There are a number of Known Unknowns to be flagged at the end of the DefExpo 2022 and the impact that these have on operational readiness and modernisation of the Indian armed forces which need discussion, but first a preview of the event.
India’s premier defence exhibition, DefExpo 22 held for a period of five days in the month of October 2022 from 18th to 22nd in Gandhinagar the capital of the State of Gujarat had many firsts to its credit. DefExpo 2022 also had multiple missions, showcase Indian defence industry, emphasise on Make in India or Atma Nirbhar Bharat, expand defence cooperation in areas of influence that is the Indian Ocean Region, increase opportunities for export and give a fillip to India’s defence industry through B to B [Business to Business], B to G [Business to Government] and G to G [Government to Government] engagement. This was the also first time that the DefExpo was held in the state of Gujarat, Prime Minister Narendra Modi’s home state which is going in for elections in the next few weeks.
A defence space mission was launched with by the Prime Minister, which had 75 challenges to be taken up by the industry in the days ahead. 1340 Indian companies registered for the DefExpo 2022 making it the biggest defence exhibition to date as per the Ministry of Defence.
A call for investment in the form of Invest for Defence was also pitched as a marquee event of the ministry. Importantly, prominence was given to the US India Business Council which held a seminar in which the Defence Minister Mr Rajnath Singh participated underlining expanding India U.S. military technical cooperation.
The Known Unknowns
The absence of Russian companies was evident which could be because of two factors. Firstly, the overall engagement in War in Ukraine, which continues to be called a Special Military Operation in Moscow. The second factor could be Western sanctions, imposed on Russia, which prevents companies from participating in such events and also makes it difficult for organisers to accommodate them. This was one of the unstated reasons for the sudden postponement of the DefExpo 2022 which was to be held in March at the same venue.
Absence of Russian companies would be a major loss for the Indian defence sector as despite the transition from Russian military equipment to Western as well as indigenous, Indian Armed forces continue to hold significant numbers of tanks, fighter aircraft and submarines which need support of OEMs for service ability as well as operational readiness. Given the absence of Russian companies, how this will be impacted remains to be seen?
More over a number of MOUs and contracts were signed by the Tier 1 and 2 companies during the DefExpo for indigenisation of spares, ancillaries and modifications. The complete absence of Russian companies may have an impact which has to be assessed separately. The visit of India’s Foreign Minister Dr S Jaishanker to Moscow is ongoing (07-08 Nov) which may provide some indication of which way the wind is blowing. Dr Jaishanker is slated to meet Deputy Prime Minister of the Russian Federation and Minister of Trade and Industry, Mr. Denis Manturov, his counterpart for the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) which is also responsible for the defence industry. How this meeting goes needs to be looked at carefully apart from that with the Russian Foreign Minister Sergei Lavrov.
Another aspect which has received less attention is the opportunity for exports that India would have had in case the defence industrial base was able to cater for the surging demand from countries in the West as well as Russia.
With Europe having increased capital acquisition budget by half to one percent of the GDP, sourcing from beyond is inevitable. India's defence industrial base has not developed to be able to provide to other armed forces. On the other hand countries as South Korea have been able to benefit from the demand with a surge in defence exports to Europe. Export of Pinaka multiple rocket system to Armenia is a small dent that India has made in the large export market that is emerging.
Follow up of the MOUs signed during the DefExpo 2022 is also essential by reaching agreements and contracts. The main contracts signed during DefExpo 2022 were by the Defence Public Sector Undertakings such as Hindustan Aeronautics Ltd for the HTT 40 trainers with the Indian Air Force, others were smaller contracts with Tier 1 and 2 players which must be taken forward.
Finally, while the focus was on indigenisation, Make in India that is manufacturing in India, apart from the hype on Atma Nirbharata, there is adequate scope for foreign participation in joint projects to the extent of 50% on cost basis. While the Ministry of Defence highlights allocation of almost 60 to 70% of the capital budget for acquisitions from the Indian defence industry with at least one third of this from the private sector how this figure is worked out in unclear. Thus the scope for Make FOR India remains.
All in all, as they say, the proof of the pudding is in the eating. Follow up on various signups in DefExpo 2022 would be of essence.