The Occasional Paper examines India's defence innovation performance, especially of the Defence Research and Development Organisation (DRDO) and the defence industry. The paper argues that the innovation performance of these two players is constrained by lack of a higher organisational structure which could provide direction and required thrust to the indigenous R&D.
While there was perhaps no option for the MoD but to do what it has done, it would be naive to expect the seller to acquiesce in forfeiture of the bank guarantees, recovery of the sums allegedly paid in violation of the PCIP (assuming that it will be possible to recover this amount) and to simply take the three helicopters back without demur.
This programme was a sincere effort by the MoD to walk the talk on participation of the private industry in defence manufacturing. The success or failure of this programme will have a long lasting effect on MoD’s efforts to strengthen the defence industrial base in the country.
The avro replacement is not a design and development programme which will involve extensive use of the airfields for test flights. It is an aircraft that is already flying and will be built as per the OEM’s specifications that will go into manufacture of the aircraft in India.
India-US defence ties are shifting away from a ‘buyer-seller’ path to one of co- development and co-production. In Washington this is viewed as a change from a ‘culture of presumptive no to one of presumptive yes’.
The services will have no option but to reduce the allocation under the heads where the impact is not immediately visible: maintenance of infrastructure, purchase of spares for maintenance of equipment, procurement of ammunition, etc.
Though public-private partnerships is encouraged, privately the government continues to retain its monopoly on research and development and defence production through the DRDO, the ordnance factories and the defence PSUs.
Several issues have been raised in the last one year, one such issue concerns the need for amending the policy to enable the MoD to demand offsets in specific area(s) rather than being driven by the vendors.
The Office Memorandum has created a debate among various stakeholders, particularly the Indian IT and software-related companies which see a loss of business to the tune of $10 billion.
The MoD is possibly of the view that allowing foreign companies to set up manufacturing and assembling facilities in India will stymie the growth of indigenous design and development activities.
Cancellation of the VVIP Helicopter Contract: Beginning of a Long haul?
While there was perhaps no option for the MoD but to do what it has done, it would be naive to expect the seller to acquiesce in forfeiture of the bank guarantees, recovery of the sums allegedly paid in violation of the PCIP (assuming that it will be possible to recover this amount) and to simply take the three helicopters back without demur.