By Natalia Freyton
From a European standpoint, India is currently sitting where certain Western defence apparatuses were, just a few decades ago. How to increase military potential, while maintaining control over military affairs? The global standard, just a century ago, was for military engineering to be incorporated directly into armies. But this model quickly showed its limits. By entrusting military engineering to public organizations that lacked the concepts of optimization and financial efficiency, nations quickly realized that they were not drawing sufficient military potential from whatever military budgets they had at hand.
Russia experienced this at its own expense when, throughout the Cold War, they were systematically one step behind their American nemesis, despite lavish military spending.
In the case of India, an additional challenge is addressed: until now, little or no military equipment was produced domestically. India’s economy is flourishing and has been one of the fastest-growing economies (1) for the past decades. The Indian government wishes to achieve sovereign independence by sourcing a large share of its defence equipment within its borders. Should this be achieved, New Delhi would gain both increased independence from foreign nations and the start of a massive circular economy. A survey of nations that have undergone this transformation before, or who share certain common parameters, and of their successes and failures, will give India important pointers on how to go forward.
Transformative Edge, Business Friendly
The US comes first to mind, of course, whenever defence industries are being discussed. Indeed, its military industry is flourishing, and the equipment it produces is generally second to none (despite a few caveats – see below). India shares with the US its size, its federal structure and increasingly comparable economies (which could, to a certain extent, give way to a flurry of private-sector initiatives, and the establishment of large groups). The American defence industry’s articulation, and its embedding within the global defence systems, will give India precious cues as to the possible pitfalls.
As high-performance as it may be, the US defence industry comes at an obscene cost to the taxpayer. Not only does India not collect comparable taxes from its citizens, but even if it could, India must make every rupee count efficiently if it is to address both its modernization program and the defence of its territorial integrity. Much efficiency is lost in the American system, through the multiplicity of decision-making offices and insufficient harmonization. In short, the American defence market is so abundantly rich that numerous, non-integrated companies pop up everywhere in the nation, and competition quickly leads to duplication of research efforts.
Also, lavish military budgets have brought certain military programs to overshoot their budgets in a way that would be catastrophic to any other nation, India included. The F-35 and the USS Zumwalt programs are two examples, among many others, of how mismanaged complex military projects can spiral out of financial control. This is blamed partly on the hugely intrusive defence lobby, and its deep penetration into US institutions, in both chambers, the systematic recruitment of retiring generals by the private sector, and pre-retirement arrangements that lead to conflicts of interest (2).
However, the US manages to maintain its technological leadership thanks to other sound structures and mechanisms, such as DARPA (3) and the tradition of the DOD to entrust various prestigious universities (4) with advanced defence programs.
In the end, it must be said that American defence equipment is generally combat proven, thanks to extensive military activity, high-grade and successful in exports. The US government uses its long reach to boost arms sales to its allies, by including them within diplomatic dealings. It is therefore very tempting for the US to push India towards the same defence model – and what the US wants, the US usually gets. But it is important for India’s future and sovereignty that, if it does go for the high-tech and business-friendly defence model, it should do so on its own terms.
Robust Technological Superiority, Yet Limited Role
Germany, on the other hand, yields many valuable lessons on the economic, political and strategic side of things, as its defence industry is considered by the entire world as a technological and business crown jewel, but provides its homeland with little or no effective protection. The German defence industry is an economic and technological success story, but with few military and operational results. Since the end of WWII, Berlin has shown great reluctance in engaging in any form of military operation, leading the Bundeswehr (German Federal Defence) to lose a great amount of its edge. This is naturally understandable given the historical context, and the German constitution (5) limits military action very strictly.
The German military industry, however, is one of the most advanced and profitable in the world, thanks to its industrial quality levels, and its available technology. More importantly, the defence industry is led by a few giants that rely on a resilient network of high-performance mid-sized businesses. This has contributed to the phenomenal export figures of military equipment, such as the Leopard tank, until recent operational shortcomings tainted its military reputation.
