.economist.com/asia/2018/03/28/india-spends-a-fortune-on-defence-and-gets-poor-value-for-money

4     SIPRI Fact Sheet  March 2018. Trends  in International  Arms  Transfers. https://www.sipri.org/sites/default/files/2018-03/fssipri_at2017_0.pdf

5     Srivastva Ajay. How India Can Become a $ 5 trillion Economy. Business Line.  The GDP stated is at Current Price. https://www.thehindubusinessline.com/opinion/columns/ajay-srivastav/how-india-can-become-a-5-trillion-economy/article23562940.ece

6     Op cit. The Economist.

7     The Economic Times. May 13, 2016. https://economictimes.indiatimes.com/news/economy/policy/15-year-development-agenda-to-replace-five-year-plans-to-include-internal-security-defence/articleshow/52247186.cms

8     The Times of India. https://timesofindia.indiatimes.com/india/forces-seek-rs-27-lakh-crore-over-next-5-years-for-defence-projects/articleshow/59613786.cms

9     Defence Procurement  Procedure (DPP)  for  Capital Procurement 2016. Annexure 1 to Appendix C of Chapter 1. Pp 53 – 54.

10  MOD E Book, July 2016. Pg 7. https://mod.gov.in/e-book.  

11  MOD E Book May 2018. Pg 13. https://mod.gov.in/ebook-2018/mod-ebook.html#p=1

12  Shukla Ajai. If our army wants to avoid the fate of Saddam’s army… .Rediff.com. December 27, 2017. http://www.rediff.com/news/special/if-our-army-wants-to-avoid-the-fate-of-saddams-army/20171227.htm

       Katoch PC. Foreclosure of Army’s Battlefield Management System.MAI – Military Aerospace Internal Security. January 10, 2018. http://www.spsmai.com/experts-speak/?id=482&q=Foreclosure-of-Army-s-Battlefield-Management-System

13  Dutta Sujan. Indian Army puts Mountain Strike Corps aimed at China in cold storage. The Print. July 12, 2018. https://theprint.in/security/indian-army-puts-mountain-strike-corps-aimed-at-china-in-cold-storage/82319/

14  Generations of Warfare

• Second Generation Warfare:. Primarily, attrition warfare developed by the French Army, during and after, World War I. It emphasises on coordinated employment of infantry, tanks and artillery  and on application of mass firepower, primarily  indirect artillery. This is the primary pattern of defence along LC and LAC in the Indian context.
• Third Generation Warfare:. Non linear manoeuvre warfare, as against second generation, attrition warfare. Adopted primarily on our Western borders in desert and semi desert terrain.
• Fourth Generation Warfare: Absence of monopoly of state as prosecutor of war. Use of non- state actors as instruments of war, in concert with or independent of the state forces. Religion and ideology, as against a nation may be the unifying glue for these combatants. Terrorism is used as a tool of warfare and the targets are not soldiers alone, even the civilian population is considered to be a legitimate target. Nature of war being waged by Pakistan against India.
• Fifth Generation Warfare. High technology, non- contact war. Incorporates elements of network centric, multi domain (land, air, sea, cyber, space), fusion warfare.

15  Standing Committee on Defence (2017-2018), (Sixteen Lok Sabha) Ministry of Defence Demands for Grants  (2018-19), Capital Outlay on Defence Services, Procurement Policy and Defence Planning (Demand No. 21). Forty Second Report. March 2018. Paras 1.23 – 1.25.Pp 20- 21.http://164.100.47.193/lsscommittee/Defence/16_Defence_42.pdf

16  UK Ministry of Defence.  Joint Concept Note 1/17: Future Force Concept. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/643061/concepts_uk_future_force_concept_jcn_1_17.pdf

17           China Power project. CSIS. What does China really spend on its military? https://chinapower.csis.org/military-spending/

 

(Lt Gen Anil Ahuja (Retd) is a former Deputy Chief of the HQ Integrated Defence Staff who was responsible for Policy Planning and Force Development.)

 

(This article is carried in the print edition of September-October 2018 issue of India Foundation Journal.)

