Aatma Nirbhar Bharat: Reforms in Defence Sector

Reading time: 8-10 minutes.

India’s Finance Minister Nirmala Sitharaman in a press conference declared that the Government is planning structural reforms in various sector of the economy to give a push to the economy of the country which is being affected a lot during the Covid-19 pandemic, and for this work has already been started by the government.

Aatma Nirbhar Bharat is a weapon launched by the government to fight the economic battle arose due to the pandemic which has eaten up thousands of jobs and also, has disrupted the business houses of the country. In this project the prime focus of the government will be on those industries mainly which have the potential to create wealth, employment and other benefits in the long run.

For this the government has started their part of work which includes, Investment clearance which will be done in a speedy and effective manner through the empowered secretaries. A project development cell will be established in each ministry to prepare investible projects and coordinate with the investors as well as government at central and state level. Also, for the development of the states the state will be ranked as per the investment attractiveness so that each state will compete for the investment which will lead to effective investment schemes by the states. Industrial cluster upgradation will be done through challenge mode in states, 3,376 industrial parks and SEZs in 5 lakh hectares will be mapped on Industrial Information System.

The reforms which are announced by the finance minister will affect the following eight sectors but we will be dealing with defence sector mainly in this article:

  1. Coal
  2. Mineral sector
  3. Defence
  4. Civil aviation
  5. Making India an MRO hub
  6. Power distribution companies in union territories
  7. Space
  8. Atomic energy

Reforms introduced:

Defence sector:

  1. Negative list: the list of the weapons and platforms which will be banned for import will be prepared and as per the capacity of domestic industry the list will be increased every year.
  2. Capital budget: the separate budget needs to be prepared for regarding procuring indigenous weapons and platforms.
  3. FDI limit: the major change which was announced was the increment in cap size from 49% to 74% under automatic route and also the security clearance.
  4. Ordnance Factory Board: the 41 functioning units under OFB will be corporatized to improve the accountability and efficiency.
  5. Maintenance and spares: liberalisation in the scheme for the import of expensive spares.
  6. Procurement process: a project management unit would be set up for the effective and time bound decisions, realistic framing of technical parameters and overhauling trial procedures

Objectives of reforms:

Following are the major objectives of the reforms introduced with respect to the defence sector:

  1. To attract FDI in defence:

FDI limit is increased which will lead to more investment by global companies in Indian economy. As several global arms major has for long being demanding the hike in the FDI limit on the ground that they need more management control of the JV’s to set up investment and provide top notch military technologies to India. Earlier, due to this cap the country was suffering because there was no proper investment which is being made, the countries capacity to invest was much larger but it is being underestimated, which will not remain the same in present scenario.

  • Corporatisation of Ordnance Factory Board:

There were reports earlier regarding inefficiency in work by the board and due to which corporatisation was essential so that good quality of goods can be produced and there remains proper accountability for the goods that is weapons given to the army. Also, the export field will get the expansion if the quality and quantity of goods will increase, the turnover will see a high rise and the major scheme which is being promoted, Make in India will get a good response which will be helpful for the economy in short as well as long run.

  • Promoting self-reliance:

The objective behind reform in defence sector was to promote the Made in India project so that instead of import, export can be expanded which will lead to more money in the economy as well as more job creations. The Make in India project will get a huge support from different sectors as the most critical sector that is the defence sector, from now would be buying weapons from the local market instead of international market this will lead to a push in economy as the currency will flow in Indian market only.

  • Effective and efficient results:

The establishment of project management unit which will work as a supervisor would be helpful for the sector as that will help in time bound effective results which will be essential and also, the demand for the field because the major weapons would be produced in India for the first time so to get effective results are important.

Laws and legal provisions involved:

Since the advent of the Industries (Development and Regulation) Act, 1951, the Defence sector was treated as the domain of the Government, and private industry was not permitted to participate in its development. The sector was first opened and only 26% FDI was allowed. Most foreign original equipment manufacturers were uninterested in forming ventures as there was no proper control given to foreign companies to settle and also, they have no choice in choosing their partner industry. However, increase in the sectoral cap on investment in defence remained the much-voiced industry demand.