Its army is modest in size, and doesn’t have much significant military experience on which to rest. It remains the perfect tool for an unlikely situation: a Cold-War-type deployment of heavy armour over the vast plains of Europe against a phantasmal Russian threat. This anachronic configuration is in fact the result of a deeply imbalanced playing field in the defence market. The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) (6) is one of the central procurement agencies of the Bundeswehr, and yet plays a limited role in defining actual military needs. The defence industry’s costly and elaborate solutions are therefore imposed on the Bundeswehr. Some of them are decent, like the Leopard 2 A7 tank (7); and some are disastrous, such as the most recent frigates (8). In the end, the viewer is left with a big question: how can one build a solid defence model, when one has virtually no experience of defence?
The answer likely lies in the fact that Germany relies, and will continue to rely, for the foreseeable future, on the American shield for any serious defence matters. Reuters reported (9) German Defence Minister Annegret Kramp-Karrenbauer as saying, in December 2020: “The idea of a strategic autonomy for Europe goes too far if it nurtures the illusion that we could ensure Europe’s security, stability and prosperity without NATO and the U.S.” Germans have rebuilt their military industry as a mainly economic asset, and remain, to this day, effectively under protection of the United States. Their military sovereignty is consequently limited, which effectively reduces the relevance of such an example, for a nation which cares for its sovereignty.
Striking the Right Industrial and Strategic Balance
France, however, appears as an interesting military industrial model. While not a perfect one, it provides interesting clues for industrial and strategic balance. Paris’ diplomatic activism – and sometimes, even, trouble-making – may be upsetting to larger nations, but it remains that France is the only European nation to have achieved the feat of finding a sustainable balance between public decision-makers and operators on the one hand, and private contributions and development on the other.
Until the 1990s, France also had articulated its military design and manufacture from within Army structures. At the turn of the century, such tasks were entrusted to the private sector, whilst keeping a firm State grip on strategic leadership. Military commanders and the State are in charge of expressing needs, controlling design and manufacturing outcomes, and constantly feeding back operational information to industrialists. The private sector, on the other hand, is in charge of coordinating the ever-increasing number of contributors to the large military programs and ensuring optimization of said programs.
Amidst this complexity, the French procurement agency (Direction general d’armement, DGA) (10) ensures the equilibrium of the entire apparatus, between technological sovereignty, exporting potential and preservation of the industrial network. It strives to optimise the added value of all stakeholders. The level of interaction between industrial partners is high, and the DGA orchestrates the free-flow of information and energy between think tanks, operational units, industrial firms and decision-makers, while avoiding conflicts of interest. It is also in charge of preserving sovereignty, and involving the State only when technological independence is at stake (as it did for the sale of optics-expert Photonis (11) or for the Man Marine Solutions future (12)).
Although it may be more efficient on paper than in reality, this model seems globally efficient, both economically and strategically. France therefore enjoys the enviable position of having renounced no capacity whatsoever, despite substantial downsizing, and is punching way above its weight (13) in exports. It has unmatched operational capacities in Europe, despite military budgets comparable to neighbouring nations and far below US, Chinese or Russian ones. The system, however, is not flawless. French military budgets place an effective cap on the actual size of the French army, and the large size of the main industrial firms tends to bar access to the market for smaller enterprises, which deprives the Army of their innovative, nimble, and sometimes cheaper solutions.
India is engaged in a noble quest: modernizing its defence, preserving its sovereign territory and protecting its population. Such an objective, naturally, must be thought through and carefully laid-out. India will no doubt look at what other countries have done and how they went about modernizing their military industry. Any country serious about its sovereignty – and India certainly is – will accept the fact that its defence model must be uniquely shaped around its specific characteristics, culture and interests. Of all international observations that India will surely carry out, an essential rule of thumb will stand out: the public sector must keep control of the input (expressing industrial needs) and the outcome (ensuring that manufactured equipment actually fits the bill). Whether the manufacturers are within the public or private sector, governmental decision-makers must keep from meddling in industrial processes – as orchestra conductors have no business playing the violin.
– The writer is a defence and security industry consultant having varied experience working with medium and large companies majorly in European market. The views expressed are personal and do not necessarily reflect the views of Raksha Anirveda