Tag: manufacturing

Welcoming Putin

New Delhi should treat the Russian president with the usual respect

Samanth Subramanian of The National asked me to comment on Vladimir Putin’s visit to India. My response:

Putin’s visit is part of a longstanding tradition of bilateral visits. It comes at a time when there is greater convergence of interests between India and the United States, than between India and Russia. That said, Russia bears greater responsibility for the divergence in relations with India, for it has almost gratuitously pursued an arms-sale relationship with Pakistan. Those sales have little utility other than sending unwelcome signals to New Delhi.

New Delhi should welcome Mr Putin with great warmth and the traditional respect, despite his recent actions. Russia has been and can be a useful partner for India. For his part, Mr Putin would do well to reflect on how Russian industry can take advantage of Mr Modi’s “Make in India” initiative, especially in the defence and technology sectors.

Samanth’s article is up on The National’s website.

The world’s punching bag

The fault, dear Mr Naik, is not across the Himalayas

Mint has a very good editorial in response to the accusation that China is “systematically killing” Indian manufacturing.

Admittedly, there are geopolitical considerations at stake for India. But as the trade deficit with China widens over the last few years, it’s giving vent to populism, not some concerted strategy…
And if India wants its domestic manufacturing to compete at comparable costs, it should stop trying to block outside firms, and ask how it can better internal conditions. But that would mean a concerted policy that improves financing conditions, not to mention land acquisition clarifications and better regulations. Protectionism is just so much easier, no? [Mint]

Liberalise the defence industry

And thank Russia for shaking India out of its lazy old ways

What stands in the way of the Indian armed forces using indigenously developed main battle tanks, fighter aircraft and aircraft carriers?

Answer: Cheap Russian imports.

Years of dependence on Russian military hardware—which could be obtained at rather attractive prices—simply meant that the armed forces preferred readymade products they could use, rather than take more risky route of using the gear that the Defence Research and Development Organisation (DRDO) was developing. Giving the armed forces roughly what they wanted was a less risky option for the politicians heading the defence ministry. The relative ease with which Russian arms could be imported meant that there was no real incentive for India’s policymakers to think how domestic defence production could be improved. This is an oversimplification, of course, but it is the nub of the issue.

India needs a crisis, it is said, to jolt it out of its ways. Russia’s behaviour over the refitting and delivery of the aircraft carrier should provide one. Not merely because it upsets the navy’s plans to have two carrier groups by the end of this decade, but because the possibility of a Russia-China equation is real. India should develop a reputation for standing up to Russian armtwisting. Reliance on imports from Russia—cheap or otherwise—, however, poses long-term strategic risks.

Now, building main battle tanks, fighter aircraft and aircraft carriers is not trivial. But there is no reason to believe that India can’t develop and build them indigenously. It’s time to liberalise the defence industry. Transforming defence procurement policies to ensure that there are strong domestic manufacturers is not rocket science. It can be done.