The most significant reforms for FDI in the Defence sector came in the year 2014. By way of Press Note 3 of 2014, a list of defence items requiring industrial license under the IDRA was notified. Thereafter, by way of Press Note 7 of 2014, the sectoral cap for FDI in Defence was permitted up to 49% under the approval route, and beyond 49% on a case-to-case basis, wherever it was likely to result in access to modern and ‘state-of-art’ technology

The significant change came in the year 2015, where in an unprecedented move by way of Press Note 12 of 2015, the Government allowed FDI up to 49% in the Defence sector under the Automatic route of investment. As opposed to the previously prescribed onerous conditions on FDI in Defence, investment was subjected to only 4 conditions.

  • Requirement for Approval
  • Licensing
  • Security Clearance
  • Self-sufficiency

In 2016, the applicability of the FDI regulations governing the Defence sector was expanded. By way of Press Note 5 of 2016, the sectoral caps and conditions on FDI in Defence were extended to “Manufacturing of small arms and ammunition under the Arms Act, 1959”.

Foreign investment numbers released by the Department of Industrial Policy and Promotion (“DIPP”), the nodal agency responsible for approving and regulating foreign investment in the country, show that in spite of the liberalisation of the FDI cap, foreign investment in the sector between April 2000 and March 2017 was merely USD 5.12 million. This, when the Government is actively promoting its “Make in India” initiative with a particular emphasis on the Defence sector, and the Prime Minister personally taking up the issue of investment in the sector at each of his numerous diplomatic meets since coming to power.

For defence sector, Department of Promotion of Industry and Internal Trade, FDI flow in India did not increased even after policy change in India in 2016 and therefore the cap was increased. The draft note for the cabinet committee regarding corporatization of Ordnance Factory Board is pending.

Critical analysis:

India has an annual defence budget of Rs. 4,04,365 and this figure stands behind USA and China. It is also the second largest importer of weaponry after Saudi Arabia and has imports approximately 9.2% of the total arms during the year 2015-2019 but now the scenario will no longer remain same as now only the weapons which cannot be produced in India in present scenario will only be imported and for the rest country will produce its own weapon under Make in India scheme this will lead to reduce in huge defence import bill. India has attracted a paltry Rs. 1,834 crores as FDI in defence and aerospace sector since 2014. In the same span of time the country has gain a capital procurement contract of over 120 crores and Rs. 2 lakhs crore with foreign armament companies.

The cap demand which is increased, whether it is attractive and financially remunerative would depend upon the fine print and conditions regarding liberalisation in the field. It is also important to know that whether the companies would be willing to invest 74% FDI at par with the other Indian companies who are the majority stakeholder.

The corporatization of Ordnance Factory Board will lead to more autonomy and accountability but here corporatization did not mean the privatization of the board in anyway. There were many causalities and accident which were reported taking place in the field due to poor quality and defective ammunition being supplied for tanks, air defence and other guns by Board. The bill which is pending related to corporatisation of Board claims that the entities which are owned by state their turnover will be increased to Rs. 30000 crores by 2024-25, export will be enhanced to 25% of the turnover and the bar of self-reliance in technology will be increased by 55% i.e. from 20% to 75% by 2028-29.

But this cannot be said that whatever results are expected from this reform will emerge in the same way only because numerous other issues are to be settled to make the plan effective. The present budgetary support to OFB’s are not sufficient as and can pose an immediate financial challenge.


For the development of the country and the economy the steps are essential and the sectors stated are the major sector where there is scope for investment by the investors and elimination of the long procedure for filing of documents will lead to elimination of middle men who are the ones breaking the circular flow of money in an economy.

