Defence Procurements - A Shot in the Arm for Armed Forces

By Anantha Narayanan K 17-Mar-2018

Over the past few years, the defence sector of India has been going through a lot of changes. The most important among them have been the various procurement policies and the revamped ‘Make’ procedures unveiled by the Union Defence Ministry with an aim of addressing the call for the modernisation of Indian armed forces. Ever since the arrival of Modi government in 2014, enough impetus has been provided to the defence industry with a prime motive to enhance the defence manufacturing. On the lines of the Make in India programme, the central government has been pushing Indian defence players to encourage the defence production.

Though all these policies have boosted the sector, the long demands of the armed forces regarding the upgradation of their weaponry, from basic assault rifles to the heavy artillery, were dissolved in various corruption stories. Reportedly, the country's defence procurement regulations including the ones that restrict arms deal with single bidders have forced the government to cancel $25 billion worth of tenders in three years. But finally, the Defence Ministry has heard the calls for modernisation of armed forces. The Defence Acquisition Council (DAC) has recently cleared an array of proposals to procure arms and weapon systems for all the three forces. These procurements are undoubtedly a major shot in the arm for Indian armed forces, which have been struggling to cope with the aging weapons and equipment.

The need for upgraded weaponry is very much crucial for ensuring the security of India, especially at a time when cross-border terrorism and conflicts at the North and North-Eastern borders are on the rise. All the three forces, The Army, Navy and Airforce have been facing the lack of modernisation of combat capabilities. It is high time the Indian Army’s Indian Small Arms System Rifles (INSAS)and AK-47 rifles got replaced by modern assault rifles. The personal kit of the soldier that comprises of bulletproof jackets, helmets and boots needs replacement with lighter kits that include steel helmets and enhanced bulletproof jackets.

The army has been using obsolescent equipment, especially tanks, infantry fighting vehicles. The need for future-ready combat vehicles is inevitable for the ground forces. The aging T-72 and T-90 tank fleet needs to be replaced with new tanks and DRDO’s Arjun Mark II Tank is still in the trial phase. The Indian Army mostly rely on the outdated Bofors artillery guns. Recently, the government has cancelled the deal with Israel’s Rafael to buy Spike anti-tank missiles, after DRDO promised to make indigenous missile in four years, making the army to wait more.

Though the strategic partnership chapter of the Defence Procurement Procedure 2016 mentions the shortfall of equipment in the services, the actual situation is much worse. The Indian Navy has already “requested for information” on naval utility helicopters, naval multi-role helicopters, submarines through Project 75(I) and multi-role carrier-borne fighters for its aircraft carriers. For the Air Force, the plan to buy 36 Rafale fighters from France is still not confirmed and even if 36 Rafale’s and 83 LCA Tejas are inducted, there will only be 31 squadrons against the required 42. Hence, the need for more immediate procurements is inevitable.

The recent procurements, though will not clear all problems, has significance in the current scenario. Earlier in December, the Defence Minister Nirmala Sitharaman has approved the contract proposals for the communications and weapons advancement of both Navy and Army. The projects, cleared by the Ministry of Defence, include the procurement of simulated training solutions for the Navy’s P-8I long range maritime patrol aircraft, and Low Intensity Conflict Electronic Warfare System (LICEWS) for the Army, at a total cost of Rs.2419.32 Crores. Nirmala Sitharaman has also cleared a proposal for the procurement of LICEWS from Ms Bharat Electronics Limited (BEL) for Rs.470 crore. This system will equip Indian Army with upgraded communications infrastructure to effectively deal with advanced communications systems being used by terrorist groups.

Through the P-81 Training Solutions contract worth Rs.1950 Crores, the Indian Navy will buy full motion simulator from US defence firm Boeing to train aircrews for missions on the P-8I submarine hunter planes. This training solution accurately simulates P-8I aircraft and mission systems.  It is expected to help the Navy in the training and realistic rehearsal for sophisticated missions involving P-8I aircraft, at a fraction of the cost of live aircraft training. The P-8I ‘training solution’ contract includes 10-year comprehensive maintenance service.

The P-8I used by the Indian Navy is a variant of the P-8A Poseidon of US Navy. Currently, the Indian Navy has a fleet of eight Boeing P-8I planes at the INS Rajali in Tamil Nadu. They have been fully integrated into Indian Naval operations. The Navy has ordered four more P-8Is - a military derivative of the 737-800 commercial aircraft in 2016, and the delivery will begin in 2020. The planes have replaced the Soviet-era Tu-142 fleet, are expected to be in naval service beyond 2050.

Later in January, giving the firepower-starved army a great relief, the DAC, chaired by Nirmala Sitharaman, has decided to put an end to the decade-long wait of the soldiers to get modern firearms. The DAC has decided to make the procurement of 72,400 assault rifles and 93,895 carbines for Indian Army at the cost of Rs.3547 Crores on 'fast-track' mode to enable the defence forces to meet their immediate requirement for the troops deployed on the borders. The assault rifles will be of 7.62mm calibre, while the carbines will be of 5.56mm calibre. Both the deals have been repeatedly cancelled in the past due to lack of cost-effective tenders.

