Course 180- Building on Indian Defence equipment export success. ISS.1/May 10/2024

Prof. Prodyut Das

 

The increase in Indian Defence exports from Rs.686 crores in 2013-14 to Rs.21,083 crores in 2023-24 is good news. Adjusted to a common base we have i.e. a 1800 % increase over ten years. What makes the news better is:

1.      The increase was almost entirely due to policy and management changes.

2.      60% of the increase was contributed by the Private sector.

The Government has declared an export target of Rs,100,000 crores by 2030. Whilst feasible there is also the chance that it may become a case of “If wishes were horses, beggars would ride”. The Government, by its nature, lacks the necessary time, focus, continuity and therefore expertise that is required to run Weapons exports - the most competitive and cut throat of all businesses.

This sour caution comes because the way to Rs.1,00,000 crores of exports by 2030 is not continuous. A “more of the same” approach - will not work. As in quantum theory we have to make a series of quantum jumps in “energy of the industry” before we can arrive at the next plateau of exports. A government in an elected democracy- procedure bound and answerable to the Opposition, is not the best medium for injecting energy. It works for Animal Husbandry but not in the competitive unethical arena of weapons export. The only glimmer of cautious optimism is we still have some slack left in the present level.

The slack is there because the application of the remedy - the “Ownership by the Cabinet” was faltering, fault ridden and clumsy e.g. one being that in ten years, there have been three changes in the defence minister (RM). Justifications there may be but the changes affected the end results. The “success” is also because of the very unsatisfactory state of ownership prior to 2014; some of the older projects give the impression of being GoI funded scams.

The improved performance post 2014 was despite the Government providing just one of the missing vitamins i.e. “Ownership” which is the presence of Someone up there who cares about the results. Often disparaged as “Bean counting” it is always effective. Simple periodic tracking at the Ministry level of how Tejas Mk1a are in the Final assembly or why the Arjun trials are stuck up can be very effective; you don’t need to go to Harvard for that or wait for March year- end to be disappointed.

The second “vitamin”, and one that is still missing at Raisina, is Leadership. Leadership is a “personal” interest in attaining the objective to the extent that sapient “risks” are taken. Far too many local development projects e.g. the WhAP. The Arjun tank, the Tejas MK1B, the non- selection of an Indian Rifle for the Infantry- the list is as long as your arm- are symptoms of the lack of “Leadership”. Unfortunately, the structure is such that Raisina is both the final authority and yet lacks the wherewithal to provide “Leadership”- the forcing of the “tigers” and the “goats” to drink together from the same stream- as the Bengali saying goes. This lack of “Leadership” comes from lack of “continuity”- the equally necessary lack of “domain knowledge” being a by- product of lack of continuity. Domain Knowledge- not degrees- gives confidence to take risks. The knowledgeable will have acquired an ability to disdain conventional wisdom. For the “administrator” conventional wisdom is the lodestone. Lacking knowledge seeking the comfort of staying in a standard solution causes delays even when other delaying factors are not present.

Unfortunately decisions are taken by the “tourists”- Ministers and IAS babus - highly intelligent, competent, even formidable -but nevertheless “clerks” by training and upbringing; the knowledge people, are lower -preparing briefings and lurking in the wings with hopes of being called to explain something. The “tourists” take critical decision based on file notes made by the knowledge people. The weakness is anyone with an agenda e.g. the import lobby can confuse the issue. You really should read then VCAS Air Marshal Raghavendra autobiography “Panther Red One” to enjoy the farce that went/goes on.

Leadership” will not happen unless there is accountability. Without accountability -the incompetent will, with impunity, lobby for a job that calls for the competent. I have in mind the entire Tejas affair. With accountability those backing the Tejas project should have been show caused in 1988 i.e. after 5 yrs as to why the date of First Flight was April 1990 would not be met when the funds (Rs 560 crores (Rs. 7000 crores (in 2024 money)  was sanctioned in 1984 on that promise. It would have given us a chance to make a second start with the immensely more sensible HF 25 platform which had asked for Rs. 65 crore in 1978 ( 704 crores in 2024 money).

 iii) Weapons export is a full-time business; Behind the glamour it is hard work and being on one’s toes. Baba Kalyani is almost certainly more knowledgeable about Howitzers and more “powerful”  than the topmost five Govt. Officials charged with the exports of Howitzers combined. The problem of Government Officials no matter how powerful  they are un-empowered as an individual; a Cabinet secretary has to depend very much on the opinions of his colleagues.

iv)The current 2024 Lok Sabha elections have shown that even the people who should have 100% attention in running the business- have other priorities. The hard worked Mr. Rajnath Singh must be preoccupied with the Elections and Campaigning.  It is not good for weapons development which is why -in multi- party democracies- weapons development is  left to the private sector.