Crystal Ball: The Two New Defence Industrial Corridors

Executive Summary
India’s defence manufacturing industry has reached an inflection point and very large scale change is on the way. The Government of India has now decided to construct two large Defence Industrial Corridors (DICs) one in Uttar Pradesh’s Bundelkhand region and the second along the Chennai–Bangalore stretch. A sum of Rs 40,000 crore has been committed in the February 2018 Union budget to be invested in these corridors with Rs 20,000 crore allocated to each corridor.
Within this new defence corridor platform, Indian companies will, over the next 10 years, re-imagine and re-build the country’s defence industrial base using new business models and collaborative operating models that will enable the nation to achieve a quantum jump in military equipment production.
Private Companies and the Defence PSUs / DRDO will also develop new collaborative models that maximise the use of existing infrastructure in ways that will surprise. It is therefore, definitely going to be a far more active industry.
Developing advanced military technologies in India will require business model innovation and operating model innovation and asset light configurations that maximise the knowledge element within the defence manufacturing business. This is not just about import substitution and saving USD 200 billion in foreign exchange over the next 10-15 years by producing military equipment locally. We will also begin thinking in terms of leapfrogging technologies and move to next generation Artificial Intelligence based weapon systems by re-imagining conflict itself and develop systems that are suited to the new types of security challenges that we are likely to face.
The article below is a strategic designers view on the future. It explores new ideas that could transform India’s Defence Industry base by introducing a range of concepts such as deploying Design Thinking and fast prototyping in New Weapons development to re-configuration and re-wiring existing infrastructure to create an advanced Defence Industrial ecosystem in India over the next 10 years. All of this technological change will provide our military with the weapons to eliminate any threat to our security in any part of the world or outer Space by 2035.
Introduction
In early 2014, when I visited Pragati Maidan for DEFEXPO, it was immediately evident to me that the industry needed new paradigm changing ideas that could replace the inefficient Defence PSUs/DRDO and eliminate the touts and dealers who represented foreign defence contractor interests in India.
Within two hours of entering the DEFEXPO venue, I had started sketching on the pamphlets I had gathered at the EXPO and soon I had a schematic design sketched out for what would later become the Defence Industrial Corridor Project.
It may interest readers to know that when I had first thought about it, I had called it the Defence Economic Zone (DEZ) project.
I showed my rough sketches to Mr. Ratan Tata, whom I accosted outside the Raytheon stall as he emerged from a meeting there. Mr. Tata very quickly understood what I was saying (About Industry Structure and the need for a Defence Economic Zone). He gave me his card with the instruction that the project be sent to him once I had written it. Four months later I did, as he had bid me to do and I did receive a very nice thank you note from him.
The crucial investment decision by the Government of India happened a year later in May 2015 when I met Mr. Manohar Parrikar, the then defence minister. He was very supportive of the project and pushed it within the Government. It was with his initial support that the project got an investment commitment of Rs 40,000 crore from the Government of India in the February 2018 union budget.
Separately, pilots from the Indian Air Force helped identify the Bundelkhand region in Uttar Pradesh as a possible location for the Defence Corridor. As the designer, I wanted to inject an advanced military project into the most under-developed region of Uttar Pradesh and had asked my friends in the air force to identify a location. Once they came back with Bundelkhand, all that was needed was a helping hand from Mrs. Meenakshi Lekhi (BJP MP) to give a final push to the project by speaking about it in Parliament. Many more discussions took place within the government before the Prime Minister announced the Bundelkhand defence industrial corridor. The Chennai–Bangalore corridor was chosen separately.
Designers Brief – Need for an Alexandrian Solution
It all starts with a design brief and so in March 2014, I asked myself a simple question, “What can we possibly do, so that India (a newcomer in the world’s weapons Industry) could become a leader, by changing the structure of the industry if necessary?
Firstly, it was clear that the Defence industry in India (in 2014) lacked an over-arching concept that could put industry players into project mode. That was the first challenge.
Secondly, the designed solution had to be large enough and innovative enough to overcome the massive inertia within Defence PSUs and DRDO and vested interests in the Arms lobbies and their political networks.
In fact, what was required was an Alexandrian solution if we were to attempt an indigenisation of 75 % – 80 % of defence equipment production by 2030 thereby saving USD 200 billion in foreign exchange. It may be recalled that in 333 BCE, Alexander while wintering in Gordium had attempted to untie the knot which held an ox-cart to a post within the palace of the former kings of Phrygia. When he could not find the end to the knot to unbind it, he sliced it in half with a stroke of his sword, producing the required ends (the so called “Alexandrian Solution”).
The other factors that went into the design exercise were, firstly, the need to create a large number of jobs and secondly, the need to create an innovation ecosystem in the country by designing a structure for it.
The defence industries cluster design which emerged from this thinking had the following deliverables on the Macro Economic front:
(a) Macro Project Benefits
(b) Project Design Reference Frame
(c) Enabling Asset Light Business Models
(d) Revenue Potential – Ballpark Estimates
(e) Strategic Innovation Framework
(a) Macro Project Benefits
1. The two Defence Industrial Corridor projects, together had to save India USD 200 billion in Foreign Exchange over the next 10 years.
2. New job creation on account of the two projects had to be of the order of 5,00,000 jobs in hi-tech defence manufacturing and allied industries.
3. The largest benefit of the project however is the creation of a National Innovation Backbone Infrastructure and the creation of nearly 5,000 small yet highly specialised vendor companies with a strength of just 20-40 employees each which will form the backbone of India’s High-Tech manufacturing ecosystem in line with the Mittelstand (mid – sized company) model that exists in Baden-Wurttemberg in Germany.
(b) Project Design Reference Frame
It has to be remembered that India is at a critical stage in its development. For instance, the Defence Industrial Corridor has been conceived at a time when India is revving up, to take a Giant leap, to triple the size of the economy from USD 2.5 trillion in 2018 to USD 7.5 trillion by 2032 at a projected GDP growth rate of 8.75 %.
Given the shortage of private capital for strategic national investments it was necessary for the Government to create an initial enabling ecosystem by providing a sound regulatory environment on the one hand while also investing in the creation of basic infrastructure such as roads, power transmission and distribution facilities, military equipment testing facilities, airstrips etc.
The Government has now rightly decided to invest Rs 20,000 crore in the creation of this basic infrastructure in each DIC, to set the ball rolling and to catalyse private sector investment.
All of this Government investment will help the private sector to set up their facilities at reduced cost and help them achieve an earlier break-even on their investments.
(c) Enabling Asset Light Business Models
The Defence Industrial Corridors as per the original design, have been structured in a manner that allows for various Business Plans and Monetisation strategies, depending on how individual companies want to participate in the project.
Each Defence Manufacturing Corridor will accommodate several large defence Contractors (i.e. Anchor participants) and around 2500 smaller vendor companies. There are also three broad categories: Land Systems, Naval systems and Air Defence, in which both Indian and foreign defence contractors and companies can participate.
The project has been specifically designed to accommodate a large variety of Business Models that can be deployed in a plug and play fashion depending on the risk – return profile of potential investors.
Asset Light business models can be designed and structured to allow companies to keep upfront capital costs low while maximising their long term returns in the form of a dominant long term presence in the Defence corridor and the Defence Knowledge Network which is a critical aspect of this project.
The most profitable business models will be those which are designed as knowledge plays. These business models will be sophisticated, asset light and will take maximum advantage of the network and the collaborative opportunities provided by the Defence Cluster which is what the Corridor represents.
Secondly, setting up the Corridor is actually a large Negotiation and the Innovation lies in the way the Negotiation is organised and executed.
Within this, the design of the Knowledge network is a critical aspect as it effects how companies collaborate in one area while they compete in other areas so as to reduce their common costs while maximising their revenues.
It may interest readers to know that the collaborative model for the DIC project came from “Project Deep Star” which is a collaborative technology development model in the deepwater Gulf of Mexico by companies such as Chevron, Shell and others.
(d) Revenue Potential – Ballpark Estimates
For potential participants and investors in the Bundelkhand and Chennai–Bangalore corridors, the revenue projections are critical from a business perspective. The potential revenue numbers for each of these is as follows:
1. Defence Offset based revenue (alone) : USD 5.0 billion / year
2. DPP Quota based * : USD 5.0 billion / year
3. Defence Engineering : USD 4.5 billion / year
4. Components & Spare Parts : USD 7.5 billion / year
Total : USD 22 billion / year
* DPP Quotas [Buy (Indian) and Make and Buy and Make]
How companies in the corridor achieve these numbers depends on how they plan and operate their business models.
Each Defence Manufacturing Corridor therefore represents a potential revenue opportunity of USD 22 Billion each year for participants depending on whether the Govt. also includes conditions for preferential procurement from factories located within the corridors.
Companies will need to decide whether they should focus their efforts on the Bundelkhand Corridor or in the Chennai-Bengaluru corridor or both. Therefore how a company designs its Business model will also be a critical determinant of how much of the USD 44 billion / year in revenue (for both corridors) they will be able to capture for themselves and their business partners.
Business Model design is therefore a critical determinant of success.
Readers may please note that the USD 44 billion / year number forecast as the potential size of the Indian Defence Equipment and Services market (circa 2025) is real as India’s economy is getting set up to double in size by 2025 and then triple in size over 2018 levels by 2032 and the national defence budgets will only get larger as we expand and modernise our armed forces.

(e) Strategic Innovation Framework
An essential part of the DICs design is its Innovation framework that had to be self-sustaining. The Defence Manufacturing Corridors have therefore been conceptualised as industrial clusters based on the diamond model developed by Professor Michael E. Porter of Harvard University.
Specifically, the approach is to provide the necessary infrastructure and a policy framework that encourages unprecedented innovation in defence technologies. Such industry specific clusters are found in Baden-Württembergin Germany (Precision Machinery), Boston in the United States (Biotechnology) and Florence in Italy (Leather industry). Professors Michael Porter and Scott Stern found that the striking innovative output of Israeli firms is due, not just to more effective technology management, but also to Israel’s favourable environment for innovation, including strong university-industry linkages and a large pool of highly trained scientists and engineers.

The Defence Industrial Corridors (DICs) are therefore designed to apply these concepts by bringing together a number of large Indian companies and their foreign joint venture partners in a vertically integrated structure comprising of nearly 2500 vendors and small scale industries within each corridor . The foreign holdings in the JVs will vary between 49 % and higher depending on the technology area and other factors.

Michael Porter Four Forces Model

This vertically integrated structure and its numerous players will then develop deep linkages with a large number of IIT / University departments offering degree courses in Inter-disciplinary defence engineering related disciplines.
In fact each DIC will have a designated IIT or group of IITs as partners who will together set up 6 IIT Research departments and start Inter-disciplinary courses that will admit its first batch of 500 inter-disciplinary Military Technology Graduates by 2021. This first batch will graduate by 2025-26 and be immediately deployed within the companies setting up facilities within the DICs.
This diverse group from industry and academia will in turn interact with Government representatives and actual users from the Armed Forces (Army, Navy and Air force) to design and develop new defence technology and most importantly work to adapt advanced technologies from foreign sources to make new weapons with next generation technologies including Artificial Intelligence in India.
IIT Kanpur is the designated technology partner for the Bundelkhand DIC and IIT Chennai is the technology partner for the Chennai- Bangalore corridor.
Using Design Thinking to Create New Weapon Systems
The Defence Industrial Corridors and the ecosystem that they create will bring the latest ideas in Design to new weapons development. Design Thinking is user centric in nature. All major defence contractors around the world depend on design thinking in the development of New weapon systems and new weapons. The DIC’s have been designed to incorporate these ideas.
The following international defence contractors use design thinking to bring un-precedented innovation to weapons design:
1. Lockheed Martin
2. Raytheon
3. Boeing
4. Rolls Royce
5. United Technologies
6. Thales
7. Northrop Grumman
8. US Department of Defence
The IIT Technology partners in each DIC will help each of the Companies setting up facilities within the corridor to start their own design thinking cells.
These will be dynamic brainstorming units which will rapidly prototype and test new and innovative ideas for components and weapon systems.

