 Hello and welcome to NewsClick. The draft of the defense production policy for 2018 was recently released for public comments. This draft, according to the government, is focused on making defense production industry friendly. And to do this, it also lays out certain goals and objectives which can be seen as a little too ambitious to discuss what the policy says and how the government is really planning on achieving these goals we have with us today, D. Raghunandan from the Delhi Science Forum. So, Raghun, firstly, we see that the policy is very much focused on partnering with the private industry to achieve a lot of goals and objectives and in pretty much all aspects, right, from manufacturing to research and development. So, what do you think about this route to achieving the goals? Two aspects, I think, come up most in my mind. The first is that I think the defense production policy in laying out a framework appears to look at defense production more or less like any other industrial sector. And I think the two are very different. So, a lot of the defense production policy speaks of measures in manufacturing, in innovation, et cetera, like it would for any other industrial sector. Whereas in defense, I think the methods, the structure of the industry and its relationship to your military and its requirements works in a very different way. In normal industry, you would get companies who design a product which would get launched into the market and either succeed or fail in the competition. Defense industry is not like that. One has to define the product first and work towards designing it in such a way that it fits the requirements of the user agencies, the defense forces. So, whereas the defense production policy speaks of creating an environment of competition and competitive industry which would throw up these good technologies and good products, that's not the way the defense industry works. The defense industry does not have different companies making different products, designing them, spending its own money, and then floating it to the user industry with the Air Force of the Army then choosing A, B, C, or D. It's a joint exercise to develop systems that the user services want. This, I think, makes the entire overview of the defense production industry very different from the way this document approaches it. So that's one part. The second part of it, I think, is that the defense production policy lays out some ambitions, goals, if you like, from a starting point where it says, despite all the many years of experience of the defense public service, public sector undertakings and investment in research by the DRDO, India is still the largest importer of military hardware in the world. Now, instead of diagnosing why this has happened or arriving at a proper diagnosis of this, it proceeds to then say we will do these various measures to create a competitive environment, create a military industrial complex, if you like, which will then make India self-sufficient. And it puts forward the rather fantastic goal of achieving this self-sufficiency in five years. Apart from self-sufficiency, they also want to have huge turnovers and investments and exports. And it lists about a dozen or more armament systems in which it states its goal as wanting to become self-sufficient, again in five years. And these weapon systems range from aircraft to small arms. I think for a country which, in terms of defense production and research and self-reliance, has struggled to meet these goals, the task should have been to achieve these step-by-step, rather than putting forward these highly overambitious goals of covering all sectors of the industry and saying we will achieve all this in five years. Interesting way that the policy proposes to go about this is also by, of course, the ease of doing business, increasing the ease of doing business, increasing the ease of doing business. Where they say that the startups and these MSMEs, they will not be, there won't be any restrictions on the basis of their prior experience or turnovers and it'll be more focused on the, if the technical and functional requirements are being met, then they will be allowed. So how does that fit into the defense industry as well? Is that level of competency, is that sufficient? Let me put it like this. There are weaknesses in the Indian manufacturing sector itself, with the exception of a few industries, even in the large sector, forget the small sector, very few have the kind of experience, either in precision manufacturing, in high-tech manufacturing, or in working with the kinds of materials that are used in the defense sector. So much of this capability will have to be built from scratch. If you ask me, the way this is to be done is to build around the existing defense public sector undertakings, the ordinance factories, et cetera, encourage the design development and manufacture of systems and then link MSMEs with these as subcontractors or sub-assembly manufacturers and gradually build up their capability. This is what has been done in our space sector for the rocket satellites. It's being done in missiles. It's been done in atomic energy. Whereas what the defense production policy seems to suggest is working at this backwards to develop the capabilities of the MSMEs and then aggregate those to form larger systems. This is not going to work either. Once again, I think that the priority for a defense production policy which has set itself the goal of attaining self-reliance and self-sufficiency is to sit down with the user services and this is not expressed in any institutional manner in the defense production policy. How does India go about defining its goals of military hardware? You've just listed a whole lot of hardware which everybody wants. But what is needed is for research organizations, manufacturers and the military to sit together and fix their goals. We want to make such and such aircraft in the next 15 years. We want to make armored carriers or tanks in the next 15 years with specifications which match those of what the military wants and then in a mission mode style, you go about setting yourself targets of reaching it through a mix of the large public sector undertakings with ancillaries in the MSME sector. To me, the defense production policy is putting the cart before the horse and approaching this the other way around. So what do you think about what the policy says about bolstering the growth of public sector undertakings in the public sector? So as you know, we've been following the story of defense procurement and defense production across many platforms. And what we've seen is the government wishing to shift from a public sector manufacturing base to a larger, more widespread private sector manufacturing base for the military. To me, there are two issues with this. One is it begs the question of where is the design development capability coming from? Manufacturing capability is one. Design and development of advanced systems of this kind is something else entirely. The government seems to have put its faith in a policy of import of technology, if not of systems, inviting original equipment manufacturers from other countries to set up bases here by which they think technology will come. All experience hitherto has said, foreign equipment manufacturers will come in to manufacture but will never part with the technology. Technology is something you have to acquire on your own. That's one. The second aspect is I believe there is a gross overestimation of the role of competition in the sector and what can be achieved. If you look at the international experience, whether it's in the United States, the UK, France, Russia, who are the major defense equipment manufacturers, you will see that it is not as if various private sector players have engaged in a thinking exercise, have developed at their own cost different kinds of equipment and then the government has chosen between them. It's always been an exercise where the government, the military and large manufacturers, private sector, public sector really doesn't matter. In the US, they are private sector. In Europe, it's a mix of the private and the public sectors. In Russia, it's all state sector. But in all these, the way it's been done is for government, the military and major equipment manufacturers sit together, draw up a mission as to what is required. Then you can have competition between two industries, three industries as to which comes out with the better design. You choose those and then manufacture it. That's the way it has always been done and that's the way we should be approaching it in India as well. But this perspective seems to be completely missing from the defense production policy, which looks as if it's like an automobile manufacturer, you call 10 manufacturers, they'll set up ancillaries and supply chains and come out with new models which may work or may not work in the environment. So thank you, Raghu, for joining us in this discussion and thank you for watching News Clicks.