The Chief of Defence Staff (CDS) in his recent interview to one of the leading English news channels had given a suggestion to explore the feasibility of lowering quality standards for defence procurement to give impetus to the ‘Make in India’ programme. The objective is to overcome the delay being anticipated by the Armed Forces in the procurement of military stores and weapons from abroad. Since all defence acquisitions are likely to be delayed in view of COVID-19, the idea of sourcing weapons and associated systems indigenously was welcomed by many, including the domestic defence manufacturers and associated MSMEs. In fact, the suggestion by the CDS is in line with the strategic initiative of the Government of India (GoI) to bail out the economy from the present crisis. Though the sourcing of military stores can be done at a faster pace and cheaper price from domestic vendors, the Armed Forces may have apprehensions about the quality and standards of items being sourced. The CDS has emphasised the need to bring down the General Staff Qualitative Requirement (GSQR) standards up to 70 per cent to give a boost to the ‘Make in India’ programme. But there is a need to deliberate this with all the stakeholders prior to its implementation.
General Staff Qualitative Requirement
GSQR is the quality standard laid down by the frontline soldiers every time when they seek a new weapon or system. It is mandatory for all military stores being purchased under the Defence Procurement Policy (DPP). Frontline fighting forces always insist on the best quality weapons and systems, and depriving them of this could even affect their morale. GSQR plays a critical role from tendering to deployment.
Implications of Lowering GSQR
Lowering GSQR may not augur well with the Armed Forces. The opportunity to procure new or replacement weapons happens once in a blue moon. Since the life cycle of military systems/weapons is very long, the opportunity to replace the old system with new one seldom happens and the Armed Force would exploit this opportunity to the fullest. Against all odds, if the item being procured is substandard, it could become a liability for the Armed Forces. The thrust on ‘Make in India’ post COVID-19 would certainly boost our paralysed economy, but whether the defence industry is capable of meeting the expectations of the Armed Forces needs to be ascertained. There are a few critical manufacturing areas where our indigenous production capabilities lag far behind the leading military powers, some of these domains being the military aircraft and associated technologies, weapon systems and control, defence electronics, aero engines, warship and submarine control systems, turbines, metallurgy, casting and forging of heavy machinery, precision engineering, etc.
Relevance of GSQR
GSQR being one of the key elements in defence procurement, a minor change in any of the specifications could make or break the vendors. Procurement of Augusta West Land VVIP Chopper in 2012 by the Indian Air Force after lowering GSQR standards by reducing ceiling height from 18,000 to 15,000 feet is a classic example of how critical GSQR is for defence procurement. When the Armed Forces initiate a procurement process, a ‘Request for Information’ (RFI) is sent to the leading weapon manufacturers enquiring about the specifications and capabilities of their respective products. On receipt of response from these vendors, the Armed Forces do an extensive study and research on the specification, quality and capability of weapons under procurement. This is done by a professional team of frontline soldiers who are directly linked to the weapon system/platform under procurement. Once drafted, GSQR can be changed only if there is any valid reason to do it and that too with the knowledge of end users. Once it is ready, the Integrated Headquarters of the Ministry of Defence would dispatch the Acceptance of Necessity (AoN) to all the firms/vendors who could bid on the procurement process. During this stage, it is very difficult for the Indian firms to meet the expectations and match the QRs laid down by the Armed Forces. Domestic vendors will not be able to compete with foreign vendors with respect to the quality and standards being laid down by the Armed Forces in the GSQR.
Once GoI and the Armed Forces decide to lower the quality standards of weapons and systems under purchase, the possibility of Indian vendors defeating the foreign counterparts in the technical and commercial bid is high. If this happens, Indian firms may bag the orders since foreign firms cannot compete with them on price. Lowering the GSQR standards is a very sensitive exercise and needs to be done in a calibrated manner with the concurrence of the Armed Forces. Inducting a substandard product into the Armed Forces can backfire and may trigger the entire procurement process. Lowering GSQR is easy to profess but very difficult to implement.
Implications on Economy
Lowering GSQR would be beneficial to our economy and forex reserves. Once GSQR is brought down, more Indian firms are likely to bid for weapons and systems under procurement. After bagging the orders, they will start producing quoted items indigenously. The Defence manufacturing sector will witness a spike in start-ups. These firms will be forced to raise their quality standards to match with GSQR. Thus, competition among domestic firms will increase. The MSMEs’ ancillary units would flourish by manufacturing subcomponents. Since the number of units manufactured by the domestic vendors may not break even, they can explore the overseas market and boost arms export. Indigenous defence vendors may collaborate with many foreign players for Transfer of Technology (ToT) and manufacture the product indigenously. Thus, the Armed Forces would be able to expedite the procurement process. Besides, indigenous vendors can provide life-long service support to the Armed Forces since the product is made within the country. Apart from all these benefits, precious forex can also be saved.
It is a big challenge for GoI and the Armed Forces to tweak GSQR without hurting the frontline forces. The nation may benefit by boosting the ‘Make in India’ programme. The stakeholders will have a tight rope walk since they cannot compromise on the quality of the system being inducted. Therefore, detailed study and deliberation are mandatory prior to lowering GSQR. The current initiative of GoI on ‘Make in India’ programme is specific to defence. This would certainly accelerate the indigenisation process and benefit MSMEs and our ailing economy. It is too early to predict whether this initiative would benefit the Armed Forces qualitatively. The exercise can be prudent only if GoI gets the consent of the Armed Forces on a case to case basis.
Views expressed by the author are personal and need not reflect or represent the views of Centre for Public Policy Research