16 July, 2019

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Defence Industrial Policy & Production Programme – Tamil Nadu

By  S. Sivathasan

S. Sivathasan

Defence together with armament production, procurement and policy related thereto fall within the ambit of the central government of India. No country that develops economically, neglects to grow militarily. The quality of armaments decides success in diplomacy and victory in war. This is no discovery but a commonplace. The critical decision that India took in recent years, declared or unannounced, was to turn militarist; not for aggression but for defence. On the issue of integrating Goa with India, Patel said at the cabinet meeting, “If you are agreed, I need only 24 hours”. Horror struck Rajaji said, “We must conquer Goa by love”. In 1962, Krishna Menon boldly declared to the world “India never abjured violence when it came to safeguarding her interests”. He did a Patel and with Police action, Goa became integrally Indian.

Not for nothing does Patel stand tall in steel in Gujarat; the tallest in the world. Not without sense was he called the Bismarck of India. Now Modi’s diplomacy works with remarkable success. When buttressed by more impressive arms, it will work with greater potency. The Indian bureaucracy, technocracy, military and the nation’s leadership are learned enough and adequately experienced not to repeat the Sino – Indian debacle of 1962. So quite adroitly, the correct moment is now seized, to burnish military prowess with unstoppable forward movement.

Compulsions for Indigenous Defence Production

India’s strength is a compound of economic power and demographic growth. Increasing assertiveness already displayed, permits of no stepping back. Threats in the western frontier, danger from the North, ravenous appetite and drool for Indian territory seen in the east are ominous enough. To add to the woes is the risk of what was called the ‘Permanent Aircraft Carrier’ in the south of Indian Ocean being hijacked. To students of history greater danger lurks in the “soft underbelly that is South India”. The latest incursion by the British in the 18thcentury was not from the northern passes, but through the South.

To Kautilya, that state which is on the borders of another state is an enemy. Hitherto, such a prospect might have been staved off through adroit diplomacy. Now the wisdom of Frederik the Great, “Diplomacy without arms is like music without instruments’, is a constant reminder.

In 1976, KPS Menon the distinguished scholar, a student of history, diplomat and writer declared open the Foreign Affairs Unit of the BMICH, Sri Lanka. In the course of his speech, he said that the US President had appointed a group of scholars to study and forecast how the world will be 20 years from then ie around 1996. The group had said among other things “India will grow into a great power, SHE WILL BE A DANGER TO HER NEIGHBOURS…,”. Then with a touch of humour Menon said that it does not mean India will be a threat to Sri Lanka. There was laughter. He added “I don’t know how learned men can make such a statement”. To this writer, it was the learned men’s learning that brought forth this warning.

IAF’s TEJAS Light combat aircraft

Imperatives Before India

The foremost reality that India grasped in the immediate past was to descend from ethereal heights and to face the unalterable facts of life. Peace in our time and goodwill towards all was only a pulpit wish. Ahimsic pleas and love all, serve all calls vapourise before the march of materialism in the world not least in India. Eight million small arms and 15 billion rounds of ammunition are produced each year. The result? 2,238,000 died in armed conflicts in 28 years since the cold war ended by 1990. The 5 permanent members of the UN are charged with maintaining peace, but they are collectively responsible for 70% of manufacture and sale of arms. Is there a chance for India’s passivity?

There is no escape for India except to get entangled in everything that great powers do in the name of war and peace. Produce arms or buy them. India’s economic circumstances in the early decades after independence admitted of only imports. In the later decades, corruption entwined with indecision and production plans got into paralytic mode. The result is, in the period 1950 – 2017 India has been world’s largest importer of arms. Leaving aside this 67 year period, in the last 4 years from 2013, India still remained the largest arms importer. Russia accounted for 62% of these imports

In contrast, Global arms trade is on the rise. Spending on military in 2016 was $ 1.69 trillion, treaty obligations on limitation notwithstanding. In total arms sales, top 10 manufacturers are in US, UK, EU and Italy. The sales amounted to $184.87 billion. US had 7 contributing $ 137.2 billion and the other 3 accounted for $ 47.67 billion. Employment in the arms economy is gigantic at 1,013,000 for the 10 firms. US has 748,000 and the other three 265,000. The aggregate economic and financial cost of violence since the end of the Cold War till 2016, is estimated at $ 14.3 trillion.

