The importance of India’s defence industry to political independence
India is concerned about its security and defence, especially in view of China's rearmament and border disputes with China in the north. India has also had an on-and-off war with Pakistan since partition and independence in 1948, writes Prince Michael of Liechtenstein.
Pakistan and China are becoming closer and reinforcing their common interests. India is trying to achieve a strong naval position in the Indian Ocean, and this strategy is becoming more important as China's navy increases its activities in the Indian Ocean.
India has the third largest combat/defence force in the world when combining the headcount of its army, air force and navy. It is also the world's largest importer of weapons, producing only about 40 per cent of its own military equipment. Arms are supplied to India by a number of countries including the US, Russia, Europe and Israel.
Now India’s Prime Minister Narendra Modi plans to develop an economic programme called ‘Make in India’ which includes the defence industry.
But why is this arms build-up important? The defence industry is a good business which creates jobs. It is necessary because only a strong defence guarantees peace.
India needs to provide more jobs, so this combination is advantageous. But having its own defence industry also gives it independence. Having to depend on foreign arms suppliers in times of crisis or conflict can make a country highly vulnerable as some arms exporting countries could stop supplies when they are most needed. It can also create an undesired political-economic dependence.
Stronger powers therefore need to maintain this independence and not rely on other countries for their weapons.
Mr Modi is determined to establish India's own defence industry, and to enhance the programme India has abandoned a 26 per cent limit of share ownership foreigners can hold in India’s defence companies.
The new limits are between 49 and 100 per cent depending on the amount of know-how and technology transfer the partner brings. Technological cooperation with India is a good opportunity, especially for Israel's defence industry.
Defence businesses need to be of a sufficient size and have economy of scale which defence exports can help provide.
It looks as though India recognises both the need for a strong defence and why this should be supported by a robust defence industry.
Europe could follow India’s example. The issue of defence is being neglected irresponsibly in Europe even as the Ukraine crisis rages. In spite of Europe having the know-how and the most advanced technology, its defence industry is treated like a neglected child.
Each of Europe's countries is individually small compared with the US, India, China or Russia. Europe’s combined defence spending is sizeable but ineffective because it is fragmented between so many countries.
A common defence would enhance Europe's independence and security. Bundling together its defence industry would further increase its effectiveness. But political decisions led to a lost opportunity when the merger of the then mainly French/German giant EADS (now Airbus Industries) with British Aerospace was called off.
Europe is ‘sleepwalking’ while other global powers are taking decisive action. Mr Modi is facing up to realities even though India is basically a peaceful nation.
For more in-depth analysis on international affairs visit www.geopolitical-info.