The Indian Army is undergoing the process of transformation. This, if realised, would become one among the critical factors that will assist India achieve the ability to secure its national interests. A few issues are worth flagging, even as the process is underway.

An efficient, transparent PPP policy dovetailed with an effective FDI framework will not only ensure that state-of-the-art defence equipment is procured but will also be instrumental in enabling transfer of technology.

India’s increasing reliance on FMS route is indicative of its desperation to bridge the gaps in its defence preparedness and shows the weakness of the Defence Procurement Procedure.

During application of prescribed procedures, many contradictions and ambiguities crop up, resulting in delays in decision making and, in some cases, to even faulty decisions.

With the growth of the public sector in Defence Production a large number of industrial units in the Private Sector has also grown with varied scales of operation in areas like outsourcing of raw materials, components, sub-systems, assemblies and sub-assemblies.

If India does not modernize in an evenly spread out manner, it will be faced either with the prospect of its armed forces not being prepared, or rushing to make purchases amidst crises, or creating needless hysteria when frenzied modernization occurs.

Even as the new amendments incentivise domestic companies to enter defence production, the government has made it clear that it wants a competitive environment in defence industry.

The above question arises in the context of publicly known government plans of arms procurement amounting to over $64 billion1 as part of the modernisation programme of the armed forces. The majority of these acquisitions will obviously be from abroad and will be concluded in the next five years or more.