No businessman needs an invitation to make profits. The Private Sectors polite declining of participating in the AMCA SPV means that though new to the business they understand that the present structure simply will not work and they-the Private sector  do NOT work with “Socialist” money.

The Public sector with Public Sector Laboratories doing “research” is NOT the best way to get returns on the money spent. The concept of PSUs and Government Sector Labs was foisted on us to keep us uncompetitive. Space does not permit elucidation of the idea but I give a gist in the note 1. An analogy can be drawn with that of Pakistan and India. The present DRDO Plus structure in undemocratic and “unelected”- the process is controlled solely “by Birth”. Pakistan in a non-democratic form of Government has come to a certain pass; India for all its faults has stuck to an open Democracy has reached fairly respectable heights. Similarly, the continued stranglehold of the Government over the Weapons Industry has done nothing but Pakistan-ed us. We must democratize the process from the Zamindari of select Govt. Departments and their Naibs.

Weapons development must be looked at as development for a viciously competitive market. Performance in terms of all measurable standards must be world class.

1.      Whereas Industrial Goods for private use is designed to be very competitive price wise, Industrial Goods to be bought with Public Money are designed to be money spinners. They are crammed with features that justify insane prices. See pt.5 below.

2.      It will be wrong to take the specifications of the present 4^th or 5^th generation etc as anything sacrosanct. Adding super cruise to the AMCA  speciation's will only benefit the import lobby and some DRDO babus because money will be spent but nothing will be delivered with the present set up.

3.      The strong profit angle in the weapons trade is also like the popular board game of Monopoly, the aim is to end up as one set of financiers giving the customer a few controlled options. If Argentina has bought 40-year-old F 16s it is not because the 40 yr old F 16 is even remotely the solution to Argentina’s defence needs but it is the Monopoly gamer’s “choice”.

4.      The purpose of the “Monopoly”- to sell the most expensive weapons possible. The price of the world’s most sold fighter was in 2017 USDs about $17,000 /kgs. At that time a hand assembled Luxury western car – I think a Rolls Royce Silver Phantom (?)  retailed at about $ 250/kg. The maths does not add up.

5.       The shutting down of great design houses in Germany, France, UK and even USA has been blamed on increasing cost of development of the 3^rd. generation but actually must be seen as a part of this “Monopoly” game. The specifications were “plated” so that the development cost went up to a level unsustainable by small (unmanageable by those wishing to control the Monopoly) players. (Note2).

6.      The USSR, despite the handicaps of a Communist state unbrokenly developed much simpler “alternate” technology to counter these “over specified” weapons- usually with considerable success e.g. AK 47 vs M 16 or the MiG 21 vs the F 104 or the T 55 vs. The M48 Patton or the M 60. The T 54/55 series was smaller, lighter had a diesel engine, a bigger, stabilized gun, but had manual transmission whereas the US tanks had a ‘Stereoscopic Rangefinder” (This required careful s election of the gunner because reportedly a percentage of the recruits  lacked the degree of stereoscopic vision required. The USSR used stadiametric ranging and training), a petrol engine with automatic transmission, A mechanical “computer” , It can be said in sum that the more expensive US tanks put the money in to the wrong places. The Indian Army would not have had too much problem to tackle any M 48/M60 anywhere.

7.      The US specifications process, very comprehensively based on data, gets derailed as soon as it goes beyond the Brigadier level. (Note 3)  

8.      The absurdity between what is ordered (specifications) and what is accepted is illustrated by the story of the TSR2. The official British GOR 339 called for a supersonic at low level nuclear Bomber capable of taking off from a grass field (can a nuclear weapon be handled in a “rough field” environment?) capable of a 1000km radius of action. What was finally accepted, after the skulduggery and fiasco was a mixture of F4 Phantoms and sub sonic Blackburn Buccaneers! So what is so sacred about specifications even if the West has written it after much research. For India with much self -inflicted technical handicaps and blunders the "open" debating of specifications issued is imperative.

9.      The push for high specific ($/kg) profits is necessary because the small skilled population base in the Monopoly countries. Gold plating specifications- often to the point of absurdity- generate satisfactory revenues e.g.pt.2 above.