Engineering units from the Army, Navy and Airforce will set up an joint inter-disciplinary command in each DIC where serving military engineers and actual users of the equipment (field regiment personnel for instance or special forces) will be consulted while developing the designs of new weapons.

Weapon design Workshop in progress involving both Special forces personnel and Military Scientists

Special weapon testing units from the Armed forces staffed with actual users (Artillery or Missile unit personnel for instance) will be set up in both the Bundelkhand and the Chennai–Bangalore corridors and they will work directly with private companies to develop new weapon systems.

US Military Engineers and Special forces troops provide “Actual User “ inputs to scientists and weapon designers from private companies to test a New bomb disposal Robot that uses Artificial Intelligence

Software companies will also set up units within the Defence Corridors to develop dual use software and artificial intelligence (AI) applications for the Indian Military.
Employing Foreign Military Scientists Within the Defence Corridors
Soon after the collapse of the Soviet Union, the Chinese Government moved fast and hired over 5000 Russian military scientists who were without work. The hiring of these 5000 Russian experts led to massive advances in the development of the Chinese military machine and China’s technology base. China has gained immensely from employing Russian experts in areas such as advanced avionics, material science and most importantly metallurgy.
It would therefore be a good idea for the Government of India to allow Indian companies to employ foreign experts in areas such as metallurgy to begin with and then move on to other areas as we get more used to deploying this strategy. Today no Indian company has some of the more advanced knowledge in the areas of Material Science and especially in the area of Military alloys. Retired military scientists from Russia and Eastern Europe as well as the United States represent huge promise. All roadblocks towards hiring of foreigners and foreign military scientists should therefore be removed.

The Innovation is in the Contracts, Not in the Technology
Setting up a successful Defence Industrial Corridor is actually a large negotiation and the innovation is in the contracts, not necessarily in the technology. There is also huge potential to think about New Business Models that capture and retain value for companies setting up units in the Defence Industrial Corridors.
Conclusion
The two Defence Industrial Corridors will employ 2,50,000 people each and transform the Industrial landscape in the state of Uttar Pradesh and along the Chennai–Bangalore corridor.
Technologically, they represent a huge technology leap for India. All of this is possible if we as a country focus more on the value that can be added by good Design.

(Ashish Puntambekar is the designer of the Defence Industrial Corridor project which has received an investment commitment of Rs40,000 crore from the Indian Government. His original concept was presented to Shri Manohar Parrikar, the then Defence Minister in May 2015. This paper is a revised version of the author’s original concept. Views expressed are personal.)

(This article is carried in the print edition of September-October 2018 issue of India Foundation Journal.)

Introduction

India’s Armed Forces are among the largest in the world. They embody the will of the Indian people. In return, their high morale and cohesion provide a sense of well-being and confidence to the masses. What has significantly changed in this relationship is the nature of the mission, which now includes growing domestic security, safety and administrative responsibilities. The fallout includes greater public visibility and scrutiny. Mission success under these conditions demands sustained support from the masses. Consequently, public perception has become a critical factor in military planning and operations.

Paradoxically, public perception is becoming increasingly hard to cultivate, in spite of latent goodwill and faith reposed in the Armed Forces. Perceptions today are also liable to change within a blink of an eye, given the speed at which content propagates within a susceptible, angst-ridden society. The Indian Armed Forces are especially vulnerable, given the traditionally restricted scope of civil-military dialogue. This is aggravated by limitations in scope and thought, obsolescence in practice, and a centralised, top-down, unwieldy, at-arms-length approach to public relations. The inability to stay abreast of, and optimally leverage optimal social engagement methods is preventing the Armed Forces’ narrative from becoming accessible to a larger audience, which is routinely exposed to a disproportional amount of negative commentary on social media. This is adversely affecting the military’s image and gradually eroding its brand image.

Social media engagement is undoubtedly the biggest influencer of public perception today and will be a focus of this piece, since the potential for brand enhancement is immense. The social media success of India’s paramilitary organisations, Law Enforcement Agencies (LEAs) and select examples from other Armed Forces signifies the potential gains that may be achieved, based on better ‘design’ of content, a robust PR ‘structure’ empowered with speed of trust across the hierarchy, and healthier ‘interaction’ with the masses.

The Indian Armed Forces’ Social Media Score Card: Untested Assumptions, Misguided Efforts

The Indian Army, the Indian Air Force (IAF) and the Indian Navy manage social media channels, largely showcasing promotional activity, inputs about visits, exercises, appointments, community support activities and trivia about past battles and military heroes. Focusing primarily on events and activities, they rarely communicate the vision, mission and ideas of the organisation, assuming that the audience will figure this out on their own. This failing could be due to an inability to understand the target audience, or an unwillingness to address their expectations, instrumental in most perception management failures. These issues, their impact and possible solutions are discussed below by first focusing on ‘design and treatment’ of content – an execution-related issue, and then moving on strategy and planning.

Quality of Recruitment and the Inefficacy of Promotional Videos

The Indian Armed Forces suffer from a perennial staffing problem, unable to attract the right quality of talent in spite of changes in terms of service or huge spends on promotional activities. Considering that the Armed Forces offer decent pay, perks, privileges, as well as intangible benefits like job security and respectability, doubts about better opportunities elsewhere leading to a shortfall in talent are not fully merited, given the one lakh plus average, trainable, high integrity individuals entering the work force every month. But what if we are unknowingly targeting only a narrow pool of talent in the first place?

Presently, social media promotional activities revolve around motivational videos and eye-catching advertisements with a call for action around key themes like adventure, physical exhilaration, high technology and challenging leadership avenues. This has two problems. First, it indicates that the profession is only suitable for adrenalin junkies, weeding out the majority from the candidate pool. Secondly, by focusing 80% of promotional content on 10% of actual roles / tasks, it sets incorrect expectations in the minds of a candidate. Since one can’t leave the Armed Forces at will, this gets passed on to a disillusioned candidate pool who opt not to take a chance. The other lacuna with promotional activity is that the branding is designed as per the ‘insider’s view of what a potential recruit will get swayed by’, which is validated by the steady stream of ‘self-aggrandisement’ themed promotional activity over the decades. There are three suggestions to improve this activity:

(i) Appealing to a mass audience: Consider the universal, time-tested expectations of job-seekers. These include self-esteem, advancement, feedback, public adulation, up-skilling, etc1. All these attributes can be realised at an Armed Forces desk as effectively as on a high-adrenalin field assignment. A predominant focus on high-energy, action-oriented messaging weeds out a larger pool of potential candidates, who may have preferred a less action-oriented career. Importantly, in a society where parents play a major part in career decisions, promotion activity focused on the job seeker solely has the disadvantage of playing up risks vis-à-vis benefits from the parents’ perspective, further narrowing the talent pool. In trying to project an Armed Forces career as an attractive differentiator vis-à-vis other professions, there exists a risk of alienating the public, a majority of whom are seeking job security and stability.

(ii) Including contemporary concerns into the narrative to cater to an entirely new audience set: Millennials prefer individual attention over social approval, and tend to seek out a career that matches unique lifestyle expectations2. Instead of a value proposition focused on patriotism, pride, valour, and courage, promotional messaging could be made more relevant by focusing on sustainability, freedom of expression and other hooks of national purpose, beyond security. While it is not recommended to lift and shift campaigns from another culture, a military recruitment campaign from Norway could be a good pointer, which reflects national values and purpose without a single direct reference to military roles and tasks3. Similarly, non-traditional aspirations relevant to the target audience could be integrated within promotional campaigns.