Defence Production Reaches Centre-Stage

Massive economic changes, fiscal reforms, sharp decline in corruption, social transformation and deriving from them all, a certain national resurgence has arisen. In September 2017, Hon. Nirmala Sitaraman was appointed Union Minister of Defence. In February 2018, the Government announced the setting up of two Defence Corridors, one in Tamil Nadu and the other in Uttara Pradesh.

The Tamil Nadu corridor linked five industrial clusters of Chennai, Salem, Hosur, Coimbatore and Trichy as nodal points for the defence enterprise. With decades of industrial expertise they were poised for vertical takeoff. They all fitted into Prime Minister Modi’s ‘Make in India’ initiative. At break neck speed a mega Defence Expo was held near Chennai in April 2018, with major foreign and local players participating. On 20, January 2019, the Minister of Defence launched the investment programme for Tamil Nadu. MOUs were signed for projects to the tune of Rs. 32 billion. With policy in place and the pace set, the long term programme of making military hardware is now on an even keel.

 Aerospace and Defence Industrial Policy

January 23, 2019 was a historic day for Tamil Nadu when the state government launched the second edition of the Global Investors Meet (GIM) 2019. Memoranda of Understanding were signed for a comprehensive range of projects and programmes, on this two-day event. Hon. Nirmala Sitaraman, delivered the keynote address.

This was occasion to release the Defence Industrial Policy document and to outline investment magnitudes. Of what follows in this article, excerpts  taken from that document also appear. It envisages Tamil Nadu state’s share as 30 percent of the nation’s defence sector. More importantly, it ventures to create an end-to-end ecosystem. A range of activities, embracing design, engineering and manufacture of aircraft for defence and civil purposes is planned for the immediate and medium terms. This would attract investment of $ 5 billion in the first five years and a total of $ 10 billion in ten years. Flowing from such investment is high-end employment of 100,000, in the same time frame.

Why Tamil Nadu?

Tamil Nadu is industrially advanced and has a diversified industrial base. The state is first in India in number of factories and industrial workers. It ranks third in Gross Industrial Output and in FDI inflows. The stellar performance of industrial and services sector explains the robust economic growth. The state turns out the largest number in India of engineering and technical personnel.

In the automobile industry, Tamil Nadu with 25% of output is the largest contributor to this sector in India. It is the only state to have attracted seven automotive giants – Ford, Hyundai, Mitsubishi, Daimler, Nissan, Renault and BMW. Peugeot-Citroen has already done its ground breaking. Exports are 300,000 vehicles a year. Caterpillar and Komatsu are two of the large equipment manufacturers.  With export quality components produced by 350 large manufacturers, Tamil Nadu accounts for 35% of production and 21% of exports.

Tamil Nadu is the third largest manufacturer of electronic hardware in India and this has grown at a CAGR of 30% since 2008. It is envisioned that the inherent strengths of Tamil Nadu in automotive manufacturing are extended to Aerospace and Defence manufacturing. Yet, crucial would be to secure to the state as anchors: Original Equipment Manufacturers, component suppliers of Tier 1 credentials, Indian majors and SMEs. Of great significance is also transfer of technology which is very much insisted upon as policy.

An index of a developed eco-system for defence production is the existence of several manufacturing public sector undertakings and Ordnance factories. They include Heavy Vehicles Factory Avadi near Chennai, manufacturing tanks and heavy vehicles, Ordnance Clothing Factory at Avadi, Engine Factory Avadi, Ordnance Factory Trichy and several other facilities. “Strong engineering / manufacturing clusters

and the highly skilled workforce, along with favourable investment climate make Tamil Nadu an ideal location for the Aerospace Defence products manufacturing activities”.

Support for Aerospace and Defence Industry

The government will adopt a cluster development approach, in building the physical infrastructure for the large, medium and small companies. Aerospace and Defence Parks will thereby be established. They will provide a whole host of facilities from Design to Assembly. Locations with facilities already established and having potential for greater expansion will be selected in the Defence Corridor. The areas being in Coimbatore, Salem, Hosur, Chennai and Trichy. Department of Defence Production, under the ambit of Ministry of Defence will oversee implementation. The central and state governments will provide all facilitation particularly land availability and in road, rail and air connectivity to Parks and clusters.