10.   Abnormal prices-as in Pharma- justified by supposedly high R&D costs. Again as in Pharma the formulation treats just the symptoms. Usually, raw unproven technology is incorporated eg the Sparrow missiles and Sidewinders in the Vietnam war or the Patriot missile in the Gulf War.

11.    Even when the weapon is successful the “gold plating” is unjustified. What was the cost to Iran of launching those 100+ missiles and what did it cost Israel to shoot them down?

12.   The US has a long- time offender in over specifications and unsuitable tactical doctrines. The outcomes of the Vietnam and Afghan wars indicate that weapons (over) specifications have no influence in the outcome.

13.   Situations where “Gold Plated “specifications did badly or were uneconomical were downplayed and “forgotten” – the Chinese PLA’s advance from Pyongyang to Seoul-in the teeth of overwhelming US air superiority in 1950, Vietnam and Afghanistan debacles were brushed aside as “asymmetric warfare”. Battles where there were other extenuating factors e.g. terrain were painted as great victories won solely by technology superiority e.g. Bekaa Valley etc so as to push the myth of effectiveness of “ gold plated” specifications.

What is needed is an overhaul of the system by which the Government identifies and funds weapons development. The Present structure just plays into the hand of the Import Lobby. Opinions from a small coterie of “the usual suspects” swings project fundings and bars honest re- examination. Fund obtaining politics unquestioned by debate due to hierarchical pressure and supported by a “vote bank” e.g. a coterie of university types and vendors has brought us to a state where delay- by decades- is a foregone expectation. New management practices – Weapons Sabhas and Fighter Panchayats at the start and “Independent Directors” from the Customer and other “Knowledge” people including people with ideas and caring tuppence for the Hierarchy- has to be tried.  

Given the absurdity of official specifications being a thoughtless copy paste of the general thinking and without thinking about developmental consequences and given our present state of inability what can be done?

a)      Look at specifications bottoms up. Does GTRE's trying to design an engine technical life of 4000 hours- “just like America” make sense when no one seems to know or care about the median life of the airframe in single engine low level operations in India. I have heard much about SCBs or FADEC or “Flat rating” but I have not heard of GTRE negotiating at all- let alone negotiating hard- with the IAF or IN at the ab initio stage about the TBO and TTL of a jet engine being linked to a databased wastage rate of airframes. It does not make sense to develop a 4000 TTL engine when the airframe’s L_80% life is 1700 hrs.

b)     DRDO has a vested interest in high specifications. It means more funds and excuses for delays.

c)      Reduce the dependence on the Government. It is too slow. Also, the IAF does not have an opportunity to engage intellectually with the Government R&D engineers even before the start of the project because -unhappy as it may sound- the DRDO Lab types may have Ph.Ds  on advanced subjects but they do not know the business and  the Customer’s habitat and habits.

d)      We do not lack funds; we lack simple management which really plays into the Hand of the Import Lobby.

e)      IF we really lack funds and facilities then focus on the requirements of equipment for the median air Forces- Argentina, Fiji, Mauritius, Tanzania, Kenya, Nigeria, Vietnam etc. Even preliminary investigation will show that the fighter menu is so vast that fighter design has stratified not into types but according to customers, there is a market that is kept “fallow” because it’s unit costs will not suit the Banks.

f)      Regarding systems there is also an “engineering boundary layer” where the amount of “technology” that can be put into a role is limited. The “trick” is to do the job completely at the simplest level of technology,

g)      By delving into Aviation history and Aviation lore with intelligent copying and basing on existing design risks, capital and time will be minimized.

Course 180

Given the fact we are the 3^rd largest weapons importer even the internal Market size is considerable. Semantics apart, the Pvt. sector’s unwillingness to participate in the AMCA is that the captaincy of the project by the DPSUs gets no confidence. Fundamental corrections to the system is required. Given the above situation what should the Private Sector do? Instead of heading North and follow conventional wisdom it may need to look South.  It must start with a fresh sheet of paper and do what the Government has been unable to do:

1.      Ignore the Indian Military as the seed customer. The catch is in Government procurement. The Import Lobby -entirely within the Government -uses this as a stranglehold by delaying and withering on the vine tactics.

2.      Ignore the top 10 AFs; focus on the market at the base of the Pyramid.

3.      Carefully examine what is really needed. The “Universal” US specifications is aimed not so much as to win wars as to make extraordinary profits for their MIC. This has changed the structure of the World’s Military Industries worldwide. Equally it means that great simplifications can be made without losing war winning capabilities.