(iii) Infusing fresh language and a wider range of emotions: Moving beyond the use of heavy emotions, messaging could reflect an element of ‘fun-in-adventure’. Fresh college and school graduates, while aspiring to a life of great deeds and sacrifices in uniform, also tend to associate the profession with a life of perpetual seriousness. A training academy video from the USAF is informative in this regard, significant in that it carries risky content, done in a fun and matter-of-fact manner. In contrast to paratroopers breaking into a sweat before a jump, a clip of young trainees jumping off planes without batting an eyelid makes the larger-than-life become achievable4.

The point being made is that we need to sell reality, and provide hooks relevant to the present generation. If the hooks don’t work, it may mean that we are portraying a wrong reality – of the job being all action, loaded with heavy emotions, and markedly different from a nine to five lifestyle.

A detailed assessment of promotional activities and recruitment messaging may also help the Armed Forces reinvent themselves. The successful ‘walk-the-talk’ by the IAF with regards to its ‘women power’ campaign opened up opportunities for an entire demography, and enhanced the credibility of its engagement efforts. This is critical, because no amount of appealing content will sway today’s youth if there exists a marked difference between values exhorted and actions / conduct on ground. It can be safely assumed that every candidate and their parent will scrutinise Armed Forces’ activities carefully. In this context, sustaining the larger narrative will remain critical.

Social engagement, because everyone else is doing it: The Armed Forces’ social media handles have a healthy followership, upwards of a few million in the Indian Army’s case. But a major reason for this is the nation’s latent support for the men in uniform – a well-wisher premium. This number does not reflect the popularity enjoyed by other social media influencers, a main reason being that these handles are not able to establish a unique identity. They largely replicate official content or post commemorative content which is also shared by other social media pages and individuals. In following this process, the Armed Forces fail to appreciate the stark difference in engagement objectives, criteria, audience types, etc. between the official and online engagement mediums, one of which is to constantly hone engagement based on audience ‘feedback’, the ability to hear, interpret and refine engagement.

A social engagement strategy must have clarity about the strategic purpose of engagement, and unique call to action. These could be fundamental perception building queries like – what do citizens think of the Armed Forces?, who are its major supporters / detractors and why?, and, is there a changing trend in the public’s perception of the Armed Forces?, etc. all of which boil down to an important question – how relevant are the Armed Forces to India’s public today? A few thousand likes, shares or mentions are by themselves no indicators of any of these queries.

Law Enforcement Agencies (LEAs) across India provide a good example of online community engagement, in spite of traditional structural and social handicaps. They too have to work around tightly controlled and centralised communication protocols. Moreover, as a public service dealing with law and order, their relations with society have traditionally bordered on fear, hostility and even anger. From their humour-infused and empathetic interactions, it is clear that an important ‘strategic imperative’ was to mitigate their ‘confrontationist’ dynamic with the public. Their focus on reassurance and their receptivity to inputs from the public has been instrumental in unearthing issues, building confidence and encouraging positive community relations. In addition, by generating objective debates around constructive topics like safety and well-being, they are able to avoid politicising the narrative, weed out extreme opinions, and still generate healthy participation and support from the masses.

Twitter Handle (A)	Account setup date (B)	No. of Tweets (as on 30 Jul 2018) (C)	Followers   (D)	Likes by the page (E) Engagement factor E = C/E
Bengaluru Police	Aug 2012	75,700 (1,066 per month)	1.24 Million (Mn)	12,600 E=6
Mumbai Police	Dec 2015	69,600 2,245 per month)	4.62 Mn	2,236 E=31
Indian Army	Feb 2013	7,555 (113 per month)	5.59 Mn	63 E=120
Indian Air Force	Oct 2016	1,394 (66 per month)	173,000	122 E=11
Indian Navy	Jun 2016	6,335 (253 per month)	99,000	255 E=25
BSF	Mar 2015	2,907 (72 per month)	200,000	1909 E=1.5
CRPF	Jul 2016	5,454 (227 per month)	196,000	7373 E=0.7

 

*The per month figures above do not reflect actuals, but denote an average over the handle’s existence. What distinguishes the Armed Forces /Paramilitary forces from the LEAs in the above graphic are the frequency of their tweets. Since military/paramilitary forces do not have a direct public interface in their daily working, this is understandable. But as public scrutiny increases, and as they begin to earn greater mindshare among the population, their number of interactions (number of tweets, for example) should ideally increase.

*Engagement Factor (E): indicates the handles’ liking of other content (their external engagement on Twitter) relative to their own broadcasts. BSF and CRPF have fewer number of overall tweets, comparable to the Armed Forces, but have substantial followership, which can be partially attributed to their engagement factor of 1.5 and 0.7. Such engagement makes an handle seem opinionated but also accessible. This could be a reason for their relative popularity, compared to the Indian Air Force or the Indian Navy.

As public interface and the public’s mindshare increases with respect to military matters, greater amount of social media interaction focused on sharing relevant content and addressing concerns. Only then can we expect to credibly provide the necessary ‘context’ about military life, roles and operations to an audience that is likely to benefit from better quality awareness and knowledge. The ideal social engagement strategy will straddle the two halves between restraining opinion and sharing profusely, with the ideal balance arrived at by focusing on the larger strategic queries posed above, and refining the strategy periodically. Thus, a healthy civil-military dialogue would require the Armed Forces to take charge of the narrative, in contrast to their present day passive approach.

Surrendering the Narrative: Today, the Armed Forces’ external communication activity is ‘awareness’ oriented. This, however, is not sufficient to change perceptions. With multiple sources and conflicting opinions populating the national discourse, attention spans are getting severely constrained, encouraging snap judgments based not on objectivity, but emotions and sentimental appeal. Managing reputation under this reality requires sustained, constructive engagement, with a built-in ability to respond in near-real time to damaging / defamatory content. Failure to institutionalise this will result in a slow erosion of reputation and brand of the Armed Forces built over centuries and after countless sacrifices.

This is all the more pressing, given that a minority opinion wielding a false counter-point can, even unwittingly bring disrepute to the Armed Forces. A recent example of this includes an op-ed by an Indian US based journalist, on Pakistan’s election outcome. His contention was that for an Imran Khan-like figure to rise politically in India, he won’t be able to rely on the army to help him gain top office, since Indian generals would be busy playing golf, rather than playing politics5. Inserting comments totally irrelevant to the argument and taken out of context is how spoilers claim glory by insinuating organisations which have limited capacity for recourse.

Even veterans of high repute resort to public bashing of the Armed Forces. Lt. Gen. Panag’s media trial about a sub-judice matter involving a serving officer reflects the kind of reputational damage the Armed Forces may have to regularly contend with, even if done unwittingly, or in their ‘best’ interests6.  Rather than treating these as solitary cases, the damage needs to be appreciated from the perspective of a steady loss of confidence among the public, given the numerous misquotes and allegations that form part of a daily commentary. The handicap of not being able to rebut encourages brand-bashing among such activists to the detriment of the Armed Forces. This is also likely to have long-term adverse effect on the serving rank and file who get caught in the cross-fire, and on potential talent who may harbour second thoughts about a career in the Armed Forces.

Controlling damage and restoring public faith would require real-time spotting of such content and a quick rebuttal in a matter of hours. In order to deter such activity, subsequent actions should be followed up expeditiously. A positive fallout of a good image on social media is the possibility of self-enforcing similar standards on ground by serving personnel. There are enough example of ‘unit’ ethos and culture bringing about positive change in personalities, and creating a good social media brand can only add to it.