Although the liberalisation is made in the defence sector but the overlapping rules and regulations by government will continue to affect the growth of industries. India is having a huge scope for development in the defence sector but the delay in decision making leads to the hindrance in getting big projects to India. The defence sector is a sector where there is no scope for mistake and therefore the government will never loose the control over this sector but the process can be simplified so as to attract more investors.

Liberalization process is always welcomed by the investors and a boost in investment is seen in each sector where liberalization is being done. Also, the quality of work given by private sector is always either equal to or better then public sector and the job creations would be increased as Make in India projects are promoted in sectors like defence where there is no scope for mistake, so the steps should be welcomed by all the stakeholders who are directly or indirectly linked to this process as the demand now is “united we stand and divided we fall”.

Author: Tushti Pande from Jagran Lakecity University, Bhopal.

Editor: Dhawal Srivastava from Rajiv Gandhi National University of Law, Patiala.

Analysis: Political comments by CDS (Chief of Defense Staff)

Reading time: 6-8 minutes.

India’s Ex-Chief of Army Staff and now the country’s first Chief of Defence Staff (CDS) Bipin Rawat, in uniform, while addressing a health summit event in New Delhi, on December 26, 2019, commented on the quality and values of a responsible leader while citing the incendiarism, violence, and destruction of public properties during demonstrations against the recent Citizenship Amendment Act (CAA).

There is no doubt that while this comment had not indicated any personality related to a political group, the comment had a clear context, that of CAA. The comment raised the following issues. First, what do Indian regulations and other nations like the US and UK rules say in this context?

Second, is this against the issuance of civilian control of the military doctrine of a stable liberal democracy? It also raises the question of the political activity of military persons while in active service.

Besides, former Navy Chief Ramdas termed CDS Rawat comments of being `wrong’ as well as being `partisan.’ The words `wrong and partisan’ have been used to view that the feedback was not politically-neutral. It leads to the third issue, why should the army be politically-neutral and non-partisan, and what do we mean by the term `partisan?’

Regulation: Army code of conduct and comparison

The Indian Army Act, Section 21 rules do not allow a military person to address at a meeting organized for a political or any other purpose by anybody or any organization. He is not allowed to speak to a press without prior government approval or publish any political book without prior consent.

In comparison, the US Military regulations have clear, strict rules to follow the Civilian Chief Commander irrespective of personal bias, including a defined preventive `partisan’ political activity and a defined allowed `non-partisan’ political activity.

This non-partisan political activity includes any issues not identified with any political organizations but also includes issues with constitutional referendum and amendments and without uniform. Alternatively, a partisan political activity is supporting issues identified with political parties or any organizations.

In the UK, army rules clearly state that a military person cannot participate in any political party or demonstrations subject to the condition that there is no such restriction if no uniform is worn, there is no disrespect to the service, and the duty is not blocked.

Reasons: A politically-neutral army

In political science, we find the existence of the doctrine of civilian control of the military that leads to a stable and thriving democratic state. In support, Kohn, in his essay on `civilian control of the military,’ views that the existence of the military is not to define the society, but to defend the society, while the Clausewitzian view of war emphasizes that the military should implement policies rather than formulating it.

Similarly, Huntington, in his book titled `The soldier and the State’ focuses on the objective of civilian control and a politically neutral soldier with a sense of distinct professional attitude that also prevents political interference.

Around the world, NATO prescribes a civilian control of military doctrine for its members as a precondition. Even the Maoist supports the party as the supreme and the military being subordinate to the party. No doubt, a lack of civilian control of the military leads to `a state within a state’ also synonymously known as the military dictatorship in an extreme form.

It is imperative to have a politically-neutral army in a country like India. Traditions of time-tested neutrality, highly co-related to professionalism, take years to build up through self-restraint, and impartiality. And India is a classic example of this.

Even in today’s contemporary short-life, dynamic social-values, hyper-polarised political environment, and spectrum, the army’s standing as a trusted altruistic professional institution serving the nation impartially, has the highest confidence of the nation’s public, and politicians. It is this army that provides security and confidence to vote without any fear and pressure. It endorses the peaceful change of power including civilian supremacy.