4.       The Indian Private sector’s own experience has shown will not take much to develop and deliver. -60% of this year’s exports is from the “new” private sector-

5.       Focus on a “different” genre of products which would be difficult for the big five to compete.

6.      Let the Private Sector take the lead and let the Government provide the facilitation.

7.      Learn to use History and Copying to cut down development risks, costs and time.

The longer we cling to the myth of Defence Development should be a Government controlled affair the longer we will be in smug  “Socialist Poverty “ in this area-  remember black market in scooters or sucking up to a politicians for a Telephone -and then sucking up/bribing Rs,20 p.m. to a “linesman” to keep the line “open”? It is unbelievable now but the change to having a Private sector led Defence Industry will make the present situation just as incredible.    

 

 

Note 1.

The conventional Marxist History our generation taught that M, Gandhi got us Independence with his devotee Jawaharlal Nehru with Non- Violence. Quite absurdly it wants us to believe that when 1947 the British shook hands, handed us the keys of the Viceregal Lodge and walked off into the sunset never looking back at what was the Jewel In Their Crown.

Truth is the West -mainly The United Kingdoms and Czarist ( later Soviet)  Russia were engaged in steady struggle to control the Indian Peninsula with its inexhaustible natural wealth and intelligent man power. After the exhaustion of the WW2 when it was no longer possible to physically hold on the region the exhausted rivals - joined by the US- were despite their bitter rivalry mutually agreed to ensure that the about- to- be independent Nation did not become a future rival like Japan whom they had -almost on the brink of terror but for the atom bomb - just quelled with so much effort.

Thus, the Partition and continued efforts at further balkanization of  India and forcing a pliant then leadership into adapting a highly inefficient and unnecessary Socialist pattern of Society was the result- not from genuine need but to continue India as Industrially weak and backwards- a source of raw materials. Though the Indians, even under the draconian restrictions of a non- benevolent Raj- raised Capital, formed companies and by 1947 had set up and run modern Industries profitably in the range from Aircraft to Steel, Locomotives, Ships and Telecommunications a Leftist set of Economist gave India a “Socialist Pattern” of Society that- note well for it was no coincidence- could be overthrown in 1993 only after the collapse of the Soviet Union and after PM Thatcher admitted that the UK was not a great Power any longer and of course we had to mortgage our own gold to remain credit worthy.

Note 2

The 3^rd generation-incidentally the most abused most far removed from realty of all fighter generation and requiring extensive -re-engineering to make it useful- was triggered by possible delays in the development of SAMs. Having got the platform right this was marketed as the only platform available. Low-cost options which were available and could have done the job- interception of the TU 16 or B 52 etc an would have been more suitable for other Air Forces e.g. the Gnat/ Taon/ Hispano Messerschmitt 300 were not funded/ developed, (How many know Maurice Brennan had proposed a VG Gnat Mk7 or Switzerland had tried the ALR Piranha)? the companies bought out and the projects swept under the carpet. Once developed the 3^rd generation- an exclusive NATO/WARPAC need- was pushed as standard equipment- nothing else being available by the foreclosure of possible alternatives. It resulted in the Lightweight F 104 designed to combat the superiority of the MiGs was laden with additional equipment to become the F 104G which the Luftwaffe used to lose some 120 pilots. The answer we do not know is who distorted specifications so that simpler weapons- and the companies capable of designing them- went out of the reckoning.

Note3  

Had the US consulted a good astrologer he would have told then to concentrate on the relatively simpler Grumman A-6, the NA OV- 10A Bronco and the Fairchild A 10. The US lost about 5000 aircraft in 10 years of warfare to very low- cost North Vietnam/ Viet Cong weapons. Blamed on “Asymmetric Warfare” the truth that is being hidden is “Swing role” warplanes of great ability do not make sense when it comes to “Frontier Arithmetic” and cost of losses.

Note4.

The mess continues- no one knows when the Mk1A will come-not because the design problems are particularly difficult. The delay is because the system allowed amateurish mistakes to be made- over decades- within a silo and then that silo is protected from scrutiny. Honest admission audit and rectification will take two to three years at the most. By current “Babugiri”- including DRDO /ADA/HAL- we will not get 24/yr. even by 2030. The Tejas problems were not funds and resources or Technology. it was a failure of Domain Knowledge and Leadership. The Mk2 will need a lot of scarce luck to not go the same way and the AMCA won’t go.