Meaningful engagement around relevant concerns and narratives can be achieved using three prongs, focused on the official organs of communications/ public relations, serving personnel who can act as eyes and ears, and the columns of passive supporters outside the system who can force-multiply official efforts.

Upgrading the Quality of Our Official Communications: The essence of a successful perception management strategy is accuracy, unambiguity and timely response. To achieve this, the Armed Forces need to modify their PRO-based centralised information control/dissemination structure – by integrating a OODA (Observe, Orient, Decide, Act) decision model, employed widely in military planning. This would require a clear chain of command from the PRO down to field formations and include: (1) Facilities for improving situational awareness at each level, (2) A structure and method for sharing of information in real time between elements, and (3) A decision/escalation matrix to respond to unforeseen situations. The model would need to be adequately flexible to ensure quick learning through necessary trainings/tools, to build confidence in the system through positive relationships and transparency, and to enable pro-activeness in response. Success will depend on routine coordination at multiple levels. The basic structure would revolve around PROs and field formations as a hub and spoke model, with ownership over observing and acting (disseminating online or on-ground). It could extend upward to the Chief’s office, for orientation and decision, completing the respective service linkage. Depending on the nature of the issue, it could further link up to the MoD, the Integrated HQs and the other two services. In addition, coordination with agencies like the International Committee of the Red Cross (ICRC) and the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) could help craft appropriate responses to sensitive issues within the ambit of international law, potentially enhancing international credibility. Frequency and type of coordination needs to be refined with an aim to keep the lower levels orientated about issues and potential fallouts, while on the other hand enabling them to pass relevant ‘observations’ up the chain in quick time.

The OODA Loop, originally conceptualised by Col John Boyd, USAF (Ret.)

(Source: Patrick Edwin Moran[i])

 

Sensitising Serving Personnel About Their Role and Influence in Brand Building: The BSF jawan video clip of Jan 2017 complaining about the poor quality of food served8 indicates that official information control measures can be conveniently subverted by disgruntled elements, that content about the Armed Forces has a high potential of gaining virality (in this case abetted by adversaries across the border), and that in the confusion leading up to identifying the elements responsible, allied organisations may suffer damage, in this case the Indian Army. Given this reality check, it is recommended that while the PRO remains the hub of the model, all serving personnel need to be included in the larger narrative. While not expecting the individual units to interface with the public (except in case of crises), it is imperative that all should clearly understand the vision of the organisation.The consistency in thought, action and projection across the chain of command adds to the credibility of official communications. A proactive step in this direction would be to designate ‘situational awareness, communication and engagement officers’ at the unit / field level. These can act as the pivot around which the command’s vision and mission is communicated down the chain, in exchange for sharing local sentiment and information with the apex.

A positive outcome of understanding the larger picture may also infuse empathy among people removed from the decision matrix. Rational and consistent interactions on this pattern is likely to positively impact morale and discipline, and possibly deter public outpouring of disgruntled behaviour.

The personnel could be selected from local intelligence formations and could be linked with regional / central PROs. With Open Source Intelligence (OSINT) from social channels providing valuable inputs regarding community sentiment and enhancing situational awareness, this will also partially serve the intelligence mandate of the formations.It is assumed that these individuals would have a base level of understanding about modern communication techniques, mass psychology, and emerging social issues, which could be further honed. This cadre can then be expanded, to include personnel from units, to be trained by these individuals. Aside from linking hierarchies and mapping sentiment on the ground, these units could also be trained to respond to emergent situations proactively, and provide appropriate inputs to higher formations in quick time.

To augment this, the Armed Forces should consider institutionalising perception management training cells at training institutions beginning with junior courses and extending up to higher command curriculum, incrementally covering the tactical, operational and strategic nuances of the topic. A positive fallout of this could be an enhancement of critical thinking among personnel, and a more empathetic view of decision and policies afforded by a bigger picture understanding of the operational context.

Promoting Supporters and Converting Fence-Sitters: An option that can be put into action in quick time would be to cultivate external sources – supporters, veterans and stakeholders – including academics, journalists, etc. who are both interested and knowledgeable on service matters and who have a strong followership on social channels. These individuals can force-multiply the efforts of the Armed Forces by acting as their eyes and ears, while operating in arms-length manner, so as to maintain objectivity and ensure credibility. This may involve imaginative thinking, like the commissioning of ‘unofficial’ handles controlled by official spokespersons, which can permit sharing of a wider range of opinion. The Armed Forces could set up a working group involving such personalities which can meet at regular intervals to enhance collaboration potential. A key deliverable of such a collaboration should be to identify brand damaging content in real-time and create a response strategy within a defined time window, preferably not extending beyond 24 hours from the time the issue first surfaced. Executing such a mandate would require a skilled team under the auspices of the PRO, comprising social media experts, sociologists, and military scholars straddling the middle and senior management of the Armed Forces. It should also have a legal element, to coordinate with neutral bodies like the ICRC, study clauses and precedents, and analyse avenues to craft appropriate responses to all contingencies, within the auspices of international law.

Conclusion

For those equating this ‘capacity enhancement’ proposal with a double-edged sword need to keep in mind the numerous cases of disgruntled individuals and the ready-to-strike capabilities of adversaries who can easily augment these efforts, as was done in the BSF video clip case. Under such onslaught of misinformation, maintaining credibility will be difficult, unless countered in quick time. Other militaries have become wise to this, and are building capacity to mitigate such damage. One among many recent examples of such social media rebuttals came within 12 hours, by a handle supporting Israeli security forces9. The force-multiplier effect is there for all to observe.

While it may be that “the truth does not ever quite catch up with the initial lie if the initial lie is emotional and juicy enough”,10 countering baseless allegations and outright lies should be an important responsibility of militaries, which set the benchmark for national unity and cohesion. The Indian Armed Forces today remain a comfort zone for anyone seeking their support, and a home for anyone who has served in uniform. They stand for respect, order, uniformity, accountability and dedication, which can inspire and motivate society like few other. Appreciating this larger goal, it is high time the Indian Armed Forces took control over their social narrative and reimagined their engagement with the Indian people.

References:

1     https://www.researchgate.net/publication/293605705_Career_Expectations_and_Organizational_ commitment_of_Millennials_in_Indian_IT_industry_-_An_SHRM_perspective

2     http://www-personal.umich.edu/~prestos/Downloads/DC/pdfs/Redman_Sept29_TwengeCampbell2008.pdf

3     https://www.youtube.com/watch?v=4B_TlHJq1-4

4     https://www.youtube.com/watch?v=SUo8REevWQM

5     https://blogs.timesofindia.indiatimes.com/toi-edit-page/what-pakistan-teaches-india-one-or-two-good-decades-is-not-enough-to-guarantee-a-smooth-path-to-development/

6     https://www.newslaundry.com/2018/06/07/panag-major-gogoi-indian-army-transgressions-human-shield

7     https://commons.wikimedia.org/w/index.php?curid=3904554

8     https://www.thehindu.com/news/national/pak-sites-lapped-up-jawans-video/article18700988.ece

9     https://twitter.com/TheMossadIL/status/1027572117431361537

10           https://www.weeklystandard.com/jenna-lifhits/deepfake-videos-are-a-national-security-threat

 

(Squadron Leader Anshuman Mainkar (Retd.) served with the IAF (2003-14) as a Fighter Pilot and Air Intelligence Officer. A Computer Science graduate from the National Defence Academy, he also holds a Master’s degree in International Relations from the Fletcher School of Law and Diplomacy. He heads the Strategic Intelligence, Communications and Engagement team at Reliance Global Corporate Security. He can be reached at @anshumig /anshuman.mainkar@ gmail.com Views expressed are personal.)

(This article is carried in the print edition of September-October 2018 issue of India Foundation Journal.)