The army in turn, also requires the brightest and the best people with different political views but without any political test to remain professional and powerful. It will ensure that military personnel management will be non-political and non-partisan. If this approach is sacrificed, the first loss in this continuum will be the professionalism of the army.

At the same time, preference expressions by superior will impose limitations and uncertainty in the command structure leading to decision making based on trust or preference. The last loss will be a coup or a revolt.

And, finally, a uniformed military personal making a non-partisan (per US Rules) political comment will undermine the best efforts and ethos of the military.

Reaction: Public outcry

CDS Rawat’s leadership comments educed strident criticisms from various sources and on multiple media. It includes opposition and allied political parties, opposition leaders, retired military personals, activists, and on social platforms, online news, TV news and newspapers.

Summarily all the comments showed concern on the indictments of breaking the conventions by the Army Chief by commenting on internal affairs and thus violating the civilian control of military doctrine.

Of these, retired Navy Chief Ramdas elaborated on the code of conduct prescribing neutral political views for all military persons. Politician Sitaram Yechury of CPI(M) used Twitter to comment on a military person in uniform breaking the military institutional role. Politician Digvijaya Singh of the Indian National Congress (INC) used the opportunity to use a post-truth political comment on the ruling government based on the Army Chief’s comments on leadership virtues.

Besides, politician Brijesh Kalappa of INC used twitter to make remarks on constitutional democracy violation. He also commented upon the possibility of ruling government allowing military dictatorship. While politician A Owaisi of AIMIM showed concern on the professionalism of the army as an institution and civilian supremacy. Even politicians like KC Tyagi of JD(U), an ally of the ruling government, showed concern on the issue. All this was equally echoed by all TV news channels, leading newspapers, and online news portals through various activists.

Conclusion: The future and the implication

In conclusion, we find the emergence of two concerns. First is the Indian army personnel coming up with partisan or non-partisan political comments leading to the anxiety of losing the professionalism of the army and civilian supremacy by the political fraternity.

Second is the code of conduct itself. These are age-old rules and restrictions. Though military laws across the world including the Supreme Court of the US, have clearly said that the army does not have universal rights for speech. For them, the nation comes first. At the same time, we find that the army code of conduct in the US and the UK have more freedom than that of India. The Indian rules are of the British era which then had a different objective.

The solution to both the concern is through the development of ethical norms and professional norms than through legal restrictions to political comments. Europe and the US, are already onto this through human rights activists and organisations like OSCE, working on the frameworks on political expression restriction and guidance for such citizen-soldiers or service members to provide more political and civil autonomy through such merging of military people voices with the general community for full integration of total population.

Author: Shaily Baag from National Law University, Odisha.

Editor: Tamanna Gupta from RGNUL, Patiala.

Chief Of Defence Staff

Reading time: 6-8 minutes.

On the 24th of December, 2019, the Union Cabinet chaired by Prime Minister Narendra Modi,  gave approval for the creation of a new post, the Chief of Defence Staff (CDS) in the rank of a four-star General equal to a Service Chief and charter of their duties. The main purpose for creating this post is to set up better coordination between the three services.

The Chief of Defence Staff will be acting as the Principal Military advisor to the Ministry of Defence on all the tri-service (Indian army, Indian Navy and Indian Air force) matters. Initially, this post was proposed by the Kargil Review Committee in 1999 and after that on multiple instances, the demand for this post had been raised by several veterans and experts. The CDS will offer impartial advice to the political leadership and will not exercise any other military command.

Role of this post

The Chief of Defence Staff will be first amongst all the service chiefs. Nevertheless, the CDS will be in a higher position in the list of protocol than other service chiefs.

