Fifty percent Indian military equipment is ‘obsolete’, according to a study by the Confederation of Indian Industry and the consultancy firm KPMG.
The report comes a few months after the army admitted to a Parliament standing committee that it had just over 50% of the required capability.
The CII-KPMG report, ‘Opportunities in the Indian Defence Sector: An Overview’ says India is set to undertake one of the largest procurement cycles in the world in the light of the situation.
“The current profile of the equipment held highlights the need for modernisation with ‘obsolete’ equipment currently accounting for 50% equipment,” says the report. According to the required equipment profile of the government, at any given point of time, only 30% equipment should be ‘obsolete’.
In an ideal situation, the ministry of defence contends, 30% equipment should be “state-of-the-art”, 40% “mature” and only 30% “obsolete”. The reality, says the report, is that only 15% equipment is “state-of-the-art”, 35% “mature” and 50% “obsolete”.
“During the last decade, the Indian defence industry has been in the process of undertaking one of the largest procurement cycles in the world. The current cycle, which includes the acquisitions drafted under the long-term integrated perspective plan (LTIPP), is expected to include procurements worth $100 billion by 2022,” the report says.
The report has identified three areas where industry is “seeking further government input” — the procurement process, the need for a defence industrial strategy for India and tax and regulatory incentives.
CII representatives said the government should take steps to improve visibility of the government’s defence order book, increase industry’s input and feedback into the process, improve predictably and flexibility of the procurement process and reduce bidders’ costs.
