At a media briefing just before the recently conducted Exercise Iron Fist, a firepower demonstration by the Indian Air Force (IAF), the Vice Chief of the Air Staff stated that “numbers are not adequate to execute a full air campaign in a two-front scenario.”

This rare public admission by a senior officer of what is commonly discussed privately and has been written about frequently, serves to highlight the fact that around two decades of disregard of the IAF’s requirements to meet its assigned tasks and roles have rendered it inadequate to the mission of managing simultaneous aerial tasks related to our two adversarial neighbours.

In spite of the odd Indian analyst pooh-poohing the idea of a two-front war as far-fetched, for the IAF it remains a real threat for which it is not equipped. Ashley Tellis, Senior Research Associate, Carnegie Endowment for International Peace, Washington DC, provides independent substantiation of the VCAS’ assessment in his study entitled ‘Troubles They Come in Battalions: The Manifold Travails of the Indian Air Force’. He states that “the increased capital expenditures essential to strengthen Indian airpower cannot be put off for very much longer if the IAF is to secure its operational superiority and grow towards the 60-squadron strength eventually required to prevail in the high-intensity two-front wars that India might face over the long term”. Despite the fact that India is the fourth largest defence spender and the largest importer of arms in the world, its processes and practices for procurement of defence equipment remain mired in bureaucratic procedures. There was thus a sense of suppressed expectation regarding the promulgation of a new manual for capital defence procurement—the Defence Procurement Procedure 2016 (DPP 2016) which was released during the Defexpo 2016 held at Goa March this year.

THE RELEASE OF DPP 2016 ON MARCH 28 WAS A BIT OF AN ANTI-CLIMAX INASMUCH AS A VITAL CHAPTER ON STRATEGIC PARTNERSHIPS AND SOME APPENDICES AND ANNEXURES, WERE EXCLUDED

DPP 2016

The release of DPP 2016 on March 28 turned out to be a bit of an anti-climax inasmuch as a vital chapter on strategic partnerships and some appendices and annexures, were excluded from the version uploaded on the Ministry of Defence (MoD) website. The excluded content would have been the crucial policy providing guidance on the participation of domestic industrial base and foreign vendors in the modernisation that Indian armed forces await with growing impatience. The Preamble to DPP 2016 acknowledges that, “While maintaining highest standards of transparency, probity and public accountability, a balance between competing requirements such as expeditious procurement, high quality standards and appropriate costs needs to be established. As a result, decision making pertaining to defence procurement remains unique and complex”. The Preamble calls ‘self-reliance’ a major cornerstone on which military capability rests and goes on to assert that the concept of ‘Make in India’ is the focal point of defence acquisition policy/procedure. The first chapter of DPP 2016 defines the aim as ‘to ensure timely procurement of military equipment and systems as required by the armed forces’. Interestingly, the previous version, DPP 2013 defined its objective as ‘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.’ One hopes, on behalf of the IAF, that the change from ‘expeditious’, a loose-ended term to ‘timely’ is not merely semantic, but represents a desire of the establishment to set timelines for procurement procedures to culminate in actual acquisitions.

A significant change from the previous version is the prioritisation of acquisition categories for procurement of defence equipment with ‘Buy (Indian – IDDM) (Indigenously Designed, Developed and Manufactured)’ category being placed above all the categories existing earlier i.e. ‘Buy (Indian)’, ‘Buy and Make (Indian)’, ‘Buy and Make’, ‘Buy (Global)’ and ‘Make’. ‘Buy (Indian-IDDM)’ category refers to the procurement of products from an Indian vendor meeting one of the two conditions: products that have been indigenously designed, developed and manufactured with a minimum of 40 per cent indigenous content (IC) on cost basis of the total contract value or alternatively, products having 60 per cent IC on cost basis of the total contract value, which may not have been designed and developed indigenously. There is thus an effort to encourage indigenous design — an area we have been lagging badly in as far as aerospace industry is concerned. Although the laudable aim of selfreliance will take decades due to the opportunities squandered in the past, at least a beginning appears imminent. A serious look is required at the offers by Boeing, Lockheed Martin and Saab to manufacture modern combat aircraft in India. Fitting such offers into the DPP 2016 philosophy with the ultimate aim of self reliance may be a profitable course of action.