Internationally, defence production and marketing are very competitive and call for a range of incentives, subsidies and tax exemptions. An attractive package has been realistically worked out. Proactive support includes, developing human resources, building partnerships, and research and development including innovation. A corpus of incentives taking the form of subsidies and concessions, aircraft maintenance, repair and overhauling facilities will also be provided.

The Future

Placed as of now in an unenviable position, India ventures to be among the giants of global armaments production in 10 years. In this period, Tamil Nadu investment is pegged at $ 10 billion and employment at 100,000 for this spectacular enterprise. ‘Make in India’ is core implementation policy. The Defence Corridor, is fated to be a game changer for the State’s economy. A start was made on January 20th2019, with the signing of a few MOUs. A perennial flow of funds – from Centre and State; influx of local and multi-national entrepreneurs; continuing advent of FDI; a constant transfer of technology and the state’s landscape changing beyond measure are features to be looked forward to.

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Latest comments

  • 8
    0

    Ford, Hyundai, Mitsubishi, Daimler, Nissan, Renault, BMW and Peugeot-Citroen have invested in Tamil Nadu. Why is it that none of them have invested in places with highly literate populations like the Kerala of my antecedents or Sri Lanka? Is it because the academic focus is on the Arts and not on Applied Science? Is it student politicization and interrupted education? Or is it the trade unions? The 2.7 million Keralites do well in the Gulf but not in Kerala. Why?

    • 8
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      Girlie
      You have a true curiosity to know. Firstly the culture of learning explains. Coming to modern times, the British built the Madras University in 1857. The other two in the same year being Bombay and Calcutta. Rourkee Engineering College in early 20th century and IIT Chennai for more than 50 years are reputed to be world class. Nobel Laureates are largest in India coming from TN. The great mathematician Ramanujan was from TN. So much for the culture of education and of science.

      Engineering Universities and Colleges are largest in number in TN. So is the number of engineers, largest. To support, diplomates, largest. With several of these merits , Talent Pool stands preeminent. Advantages TN are in my article. Ashok Leyland, next only to Tata is the largest and oldest with 5 modern manufacturing units located from Chennai to Hosur in the West.. Together with them all is a succession of proactive state governments, untainted by the curse of communism.

      Pitted against these endowments, ‘high literacy’ in Kerala and Sri Lanka made no impression on multinational investors.

      • 5
        3

        Add to that Tamils and Telugu people Excel in science both of them are large in numbers in northern TN area. Not just IIT , if you take NIT Anna University PSG GCT are premier insitutes that’s why TN got IITDM kanchi IIIT srirangam besides one more NIT and IIIT in pondi. Plus Brahmin community of TN is second most intelligent genre after Jewish. You can see Sundar pichai aravind subramainam raghuram Rajan et a Excel globally

      • 7
        2

        Please do not tell me about the talent that comes out of the money-spinning ‘colleges’.
        I have spoken at length to a good sample of such talent.
        But it is true that TN has more than its fair share of the good institutions.

    • 6
      4

      We are not religious retards like you people . A county like yours with two dominated ethnicity and three religion going through every day whereas India with 100 ethnicities and 500 langugages with 7 major religion still amicable largely respecting others any political party disturbing this fabric will be weeded out by majority. Growth matters most than religion here.

      • 6
        5

        Does India really respect the linguistic, cultural and land rights of the majority of the 100 (or really much more) ethnicities?
        *
        A tribal or a Dalit will have something to add. So will those near the eastern border.

      • 2
        2

        Manisekaran
        “Growth matters more than religion here”.
        Is it really so? Only caste matters eh?
        What about the Hindutwa octopus and it’s various fascistic arms like the Shiva Sena, Bajrang Dal, Vishva Hindu Parishad, etc.etc.
        Do you remember case of the Kizaveni Dalits in Tamil Nadu who were incinerated a few years ago?

        • 0
          0

          It was KiizveNmaNi.
          It was a disgrace. the main Tamil parties sided with the police and the high castes.

        • 0
          0

          Caste based ghettos are confined here. Thats why you see TN is major industrial state so does other southern states. What you read is one off instances shown in newspaper from Rural areas. Other facists in Northern India fuels regligious sentiment but by large people ignore them. case in example, when AAP formed on a devolopment basis it captured delhi and gaining ground in Northern states as an alternative to BJP and congress, because people align with parties that espouse growth stratergy, It is true polictical parties in last 30 years failed but not people.