 

The US high power delegation led by the Secretary of State Michael Pompeo, and including the US Army Chief, has just concluded its visit to India. The two countries are moving towards closer cooperation in their efforts for regional and global peace and development. The US lately recognizes that the strongest and the largest democracy in the world should have convergence on approach to many regional and global problems with terrorism at the top of them all.

Strategic importance of relationship between the US and India lies primarily in their political arrangement of democratic governance. While the US is the strongest democracy in the world India is the largest. Both are multi-ethnic, multi-linguistic, multi-religious and multi-cultural societies. Together they send a message to the entire world that they are living examples of unity in diversity, something which other countries with diversified social structures can emulate and adapt voluntarily. In a world torn by contradictions and controversies democratic dispensation is the time tested module of accommodating different shades of opinion and approach. Protection and preservation of democracy against the forces of exclusiveness becomes a priority with the two countries.

Security and trade are crucial to development. Both countries have stakes in the security of the region which is catalyst to free flow of trade. Three-fourth of oil requirement of the world passes through the Arabian Gulf and equal size of international trade has to flow through the Straits of Malacca. This speaks loudly for the need of security of the Gulf and India-Pacific regions. Good relations between India and the US are a key to the imperative of security and trade with development as the final destination.

The United States was favourably disposed towards the leadership of Indian freedom movement against colonial power. However, during the cold war era the US found its interests served better by patronizing Pakistan. India pandered to the Soviet bloc. Nevertheless, the US did not fail to understand that despite many odds, India was wedded to democratic governance. Therefore relations never reached a freezing point which reflected maturity of statesmanship on either side. This understanding was reflected in the US offering huge quantity of wheat to India to overcome her grave food shortage during 1950s. The PL- 480 programme is a significant landmark in the history of bilateral relations. India improved its agriculture sector as a result of collaboration with the advanced agricultural expertise of the US. This was part of PL – 480 and later on it became catalyst to what Indians call “Green Revolution” or self-sufficiency in food production.

A marked change appeared in India’s policy towards the US after the implosion of the Soviet Union in 1991. Heads of the two governments exchanged friendly visits. India found vast scope for collaboration in many areas of development like strategic security, trade and commerce, science and technology, energy resources etc. But the most significant area was that of civil nuclear cooperation. The civil nuclear initiative has been strengthened by the regular meetings of the Indo-US Civil Nuclear Working Group (CNWG).

Cooperation between two major democracies purports prosperity of people in both countries and the world at large. Modi government’s objective of cooperation with the US is multi-dimensional but regional security and free and fair trade concept is at the centre of this cooperation. At present, the trade side of the U.S.-India partnership is vastly underperforming. Two-way trade in goods and services is about $115 billion. This pales out in comparison with two-way trade between the United States and China, which at about $650 billion is almost six times as large. Modi believes that raising bilateral trade to match the size of Sino-US trade is the key to the success of his doctrine of “Make India”. Here lies the importance of a “free and fair” trade agreement between the two sides that would serve their common interests. A fair and free trade agreement when signed could go a long way in strengthening bilateral relations. However, for the time being the process of finalizing such an agreement remains in suspended animation owing to unjustifiable tariff regulations on either side. Once they clinch an agreement, India could take care of other areas like energy, defense production, anti-terror and the growing influence of China in the region on its own.

Mechanisms like defense and anti-terrorism cooperation; strategic consultation, mutual investment programmers, space civil science cooperation, energy development projection etc. are the instruments that will enhance trade and economic prospect of both countries.

Trump administration’s India policy is a component of US’ South Asia policy overarched by Indo-Pacific strategy. Initially Trump’s strong stand on H-1B, EB-5 visa and immigration caused disquiet to New Delhi. His predecessors were liberal on these matters. Trump’s accusation that India was seeking billions of dollars from advanced countries in exchange for its support for the Paris Climate Change Agreement caused serious concerns in New Delhi. However, Prime Minister Mode’s US visit to the US helped normalize the situation.

Trump-Putin understanding bodes well for New Delhi. It can stop Russia from falling into the embrace of Xi Jinping. It allows India greater room in proposing important projects like the International North-South Trade Corridor.

President Trump’s deviation from the lukewarm policy of the Bush and Obama administration in dealing with terrorism and extremism gives satisfaction to India which is a victim of terrorism. During his visit to India, Defense Secretary Jim Mattis had hoped that India would take her rightful place at the global table meaning the Security Council. The two sides have also focused on strengthening cooperation in the Indo-Pacific and respecting freedom of navigation, over-flight and commerce. It is a matter of great relief for India. Revival of the Quadrilateral Security Dialogue among the US, India, Japan, South Korea and Australia last year indicates expanded bilateral engagement between New Delhi and Washington. However, accusing India of raising tariff on US imports is the latest irritant in Indo-US relationship. Their representatives are scheduled to meet soon to find a solution to the issue.

In his South Asia policy statement in 2017, President Trump said India was crucial to America’s interests in peace and stability in Asia-Pacific region. Previous administrations in Washington did not seriously think so. Trump administration also recognizes India’s role in stabilizing Afghan peace and economy. In Trump administration’s “Defense, Technology and Trade Initiatives” India occupies a prominent place as the world’s largest democracy and fast developing economy conducive to strengthening of peace in Asian region and the world. Calling ties with India as of utmost importance, US Defense Secretary Mattis said, “Washington would pursue a long term partnership with India to stabilize Asia-Pacific region.”

Trump has not minced words in declaring US’ determination of fighting terrorism to let humanity live in peace. He has made a resolve to take on these enemies of peace with the cooperation of democratic countries in the region. Indian Prime Minister Modi has been emphasizing on world powers to understand the seriousness of terrorist and extremist threat to peace. This shows convergence of policy of fighting the menace of terrorism.

Trump administration will support India’s membership in the Security Council as well as in NSG. The US supports Quad – 4 viz. Japan, Australia, South Korea and India. Thus Trump administration recognizes the strategic importance of India to peace and security of the Indian Ocean.

However, among the irritants in their relationship are the trade imbalance and Trumps’ decision to do away with EB-5. In both cases prospective Indian investors will be affected adversely. However, the two sides will be talking to resolve differences.

Asia-Pacific idea, dating back to 1960s was related to Cold War strategy of the US in the East. The proposition that future world history would be actually the history of Asia made the American think-tanks focus on broad East Asian cooperation in Asian politics and economic growth. However, China’s rapid economic growth enabled her go militarily strong enough to intimidate the South China Sea states and make naval forays into the Indian Ocean. This posed threat to the vital world maritime trade route passing through the Straits of Malacca. The concept of Indo-Pacific was thus born to meet military and commercial challenges in the Pacific region.

The concept was first expressed by the Japanese Prime Minister Shinzo Abe in his address to the Indian Parliament in 2006. In 2010 Secretary of State Hillary Clinton spoke about “expanding our work with the Indian Navy in the Pacific because we understand how important Indo-Pacific basin is to global trade and commerce.” The rationale for re-cycling the nomenclature is that the region now boasts the world’s three largest economies, seven of its eight fastest growing markets, and seven of the world’s ten largest armies and it is expected to produce more than half of the world’s economic output in the coming years. The reason why the US prefers Indo-Pacific instead of Asia-Pacific is that it acknowledges the historical reality and the current-day reality that South Asia, and in particular India, plays a key role in the Pacific and in East and Southeast Asia. Secondly, it is in the interests of the region, that India plays an increasingly weighty role in the region. India is a nation that is invested in a free and open order. It is a democracy. It is a nation that can bookend and anchor the free and open order in the Indo-Pacific region, and it’s America’s policy to ensure that India does play that role, does become over time a more influential player in the region
(Prof. K.N. Pandita is the former Director of the Centre of Central Asian Studies, Kashmir University, Srinagar.)

