India Ban on $47 Billion Arms Imports Sowing Uncertainty
The "Surya Kiran" (Sun Rays) Indian Air Force aerobatic display team perform aircraft perform aerobatics in a flying display at the Aero Show at Air Force Station Yelahanka in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)

India Ban on $47 Billion Arms Imports Sowing Uncertainty

India’s move to ban the import of certain weapon systems will do little to boost local manufacturing and is sowing uncertainty at a time when the South Asian nation is trying to ramp up defenses on its restive borders with China and Pakistan, according to analysts.

Prime Minister Narendra Modi’s administration earlier this month announced curbs on $47 billion worth of imports that include communication satellites, conventional submarines and light machine guns. But defense experts said they didn’t address critical issues such as the certification of systems and locally-made components, and won’t prevent the military from making emergency purchases of equipment from foreign vendors.

Modi has struggled to transform the world’s second biggest arms importer into a defense manufacturing powerhouse since a 2014 proposal to produce indigenous equipment and systems worth $100 billion by 2020. The target has since been slashed in half and the deadline extended to 2027, while the need for more advanced weaponry grows more urgent following the most deadly border clash with China in four decades.

The ministry’s ban on imports will have little impact beyond “measures already taken to localize defense production and reduce import dependency,” said Amit Cowshish, a consultant with the New Delhi-based Manohar Parrikar Institute For Defence Studies and Analyses and a former financial adviser on acquisitions in the Ministry of Defense.

“The promotion of local manufacturing requires more cooperation between the military and domestic defense industry,” Cowshish said. “Mutual trust is missing, with everyone working at cross purposes.”

While New Delhi is the world’s third-biggest military spender, its air force, navy and the army are still equipped with weapons that are largely obsolete.

‘Self-Reliance Push’

The push for locally-produced systems and hardware was a big step toward self-reliance in defense and creates an opportunity for the Indian defense industry to manufacture the items using their own design and development capabilities, the Ministry of Defense said in a statement on Aug. 9.

A defense ministry spokesperson was not immediately available for a comment.

Similar policy declarations to stem imports were made by India in 2013, under then prime minister Manmohan Singh, and also by Modi’s administration in his first term in 2018, didn’t significantly increase the ‘Made in India’ products deployed by the military.

“Time and access to technology is fundamental to such efforts -- currently a large proportion India’s defense industry is little better than system integrators,” said Rahul Bedi, a New Delhi-based independent defense analyst. “A major dose of realism is needed.”

The banned list is also vague on the position of joint-ventures between Indian and foreign manufacturers and license produced weapon systems, he said.

Despite its drawbacks, India’s nascent defense industry is cautiously optimistic about the new policy.

“We are sure that this list will keep getting amended to add newer programs that lay a road map matching our nation’s aspiration,” said Jayant Patil, senior executive vice president (defence & smart technologies), Larsen & Toubro Limited.

©2020 Bloomberg L.P.

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