India's locally manufactured ARJUN Main Battle Tank by DRDO/Ordnance Factory Board

by Sudhi Ranjan Sen (Bloomberg)

Prime Minister Narendra Modi’s push to boost domestic manufacturing of defence systems is leaving India vulnerable to persistent threats from China and Pakistan, according to officials with knowledge of the matter.

India’s air force, army, and navy can no longer import some critical weapons systems to replace aging ones, the officials said. That risks leaving India critically short of helicopters by 2026 and with a shortfall of hundreds of fighter jets by 2030, they said.

Shortly after sweeping to power in 2014, Modi unveiled his “Make in India” policy to build everything from mobile phones to fighter jets in India to generate jobs and reduce outflows of foreign exchange. But eight years later the world’s biggest importer of military hardware still doesn’t manufacture enough weapons locally to meet its needs -- and government rules are blocking imports.

Modi’s program mandates between 30 per cent to 60 per cent of home-made components, depending on the nature of the military purchase or where it’s purchased from. There were no such caps earlier and India used a system of ploughing back a certain percentage of the cost of the purchase into domestic manufacturing.

As things stand, India’s military readiness is set to further deteriorate just as it faces greater risks from Pakistan and China, which has soldiers deployed toe-to-toe against troops from India along their Himalayan border following deadly clashes in 2020. The weaker air force in particular means India will need twice the number of soldiers on the ground to deter aggression along the Chinese border, one person said.

Bloomberg spoke to multiple officials for this story across the three services in India. They asked not to be identified to discuss sensitive issues.

The Ministry of Defence did not respond to an email seeking comments.

While India’s military has increased local purchases of some defence items, the country doesn’t yet produce complex platforms like diesel-electric submarines and twin-engine fighters. Plans to buy fighters from foreign manufacturers were shelved because the Modi government wants the air force to opt for indigenously made single–engine fighters, which are in short supply, as well as twin-engine fighter planes that the country doesn’t yet have in production.