A fracas over a telephonic message from the Secretary of State Michael Pompeo to Imran Khan on 23 August only added to the already strained relations between the US and its former South Asian ally. Pakistani foreign minister Shah Mehmood Qureshi contradicted the content of the call. The State Department had said in readout that during the call “Pompeo raised the importance of Pakistan taking decisive action against all terrorists operating in Pakistan”. Islamabad refuted the US readout as incorrect, saying that this “issue of terrorism” was not discussed. However, when questioned by a reporter, the U.S. State Department spokeswoman Heather Nauert said there would be no correction in response to Pakistan’s complaint and said, “I can only say we stand by our readout.”

Mike Pompeo’s message was preceded by the visit of Iranian foreign minister Zarif to Islamabad and Imran Khan Government’s outright expression of support to Iranian stand in the face of Trump’s threat to rescind the nuclear deal. Pakistani foreign minister’s mind was also worked about the New Delhi visit of the US high-power delegation likely to take place after about a week of its visit to Islamabad. By raising the controversy Pakistan government wanted to give a message to the people that the US had taken the first initiative for rapprochement in bilateral relations that had begun to nosedive with the famous remark of Trump that “we gave billions of dollars to Pakistan and in return, they gave us lies and deceit.” Qureshi’s compulsion of distorting the factual message reflects discomfiture caused by Washington’s insistence on “do more”.

Pak Foreign Minister’s attempt to dilute the content of the telephonic talk becomes meaningless when we focus on Pentagon’s overview of Pak-US relations with reference to the fighting in Afghanistan.
The denial could also be an attempt to dodge the closely guarded commitment that Pakistan army top brass might have made to their counterparts in Washington. What was the army top brass of the two sides talking about all these months? In a statement given at a briefing in the Pentagon the spokesman Mr Faulkner said “Since January, they have consistently engaged with Pakistani military officials at the highest levels, based on both a shared commitment to defeat all terrorist groups that threaten regional stability and security, as well as on a shared vision of a peaceful future for Afghanistan”. Does Pakistan army now want to make the scapegoat of the civilian government for wriggling out of the broad frame of a formula worked out during these parleys for ending Afghan crisis?
Days before Pompeo delegation’s departure for Pakistan, Defence Secretary James Mattis said in a news briefing at the Pentagon that in their talks with Pakistani officials, the delegation will “make very clear what we have to do, all of our nations, in meeting our common foe, the terrorists, and make that a primary part of the discussion.”
Evidently, the issue at hand is Afghan war and Pakistan’s hand in fuelling its flames. Noting that repeated warnings to Pakistan to deny safe haven to Afghan Taliban, particularly the Haqqani and Let networks fighting the US-led NATO forces have fallen on flat ears, Trump administration put into practice its three-point agenda of containing global terrorism with epicentre in Af-Pak region as was announced by him in his speech in Saudi Arabia last year. He earmarked three facets of US’ new strategy for South Asia viz. (a) stripping terrorists of their territory (b) cutting off their funding and (c) exposing the false allure of their evil ideology. “Terrorists are nothing but thugs, criminals and predators”, he had concluded.
Referring to Afghanistan and Pakistan in his Camp David speech last year, President Trump had underlined the basics of his strategy as (a) stopping resurgence of safe havens and (b) preventing nuclear weapons and materials being used against us or anywhere in the world. This very emphatically suggests that Trump administration’s main concern is to find a mechanism that would deny the terrorist groups in Af-Pak region access to Pakistan’s nuclear arsenal.

Trump administration’s indication of discouraging IMF to bail out Pakistan with 9 billion dollar loan from its crumbling financial crisis is in addition to the cancellation of US dollars 300 million aid to Pak army. The loud and clear warning has come on the eve of the visit to Islamabad of a high powered US government delegation. Pakistan foreign minister Qureshi is trying to minimize the adverse impact of the cancellation of a hefty amount of aid by raising flimsy technical issues. However, Lt. Col. Kone Faulkner, the Pentagon spokesman in an email to the AFP made clear why the US had blocked the amount of aid. He said, “Due to a lack of Pakistani decisive actions in support of the South Asia Strategy… $300m (actually $323.6m to include non-Pakistan funds) was reprogrammed by the Defence Department in the June/July 2018 time frame for selected urgent priorities”.
This statement touches on the essence of the irritants between the two countries. It found reverberation in the statement of the Chairman of the Joint Chiefs of Staff Committee General Joseph F. Dunford, who also had attended the Congressional briefing, that the US had “permanent interests in South Asia” and wanted to “maintain a presence (there) to have influence in that region”.

Incidentally, General Dunford’s inclusion in the delegation dispels the impression that this was not a proper visit but just a stopover, as US State and Defence Secretaries were both going to be in New Delhi next week for the first two-plus-two talks between the United States and India.
The “permanent interest in the region” to which the American General was referring has to be understood by what President Trump expressed about dismantling of terrorist organizations active in Afghanistan-Pakistan region, and its threat to American interests. President Trump asserted that 9/11 had originated in that very region. A further clarification of the expression of interest is reflected more eloquently in how Trump looks at India in his vision of the new South Asian strategy. He had made a very clear and threadbare statement:

“Another critical part of the South Asia strategy for America is to further develop its strategic partnership with India — the world’s largest democracy and a key security and economic partner of the United States. We appreciate India’s important contributions to stability in Afghanistan, but India makes billions of dollars in trade with the United States, and we want them to help us more with Afghanistan, especially in the area of economic assistance and development. We are committed to pursuing our shared objectives for peace and security in South Asia and the broader Indo-Pacific region”.

At the Pentagon meeting Secretary Defence, Mattis said, “We see the strengthening of India’s democracy, its military, its economy as a stabilising element in the world. And we want to make certain that where we have common interests, we are working together.”

This is a paradigm shift in US’ South Asia policy. In other words, US acknowledges the significance of India’s role in stabilizing peace in the South Asian region where Afghanistan and Kashmir continue to be the zones of activity of terrorist organizations, particularly those that have been designated by the US or the UN. The first pillar of the new strategy in South Asia enunciated by President Trump and stated above is of “stripping terrorists of their territory”. This means chalking out of a joint strategy with friendly countries to deny space to the terrorists presently active in two conflict zones in South Asia. The message is clear and loud for all terrorist networks and their handlers as well as safe haven providers.

As for the second pillar meaning “cutting off their funding” the Trump administration has taken two explicit steps viz. using its clout with IMF to obstruct bailing out Pakistan from financial crunch and cancellation of 300 million US dollar aid, a proposal waiting Congressional determination likely to come before the close of September.
Curiously, Pakistani foreign minister Qureshi has disputed the $33b figure quoted by President Trump, insisting that around half of the money relates to reimbursements. His contention about the cancelled aid is that the payment, which the US is now considering scrapping, is, in fact, the support coalition fund. “This is not an aid of any kind that can be suspended,” he said. “This is actually the payment of expenses incurred by us during the war against terrorism.” However, forcefully rebutting Pakistan’s contention, Pentagon spokesperson Faulkner analysed the US stand as this.

“Unfortunately, recent reporting has distorted the details of the Coalition Support Fund (CSF) by stating several things out of context. The suspension of security assistance to Pakistan was announced in January 2018. The CSF is included in the suspension and it remains in place. This is not a new decision or a new announcement, but an acknowledgement of a July request to reprogram funds before they expire. Reminding Pakistan that since January, they have consistently engaged with Pakistani military officials at the highest levels, based on both a shared commitment to defeat all terrorist groups that threaten regional stability and security, as well as on a shared vision of a peaceful future for Afghanistan.

