Achieving balance thorugh weapons

Five of the top 10 largest importers of major weapons are in Asia: India, China, Pakistan, South Korea and Singapore, according to the Stockholm International Peace Research Institute (SIPRI). They accounted for 30 percent of the global volume of arms imports in the past five years. But India stands out in this category as it alone accounted for 15 percent of global arms imports during this time.

In fact, India imported more than three times more weapons than China, which has now become a significant weapons producer and supplier. And although Saudi Arabia is currently the world's largest arms importer, India is projected to be ranked second in 2015 and 2016 based on existing contracts, according to global analytics firms IHS.

In a DW interview, Amit Cowshish, a former financial advisor to India's Ministry of Defense, explains why India has become such a huge arms importer, why the indinegous arms industry is not able to meet the demands, and what this has to do with India's regional and global aspirations.

DW: Why is India one of the world's major arms importers?

Amit Cowshish: India shares a long and disputed border with China to its north. China is both economically and militarily stronger than India and got involved in a major border war with India in 1962. It has been active on the disputed border and resolutely following a so-called "string of pearls" policy of encircling and containing India.

China is an "all weather friend" of Pakistan, which too has a territorial dispute with India. Pakistan has been involved in at least four major military conflicts with India - in 1947-48, 1965, 1971 and 1999. It also supports secessionist activities in the Indian state of Jammu and Kashmir, and terrorism elsewhere.

Primarily, therefore, it is the situation in its immediate neighborhood that requires New Delhi to be militarily in a position to thwart a possible two-front pincer attack in the worst-case scenario. India also needs the capability for securing the maritime trade routes.

This requires acquisition of modern and state-of-the-art military technologies and capabilities. The Indian defense industry, both in the public and the private sectors, has not been able to meet this challenge. Hence the need for import and India emerging as one of the world's largest importers of arms in the recent years.

How has the Modi-led government made it easier for foreign weapons manufacturers to invest in the country?

The focus of the present government is more on economic development and welfare rather than military build-up. This explains why there has been no significant increase in the allocation for defense in the two budgets presented by this government so far since it came to power in May 2014.

In fact, the government has shown pragmatism in defense spending, as would be evident from the decision to go slow on raising of a mountain strike corps which had commenced in January 2014.

To my knowledge, no major defence deals have been signed so far between India and any other foreign country, though there are many significant deals in the offing. India raised the Foreign Direct Investment (FDI) cap in the defence sector to 49 per cent last year; FDI beyond this limit can also be permitted by the government if it brings in state-of-the-art technology.

There is a greater clarity now about the requirement of industrial license as a list of defence items that can be manufactured only after obtaining a license has been notified by this government.

Acutely aware of the fact that India stands at the 142nd position in the global index of ease of doing business, the government has repeatedly expressed its commitment to make it easier for companies to operate in India and seems to be working towards achieving this objective.

In an attempt to make the defense procurement simpler and faster, the Indian ministry of defense is in the process of reviewing the existing procedures, including the offsets policy. Various state governments in India have formulated comprehensive plans to promote defence manufacturing.

Why are Indian firms seemingly unable to meet many of the country's defense needs?

The defense sector was opened to the private sector in 2001, but since there were very few private sector companies that could meet the requirement, the orders normally went to the defense public sector undertakings and shipyards.

Uncertainty about the orders, complicated procurement procedures, absence of a level playing field vis-à-vis the public sector, economies of scales, absence of an eco-system conducive to defense manufacturing, and, an element of bias in favor of the public sector were - and continue to be, to a large extent - some of the factors that prevented many private players from building a strong business case for entering the defense manufacturing sector in a big way. There is no doubt, however, that the situation is slowly changing.

Besides defending the national territory and the country's interests in the case of a conflict, what other purposes does this modern weaponry serve?

The modern weaponry is meant to strike a balance with the superior weaponry and technology that India's adversaries, with territorial aspirations, already possess or have easy access to. So, yes, it is basically deterrence.

But India also has aspirations of being counted as a global power, which entails power projection, dealing with out of area contingencies, humanitarian assistance and disaster relief, evacuation of non-combatants from areas of conflict, and anti-piracy operations. India can play these roles only if it possesses modern weaponry and other capabilities.

What measures should the Indian government undertake to reduce the country's dependency on foreign-made weapons?

The Indian ministry of defense had introduced a "Make" procedure in 2005. This was intended to promote indigenous research, design and development of the prototypes of high technology, complex and futuristic systems. The lead role was to be played by the Indian industry - both in the public and the private sectors - with back-end tie-ups with the foreign companies.

Unfortunately, the system did not work as expected. The present government is actively engaged in revisiting the procedure in consultation with the Indian private industry. It is also taking steps to revamp the Defense Research & Development Organization and modernize both the defense public sector undertakings and the ordnance factories.

All these steps, coupled with the efforts being made to improve the eco-system (that includes issues related to the process of industrial licensing, FDI, land acquisition, taxation, IPR protection, exports, etc.) should help India reduce its dependence on imports in the long run.

Asia accounts for nearly a third of global arms imports. To which extent are we witnessing a regional arms race?

While it cannot be denied that the major countries in the region are engaged in enhancing their military capabilities, it is nowhere near the dimensions of the arms race witnessed during the Cold War period.

This is because, to a very large extent, the primary objective of most of the Asian countries is to acquire military capabilities for defending their territorial integrity, claims and other economic interests rather than world domination, which is what propelled the arms race during the Cold War era.

Amit Cowshish is a former Financial Advisor (Acquisition) to India's Ministry of Defense and presently a Distinguished Fellow with the Indian Institute for Defence Studies and Analyses.