    • 3
      0

      Girlie,
      Living standards in Kerala are higher than TN , partly due to overseas remittances. Also, Kerala is short of heavy industry, but has huge IT parks. It now attracts lots of Bengalis and Assamese.

  • 5
    15

    According to https://en.wikipedia.org/wiki/Tamil_population_by_nation the total Tamil population in the world is 75,863,177. Out of this total, 69,026,881 (90.9%) live in India. Only 3,135,770 (4.13%) live in Sri Lanka.
    More than 75 million, Tamils definitely deserve a separate country of their own. Can someone tell me why these dumbos in Sri Lanka with only 4.13% of the total are clamoring for a separate State in this tiny island instead of demanding or fighting for a separate State in India where nearly 91% live? Is there something wrong with their brains?

    • 11
      1

      What brilliant math and logic to match! Correct statistics – Sri Lankan Tamils are 11.5% of the nation’s. Tamils in India are 5.7% of India’s population. May it be known, percentages never determine history.

  • 6
    4

    India is, as we know, India today because of Federal governance. The founders had the foresight.
    ‘Democracy’ survived the trails and turbulence. India had to suffer by way of slowed development but again has come out on top. Today India is the biggest uninterrupted democracy. This is due to the culture of secularism imposed by the founders. Non-secular neighbours have had lengthy military rules.
    .
    India is a force to be reckoned and is on the way to prosperity. Secular education and adherence to meritocracy helped in creating world class scientists. “Made in India” is now visible all over.
    Like the rest of the world India too could not avoid the culture of ‘materialism’. Substantial investments in armaments has become a necessity.
    .
    If India ventures to be among the giants of global armaments production in 10 years , the founders, if brought to life, will unashamedly shed tears.

    • 4
      3

      KP
      “India is, as we know, India today because of Federal governance. The founders had the foresight.”
      India is not really federal.
      The Centre can at will dismiss a state government.
      There was not much foresight in deciding on language based states. It led to a crisis in Punjab, which today is three states. Another failure is Andhra that split a few years ago.
      Thanks to Ambedkar, there is some voice for Dalits and tribal people, but not adequate and eroding under right-wing regimes.
      Ethnic identity is a complex issue, and there are unforeseen issues that no amount of ‘foresight’ can address, especially in the face of religious and linguistic parochialism and a caste hierarchy.

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

  • 7
    6

    I wonder whom the big weapons will intimidate?
    *
    The recent tragedy in Kashmir tells us another story. (It is easy to pin the blame on the neighbour to the west. But the root of the problem lies in the heart of Delhi. Big talk of reprisals by the military will stir more trouble while solving nothing)
    The Maoists are back in action and the nations of the eastern India have stood up to decades of state oppression.
    *
    India should invest in its impoverished population.

  • 5
    2

    This bias by companies to locate factories or production facilities in Tamil Nadu has nothing to do with their education, rather it has so much to do with the attitude of the people there.
    The Tamil Nadu people are very hard working and are level headed in their ways. They are less demanding and don’t try to be over smart like the kerala or Bengali people.
    You can see this in Sri Lanka. Indian Tamil people were chosen by the British when they built the tea industry and are still working under meager conditions.
    Could you imagine any other set of people working in the tea industry in this day and age, working for so little under less than average conditions.
    In another way, Bengal where the people are supposed to be educated, industrialization is minimal there. Tata relocated their nano car plant from Bengal as there were more strike days than production days. Similarly Keralites give a tough time to investors. Hence not much industrialization there either.
    Yet both keralites and Bengalis work well in other countries with strict rules and hardened bosses.
    Having said that let me remind you that Tamil Nadu has its negative side too, for instance Tamil Nadu is not known for its cleanliness nor is it known for its modern and efficient ways of doing things.
    The question is by looking at India what can we learn? What can we do differently to attract investment?

  • 1
    3

    Oh no….. Tamil Nadu is getting better. That means all the Tamils and all the Muslims are returning home to Tamil Nadu. Good bye!!!

    • 1
      1

      Tamil Country will reover its own place. The historical aberration called India and Sinhala Country, created by the British, will naturally cease to exist, the way it must be.

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