He made it clear that the US “continues to press Pakistan to indiscriminately target all terrorist groups, including the Haqqani Network and LeT, and we continue to call on Pakistan to arrest, expel or bring the Taliban leadership to the negotiating table.” Asserting that 2018 DoD Appropriations Act, published on March 23, details $500 million was rescinded by the Congress. He dismissed the Pakistani stand by arguing that owing to a lack of Pakistani decisive actions in support of the South Asia Strategy, the remaining $300 million was reprogrammed by the Department of Defence (DoD) in July 2018 time frame for other urgent priorities before the funds expire on September 30.
In final analysis the message brought to Islamabad by the US delegation boils down to this: Sever all links with Taliban terrorist groups including Haqqani and LeT networks; become our partner in new South Asian strategy of uprooting terrorism of all hues and in stabilizing peace in the region; ensure that nuclear weapon and material does not fall into the hands of terrorists. In return, we shall restore the process of giving the aid money and develop a sound partnership in bilateral trade and commerce.

Evidently, Pakistan will make a deep study of the repercussions of dropping down the Haqqani and LeT networks as that would amount to the all-time departure from the policy of carving strategic space westward and eastward with focus on Afghanistan and Kashmir. Islamabad will also carefully study the outcome of the US high-level team’s parleys with the Indians next week. Interestingly, New Delhi has done some advance spadework in J&K as a complement to the US’ theorem of stripping terrorists of their territory. In this context, some analysts view the dismissal of PDP-led coalition government as a much needed intervention to restrict the support to terrorist organisations from some within the government. As per them, the continuation of the process will see the revival of the suspended assembly to prop up a government with far less commitment to the spectre of separatism and fundamentalism.
Islamabad will closely watch to what extent the US high power delegation will gravitate to the Indian perception of terror phenomenon in South Asia. In the impending 2 + 2 meets in New Delhi, the status of Sino-Russian forays into South Asia and India-Pacific politics is likely to be the keynote subject for discussion. Remember that the Chinese foreign minister is expected to show up in Islamabad soon after the departure of the visiting US delegation.
(Prof. K.N. Pandita is the former Director of the Centre of Central Asian Studies, Kashmir University, Srinagar.)

In all probability the stalemate in J&K is finally heading towards an end and the legislators hitherto hibernating in suspended animation are gearing up for resumption of their normal function of law making. The political scenario unfolding now in Srinagar and New Delhi shows that stakeholders were silently working out a formula for breaking the impasse. It seems that good wisdom has prevailed and re-alignment of forces is round the corner. Political parties were given adequate time to cobble a government capable of delivering the goods.
Analyzing the sequence of events, we find that the Union government has firmly upheld the dignity of the office of Governor by allowing Mr. N.N. Vohra to complete three months of extended term. He demitted office gracefully.
Hopefully,, from her nearly three years’ stint in office, the PDP chief will have learnt at least one far-reaching political lesson, viz. no covert conciliation or espousal of anti-national elements is going to separate the State from the Indian Union. The hard core of her vote bank carved out of radical ideologues was the last arrow in her quivers that is now standing exhausted.
Not only that, owing to her political shortsightedness and flawed conviction she gradually and recklessly paved the way for disintegration of the PDP, a party which she had built with the tacit support of Jam’at-i-Islami of South Kashmir. The cracks in the party became visible soon after the coalition government fell. She lost the strength which otherwise she would have made use of in projecting PDP as a victimized party to retrieve her image. The question of horse trading, an inevitable consequence of suspended assemblies, did not arise for her when she found her herd in total disarray. At the end of the day if the stint in a thorny office has had any lesson for her it is that this nation and its people have to be governed by democracy essentially anchored in justice and benevolence not in hatred and acrimony.
For the NC chief also there is the stark lesson that he cannot extract unjustifiable concessions from New Delhi by dramatizing situations and handing out subtle threats to known or unknown adversaries. He seems to be euphoric about a fair chance of returning to power, something for which he has the inscrutable penchant. However, he needs to realize that sometimes his unpredictable waywardness can become ruinous for him. Now that he is again pandering to nationalist politics after brief honeymooning with a faction of the Hurriyat, he will be faced with the challenge of rebuilding his and his party’s along the old profile. One is tempted to argue that old parameters have collapsed and there is no escape from looking at Kashmir politics through the prism of pragmatism. With his re-assessment of ongoing situation and its candid public expression, Dr. Farooq has to remember that he has chosen to categorize Kashmir situation as indisputable part of Islam’s domestic strife between the radicals and the progressive forces. As such, nearly three decades of violence and mayhem in Kashmir could be called the lull before the storm.
These realizations of current Kashmir politics by the mainstream parties have to be counted as signals for a positive change in Kashmir political scenario after three decades of violence and blackmail. In 1975, when late Sheikh Muhammad Abdullah returned to power after signing the Accord with Indira Gandhi, a correspondent asked him what the achievement of his long years of political exile was. He quipped that for all those years they had done only “awaragardi.”
Dr. Farooq is known for his whimsical statements and contradictory comments. It is difficult to assign him any specific category in the game of politics. Yet proverbially speaking he has a method in madness. Dr. Farooq’s nationalist utterances at the funeral of Vajpayee and his bizarre interview to Arnab Goswami of Republic TV channel have already caused anger and revulsion in separatist groups in Kashmir. At the Hazratbal shrine, the traditional stronghold of NC, he sat with ordinary people in a row to offer Eid prayer. Miscreants unsuccessfully tried to rough him up. The so-called freedom fighters in Kashmir Valley consider it a scandalous setback to their Islamic radicalization movement and threat to their anti-democracy campaign. They have already begun to pour abuse on him in crudest possible terminology. However, Farooq with inherited as well as acquired knowledge is not at all a stranger either to the Kashmirian psyches or to the secrets of who butters whose bread in Kashmir.
Nevertheless, he has never been ideologically comfortable with the Jamat-i-Islami or the Ahle-Hadith factions. True, these rabid communal groups did succeed in diluting some of NC’s constituencies in previous election, yet Dr. Farooq retains the capability of retrieving the lost ground with some meaningful input when he means it. NC and BJP have the history of working in unison at the Union level. Dr. Farooq’s recent statement that while the nation has progressed and moved forward, the State of Jammu and Kashmir remains stagnant, at least gives the impression that the stagnation of the State must come to an end. He candidly holds the separatists and the Jamat is responsible for the sordid phenomenon of destruction. Maintaining the pace of development of the State with the rest of the country is possibly only when there is peace and State’s relations with the Union are smooth and congenial.
The credit of fostering a re-think of ground situation in the State should actually go to the Jammu BJP electorate that sent in a solid team of the national mainstream party to the State Legislative Assembly. For the first time in the history of the State, Jammu has played the crucial balancing role. Its results will be known after some time.
A Good deal of spade work has been done behind the curtain during last couple of months to bring about political stability in the State. BJP top leadership was throwing subtle hints to that effect intermittently. One can find the rationale in Modi government taking Dr. Farooq into confidence while contemplating a thorough shake-up in the ground situation in the State in general and Kashmir Valley in particular.
A new chapter in current Kashmir politics opens with the appointment of new Governor Mr. Satya Pal Malik who has essentially a political background and is not a bureaucrat or a retired army officer. His friend Dr. Farooq was the only Kashmiri leader present at the airport to receive him.
The tasks before the new governor have to be prioritized. Restoring the rule of law and denying politicized and polarized bureaucracy the freedom of defiance with impunity, thanks to the intransigence of PDP’s pro-Jama’at proclivity, is of immediate importance. Entire State administration must go through a purge of anti-national moles that have created networks and dens. Clean administrative system is largely dependent on improving and strengthening of democratic institutions like Panchayats for which elections are overdue. Developmental works have come to a standstill and public services have become farcical owing to widespread corruption. Yet another area that must receive the attention of the new Governor and the in-coming government both is that discriminatory treatment of Jammu and Ladakh regions has to be done away with. Disgruntled Jammu and Ladakh are the source of instability of the State and no government with the well- being of the entire State at its heart can afford to become a prey to regionalism.
(Prof. K.N. Pandita is a former Director of the Centre of Central Asian Studies, Kashmir University, Srinagar. Views expressed are personal.)