The CDS will play the following roles:

  1. Advisory role: The Chief of Defence Staff will act as a primary advisor of Military to the Raksha Mantris. He will play a vital role in advising the tri-services.
  2. Administrative role: The tri-services organizations and those related to Cyber and Space will be administered by the Chief of Defence Staff and they will be under his command, but he cannot administer the effective functioning of the military activities.
  3. Military role: The Chief of Defence Staff may not exercise any military command, he cannot exercise his command over the tri-service chiefs. The tri-service chiefs exercise their military command over their respective duly notified services. They have the predominant role in the functioning of their specific tri-service organization.
  4. Other roles:

The CDS will:-

  • be a member of Defence Acquisition Council (DAC) and Defence Planning Committee (DPC);
  • intensify the share of indigenous machinery;
  • assess plans for out of area contingencies and other contingencies;
  • provide consolidated inputs to the relevant authorities and will warrant optimum utilization of the available infrastructure;
  • accomplish cooperation amongst the three services regarding their operations, repairs, maintenance, support services, logistics, training, communications, transport, etc.;
  • amalgamate and justify International cooperation plans,
  • strategize the military papers to consider the competent authority.

Why is it being created?

The new post, Chief of Defence staff is mainly created to bring about a better coordination among the tri-service organizations. This post is created to assure ‘jointmanship’ amongst the Indian Army, Indian Navy and Indian Air force. The primary aim is to institute unity among the Armed forces of Indian in training, staffing, procurement and operations.

The CDS will also be acting as a single point adviser of military to the Ministry. The CDS is appointed to augment the quality the military advice that is given through consolidation of service inputs to the political leadership and to ensure development in defence matters and military affairs.

The CDS will thus act as a defender of the modernization of Indian Armed force.

Ranks in the army

The Chief of Defence Staff has the rank of the principal military advisor to the Ministry of Defence, the CDS is the four star general. The CDS will be the secretary of the Implementing committee and will be the primary advisor to the newly created Department of the Military Affairs (DMA).

The CDS will acquire the same rank as the three service chiefs acquire, they are also four-star officers. The Chief of Defence Staff will be first amongst the equals and be ahead in protocol as a four star officer.

The Chief Defence will exercise military command over the newly formed agencies for Cyber and Space warfare. The tri-service organizations will be commanded over by their respective chiefs in service. 

How will the CDS be appointed?

The appointment of the Chief of Defence Staff has not yet been notified. However, the first Chief of Defence Staff has been appointed on the 30th of December, 2019, by the President of India on the recommendation of the Cabinet of India. The Cabinet of India will nominate a person for the post of Chief of Defence Staff on the basis of his service to the country and such person shall be then appointed with the consent of the President of India.

First Chief of Defence Staff

The first appointee of the post of Chief of Defence Staff is Army Chief General Bipin Rawat. He was appointed as the first Indian CDS on the 30th of December, 2019. He was retiring on the 31st of December, 2019, but now he will serve for 3 years as the Chief of Defence Staff.

The tenure has been extended for 3 years as Rawat turns 62 years old in March, 2020, through amended rules of armed force which state that the tenure of the CDS is 3 years from the date of appointment or 62 years, whichever is earlier.

His position with respect to three other generals

The Chief of Defence Staff is not only the head of the Department of Military Affairs but also is the Permanent Chairman of the Staff Committee Chiefs. He acts as the principal military adviser to the Ministry of Defence on all the matters about tri-services. The three chiefs of the tri-services recommend the Ministry on their specific services. The CDS may not exercise any military command over the three services.


This post was created by the Union Cabinet to make the military power of the nation to work in unison and make developments to the existing military operations. It was brought in to promote more efficiency and effectiveness in the operation of the military powers.

The Prime Minister during his Independence day’s speech while introducing this post addressed the nation saying that our nation should not have a fragmented military approach, there must be unity and coordination among the three services and that they must work with the same pace simultaneously which must be pertinent to the hope of people.

This system was created to bring an effective leadership to the armed force who can make decisions that are in line with the changing environment of security and war with the world.

Author: Dhanya G from SASTRA Deemed University, Thanjavur.

Editor: Farsana Sadiq from Faculty of Law, Jamia Millia Islamia.

Explained: Chief of Defence Staff

Reading time: 5-6 minutes.

