New Delhi has always struggled with competing policy aims when it comes to buying arms. Should the priority be to buy the best possible weapons for its men-in-arms, promote indigenous arms production, or avoid any charges of corruption?
In theory, the answer should be: All of the above. In practice, these often contradict the other. Thus, direct government-to-government sales are the most transparent way to buy weapons. But they do not allow offsets and undermine indigenisation.
The weakness of India’s industrial base has meant that a ‘Make in India’ programme in the past has meant substandard weapons. It also fed a culture of delusion about the public sector defence firms who, effectively, imported knock-down kits from overseas, gave the assembled weapon a Sanskrit name and pretended they had been ‘made in India’.
The best point of the latest defence policy reforms has been a recognition that Indian industry has minimal capacity for the precision machinery required for genuine indigenisation. This must be built up over time, especially within the private sector. This requires a less onerous offset policy. Another reform is recognising that awarding contracts to the lowest bidder is a poor way to buy weapons.
It was common for companies to sell to India cheaply and then, once dependency was locked in, to price gouge on the spare parts. Given the complexity of modern weaponry it is dangerous to presume they can be bought in the same manner that the government procures teabags and chairs.
There is also an expectation that New Delhi will also morph the existing policy of blacklisting arms makers guilty of corruption into fines and imprisonment. In an industry where there is often only one or two makers for a specific kind of weapon and where such arms could be crucial to the national defence, this policy was simply foolhardy.
At the heart of all this is a recognition that to produce world-class weapons at home requires a policy of gradual change. It took decades for India to develop the ecosystem of component subcontractors to allow it to make automobiles. It will take even longer for something more complicated, like a fighter jet.
As the policy becomes more nuanced, the government must also work out a system that opens the procurement and offset policy to greater public scrutiny. As the transactions become more complicated, false accusations of corruption will become easier to level.
Even if they come as they are sure to do, the government must ensure it does not tie itself and defence procurement reforms into knots as a consequence — and undo the good work that has been done so far.