Fractured/Earth

After IT, BPO, and Pharma, the NDA has projected weapons manufacturing as India’s latest economic engine. It aims to develop an indigenous arms manufacturing sector to boost self-reliance in weaponry and grab a part of the over-$600 billion global arms and military services trade.

Accordingly, the government is using India’s financial muscle, as the country with the fourth-highest defence budgetglobally, to lure international weapon-makers (OEMs – Original Equipment Manufacturers) into technology transfers and local manufacturing, aggressively reshaping India’s weapons manufacturing sector. To this end, in 2020, it introduced new localization requirements, barring foreign manufacturers from selling directly to India’s armed forces. They now need to tie up with Indian firms and make their products in India. Simultaneously, the NDA invited India’s private sector into weapons manufacturing, saying the country needs to reduce its dependence on Public Sector Undertakings (PSUs) in defence.

Despite much of this transformation carrying far-reaching consequences — like the rise of a private sector-led military-industrial complex — most discussions on this shift have been limited to defence and national security circles. Wider conversations have been sporadic. Once, when it emerged that Indian firms like Adani, Kalyani Strategic Systems, and Munitions India had made the drones, shells, and firearms Israel is using on Gaza. And again, when the India-Pakistan clash last year resulted in a spate of reports about India’s weapons manufacturing progress.

Along the way, however, two larger questions have been missed.

First, it needs to be assessed whether the NDA’s assumption that transfer of technology through joint ventures can help India’s private sector muscle into the global weapons manufacturing trade is working. As books like Apple in China show, transfer of technology agreements can help erstwhile suppliers emerge as new competitors – creating an outcome where, as this report will show, manufacturers are now unwilling to share core technologies.

Second, as reporter Andrew Feinstein writes in The Shadow World: Inside The Global Arms Trade, bribery and the use of political connections have been integral to the global weapons trade. Riding on these, countries have been pushed into a “permanent war economy” where resources are diverted from “crucial social and developmental needs”. Today, as the private sector enters the weapons manufacturing sector, India too is seeing the rise of a domestic, profit-seeking military-industrial complex.

Apart from needing jobs, India is also prone to elite capture and a weakened rule of law. And so, will this domestic military-industrial complex create jobs and forex earnings, or will it drag India into the same quagmire that Feinstein described?

And here we go. Late in 2024, I began looking at India’s plans to emerge as a global supplier of weapons — a sad drop in ambitions for a country which wanted to, at one time, be a world class manufacturer of cheap drugs for the global south. That report is finally out. Do take a look: https://thepolisproject.com/read/india-defence-sector-army-weapons-investigation/.
One of the better reports I have filed, this one. It is long, about 12,000 words. But do read.