And in February, the DAC has announced the latest defence procurement by clearing the proposal worth Rs.15935 Crores to shore up the Army’s infantry firepower and other deals. The approval includes the procurement of 16500 of Light Machine Guns (LMG) for all the three services through the Fast Track Procedure at a cost of Rs.1819 Crores, which will meet the immediate operational requirement of the soldiers across the border. The approval of the procurement of 7.4 lakh Assault Rifles for Army, Navy and Airforce has also been made by the DAC. They will be ‘Made in India’ under the categorisation of 'Buy and Make (Indian)', through both Ordnance Factory Board and Private Industry at an estimated cost of Rs.12280 Crores.

The DAC has also approved the Rs.982 Crores worth procurement of 5,719 Sniper Rifles for the Indian Army and Indian Air Force. The ammunition for these high precision weapons, to be bought with ‘Buy Global’ categorisation, will be initially procured and subsequently manufactured in India. The 8.6mm sniper rifles, which have an effective kill range of 1,200-metre, will replace the Army's old 7.62mm Dragunov sniper rifles with 800-metre range. The Dragunov rifles, bought from Russia in 1990, lack the modern magnification and sight systems as well as bipod stands, and their ammunition is very expensive.

In order to enhance the anti-submarine warfare capabilities of Indian Naval Ships, the DAC has approved the procurement of Advanced Torpedo Decoy Systems (ATDS). The 'Mareech' system, developed indigenously by Defence Research and Development Organisation, has successfully completed extensive trial evaluations. The 'Mareech' systems will be produced by Bharat Electronics Limited, Bengaluru at a cost of Rs.850 crore. Though all these approvals are the Acceptance of Necessity (AoN), the first step of the Defence Procurement Procedure, which can take years, it is still hopeful for the forces.

On 20 February 2018, the Defence Acquisition Council has accorded approval to Capital Acquisition Proposals of the Services valued at over Rs.1850 Crores. These include procurement of essential quantity of Infantry Combat Vehicle (BMPs-2/2k) for Mechanised Infantry and other Arms and Services at an estimated cost of over Rs.1125 Crores from the Ordnance Factory Board (OFB), aimed at meeting the operational requirement of the troops in rapid deployment of Mechanised Forces. For Navy, DAC has also accorded approval for procurement of one Survey Training Vessel (STV) for meeting it growing 'Hydrographic Survey' needs in ports, harbours, Exclusive Economic Zone, etc. The construction of the vessel is to be undertaken under Buy (Indian-IDDM) by Indian shipyards at an estimated cost of Rs.626 crores.

Another important policy taken by the Defence Ministry, to promote the participation of private players in defence manufacturing, is the simplification of the Make II category of the Defence Procurement Procedure. The simplified procedure, which is more industry friendly, with minimal government control, will boost the Make in India initiative in the defence sector. With the revised procedure, the Ministry of Defence can accept suo-motu proposals from the industry and also allow start-ups to develop equipment for Indian Armed Forces. It will enable greater participation of Industry in acquisition of defence equipment and to promote innovative solution.

The salient features of Make-II procedure have done away with the concept of selection of two Development Agencies.  All the vendors meeting the minimum qualification criterion have been allowed to participate in the process. The eligibility criteria in terms of parameters such as Profitability, Minimum period of registration of company, Minimum Credit rating requirement, etc, has been relaxed for participants.  Eligibility criteria for start-ups has further been relaxed. Documentation requirement at various stages of the process, has been minimised and timelines for various stages of process have been reduced.

As per the earlier ‘Make II’ procedure, only two vendors were shortlisted to develop prototype equipment. Now, all vendors meeting the relaxed eligibility criteria will be allowed to participate in the prototype development process. The vendor will not be required to submit Detailed Project Report. After accord of approval of the ‘Make II’ project by the council, all clearances will be accorded at Service HQ (SHQ) level.            

To hand-hold industry and start-ups, SHQs will now setup project facilitation teams to act as the primary interface between the SHQ and the industry during the design and development stage. These teams would provide technical inputs, trial infrastructure and other facilities as required by the vendor. Even if a single individual or firm offers innovative solutions, the SHQ will now have the option to accept and process the vendor’s development initiative. SHQs will be allowed to hire domain experts/consultants from private sector to increase outreach and enhance awareness among the industry. Most importantly, there will be no foreclosure of project after the project is sanctioned, except on default by the vendor, to ensure that the successful vendor has assured orders.

For acquisition of defence equipment and the modernisation of the Armed Forces, the procedures prescribed in various manuals and rules, including the Defence Procurement Procedure – 2016 (DPP) and the Defence Procurement Manual 2009 (DPM), are followed.  The Indian Armed Forces follow an approach of continuous training of its officers wherein each officer at different stages of his / her career undergoes various training courses of different contents and durations. As part of these courses, the officers are provided introductory training in various issues concerning procurement. This training is both built into the curriculum and covered by means of lectures by guest speakers.

Besides, training on financial management at macro level is provided to the officers which also covers various aspects related to defence procurement. Specialist courses are also conducted at Service, Tri-service and Ministry of Defence level at Material Management Institute of IAF, College of Defence Management of IDS and Defence HQ Training Institute, Ministry of Defence. All these assist in developing the required knowledge base among the officers for handling issues related to defence procurement. With the support of government the announced procurements should be completed at the earliest to make the armed forces combat-ready with advanced weaponry.