Returning to strategic partnerships, after the Rafale was selected as the platform of choice for the medium multi-role combat aircraft (MMRCA) tender, it was reported that Dassault Aviation had selected Reliance Industries Limited (RIL) as its private sector partner to manufacture the Rafale jets in India. There was intense lobbying by the Hindustan Aeronautics Limited (HAL) which had originally been named the Indian partner in the RFP. The government finally overruled Dassault’s contention that if it was to be responsible for the quality and time guarantees it should have the freedom to select its partner. The 126 Rafale deal fell through and the new 36 Rafale deal may be predicated to manufacture of more Rafales on Indian soil (beyond the 36). If that comes about, Dassault may look for a local partner other than HAL and that is where the provisions of the DPP 2016 in terms of strategic partnerships would become critical to the participation of capable and efficient private entities. In this context comes a public lament by Anil Ambani about opportunities being denied to new defence companies on grounds of lack of experience. Reliance Group is a new entrant in the defence sector and most recently the government approved 12 industrial licences for defence subsidiaries of group company Reliance Infrastructure Ltd (R-Infra) for making helicopters, aircraft, missiles and unmanned aerial vehicles (UAVs), among others. Hopefully the forthcoming chapter on strategic partnerships in the DPP 2016 will redress this grievance that new but capable companies have.

DELAYS IN PROCUREMENT ARE NOT ON ACCOUNT OF LACK OF LAID DOWN PROCEDURES, BUT RATHER THE WAY PROCEDURES ARE TRANSLATED INTO PRACTICES WHICH ARE STEEPED IN RED TAPE

In this context, it may be mentioned that the IAF itself has some in-house manufacturing capability that could be nurtured. In 2014, a team from Pilatus, the Swiss company that supplied the PC-7 trainer to the IAF, visited IAF’s No. 5 Base Repair Depot at Sulur and opined that the PC-7 could be produced under licence at that facility. The IAF itself could be a candidate for indigenous contribution to ‘Make in India’ albeit the beginning may be a modest licensed-production project.

Budgetary Considerations

The stated aim of DPP 2016 links the timely procurement of military equipment, systems and platforms for the armed forces through ‘optimum utilisation of allocated budgetary resources.’ However, the budgetary allocation itself is shrinking, putting constraints on acquisitions and procurements by the IAF. The capital acquisition allocation for IAF for 2016-17 is Rs. 27,556.02 crore against a budget estimate for 2015-16 of Rs. 31,481.52 crore (revised to Rs. 28,643.1 crore). This 12.5 per cent decrease over the previous year’s figure is despite the fact that a deal for 36 Rafale aircraft is impending. The Finance Minister’s budget speech this year omitted to mention the broad defence budgetary allocation, something that has not happened in the past. As some defence watchers hasten to point out, this omission was not a good message to send out from the Parliament’s rostrum, whatsoever may have been the Finance Minister’s personal reasons for doing so. It can be expected that, as the budgetary year progresses, there will be revisions to the figures largely on account of unspent capital account allocations due to the delays in decision making. To put revisions into perspective, the revised figure for 2015-16 ( Rs. 3,26,992.51 crore) was Rs. 14,780.10 crore or 9.5 per cent less than the budget estimate figure ( Rs. 3,41,772.60 crore) for the year. The bulk of this decrease represents unconsummated planned expenditure on the capital account which is meant for the acquisition of new weapons systems and defence equipment.

So is DPP 2016 going to provide fillip to the way we spend allocated capital acquisition funds? It appears unlikely to happen as the delays are not on account of lack of laid down procedures, but rather the way procedures are translated into practices which are steeped in red tape. Invariably, the blame for the delays is apportioned by analysts on the defence forces and bureaucracy alike even as the former cry themselves hoarse in pursuit of their legitimate needs. The result of all these delays is a cumulative effect of retarding modernisation of the IAF to an extent that senior officers are constrained to make public iterations on the subject.

Conclusion

The IAF has earned a veritable reputation as a highly professional force by any standards. One hopes that, if and when the day comes that the IAF has to face the injury of an ignominious aerial trouncing, it is not accompanied by the insult of being accused of not doing enough to keep its operational readiness at the levels ordained by strategic imperatives. The single major factor impeding IAF’s accomplishing the combat capability it hankers after is the failure of the establishment to perceive the consequences of a weakened air force on national security. All other attributory factors like budgetary constraints, frailties of acquisition processes, a scrawny combat aircraft manufacturing industry, lack of endeavour to seek and acquire leading edge aerospace technologies and a long march ahead to self-sufficiency in aircraft production are the symptoms rather than the causes of this failure. Perhaps the time has come for the Prime Minister to intervene and explore the possibility of aerospace industry being given the same status as the national nuclear and space endeavours so that the Prime Minister’s Office (PMO) can direct it without delays and without bureaucratic morass. This step may bring about the laudable aims of self reliance and ‘Make in India’ enshrined in DPP 2016 as far as aerospace industry on the one hand and the IAF’s operational preparedness on the other, are concerned.