What is the Strategic Partnership (SP) Policy?

• The intention of the “SP” policy is to promote the private sector to primarily  manufacture – fighters jets, helicopters, submarines and tanks, in India.
• The partnership envisions facilitating technology transfer from a foreign ‘Original Equipment Manufacturers’ (OEM) to a local partner on agreed terms.
• This will aid Indian firms to access the technical knowhow on weapons manufacturing while also simulataneously boosting foreign investments.
• Notably, to bring a spread in skills among many firms, the policy mandates only one class of weapons to be manufactured by one local partner.
• The process designated to select a SP is long and arduous and nominated firms must demonstrate its financial and technical potency to be selected.

What are the challenges?

• It is a fact that even the most strong of Indian firms dont currently pocess the capability to build sophisticated military hardware. 
• For example, building a warship demands expertise not just in welding, fabricating, plumbing and wiring.
• More specifically, establising a battle ready platform requires expertise in high-tech propulsion systems, environment management tools and sensors.   
• Notably, public sector shipyards like Mazagon Dock and Garden Reach took almost 50 years to aquire the current level of expertise to build warships.
• Similarly, even Hindustan Aeronautics, which is the only Indian company capable of manufacturing fighter jets, had taken decades for the achievement.  
• These public enterprises literally began with nuts and bolts and simple sub-systems, and then graduated to more complex systems.

What is the risk of rushing through with partnerships?

• In the urge to quickly build private sector capability, the SP policy seems to be demanding unreaslistic technological capabilities from aspiring firms.
• Even with the best of intentions and handholding from foreign OEMs (foreign firms), Indian firms will be hard-pressed to build a modern fighter or frigate.
• SP projects require at least a 40% indigenisation, but the most costly components like propulsion systems and sensors will have to be imported.
• This implies that a large amount of fabrication and final integration has to be done in India to meet the 40% indeginisation target. 
• All this would mean an undesirable dependence on the foreign partners to compensate for the slack by the local firms.

What is the way ahead?

• Aspiring Indian defence firms like the Tata group, L&T, started manufacturing relatively simple components and then graduated to sub-systems and systems.
• These firms seem to be on the right track and they can eventually graduate to manufacturing fully finished equipments.
• But the government needs to be realise that if this process of gradual evolution is rushed beyond a point, it will become counter productive.