Ever since surgical strike and the Balakot air strike, Indians have developed a very keen interest in the operations being carried out by our forces and other reforms and developments. Kudos to the defence forces for their courageous operations which have played a vital role in bringing a wave of unity, nationalism and a belief that India will no longer tolerate terrorism and those supporting it.

In his Independence Day speech from Red Fort, Prime Minister Narendra Modi announced the creation of the post of CDS: Chief of Defence Staff. “Our forces are India’s pride. To further sharpen coordination between the forces, I want to announce a major decision from the Red Fort: India will have a Chief of Defence Staff: CDS. This is going to make the forces even more effective”, Mr. Modi said.

Even the former defence minister Manohar Parrikar said that he considers the creation of the post of Chief of Defence Staff (CDS) as “a must”. He also said that the Ministry of Defence (MoD) was engaged in working out a mechanism for the post. In effect, CDS is to be the head of all three services, namely, the army, navy and air force. The mottos for creation of this post are many but the main is to bring coordination and integration among all three services.

What purposes will the CDS serve?

CDS will be the head of all three services and will be advisor to the government on various defence related issues like weaponry, training, pension schemes, logistics of all the three services. As per the current scenario, we are aware that we have two hostile nuclear-powered neighbours who pose a great security threat. Long term planning, coordination and integration among the defence forces is necessary and it will be brought about by the CDS.

It will help in joint planning and maximum utilization of resources by joint training. Also, honourable defence minister Rajnath Singh’s big statement on India’s nuclear policy: “Have adhered to no-first-use, future depends on circumstances” makes it very clear that the CDS will be the advisor to the Prime Minister on nuclear issues.

What is the background for creation of this post?

The proposal of CDS is two decades old. It was first made after the Kargil war by the K. Subramanyam Committee which was appointed in 1999 to recommend military reforms. However, due to lack of political will and consensus among the political parties and the three services, the proposal never saw light of the day.

Also, the GOM – the group of Ministers in the Atal Bihari Vajpayee led NDA government who were tasked with studying the Kargil report also recommended the creation of the post of CDS. The Kargil report committee and the Group of ministers emphasised on the urgent need of military reforms and a five-star CDS who will bring about integrity, integration and synergy between the three services.

The Naresh Chandra committee in 2012 also recommended the appointment of a Permanent Chairman of Chiefs of Staff Committee (COSC) as a midway to allay apprehensions over the CDS. Lt General D.B. Shekatkar (retd) Committee which submitted its report in December 2016 had 34 recommendations pertaining to the tri-services which also recommended the creation of CDS post.

Why was the proposal not implemented so far?

All these years, the proposal was not implemented for the reason that there was no political will and even there were no backers for this even in the defence bureaucracy. The three services never together came forward in support of this proposal. Government was worried that making CDS powerful will make him autocratic and arbitrary. Air force and navy opposed it as they were sure that it will result in its own loss of supremacy and that CDS would be dominated by army.

What is the current scenario?

Currently, the senior most of the three Chiefs functions as the Chairman of COSC. But it is an additional role and the tenures have been very short and limited. For instance, Air Chief Marshal (ACM) B.S. Dhanoa took over as the Chairman of COSC on May 31st from outgoing Navy Chief Adm Sunil Lanba.

However, ACM Dhanoa will be in the role for only a few months as he is set to retire on September 30th after which the baton will pass on to Army Chief General Bipin Rawat who will then be the senior most. General Rawat too is set to retire on December 31st after three years in office. So, as of now, there is no stability as the tenure is for short durations.

Has India reached a high time for the creation of CDS?

India is facing regional clashes; also, there are threats from some militants in Kashmir who have a tendency to get influenced by terrorist groups and an enemy country. Therefore, it has become imperative for national security and integrity reasons that a CDS be appointed. CDS will look after the strengths, weaknesses and integration of all the three services in order to deal with the looming security threats as well as complex challenges emerging from a hostile nuclear environment.

How are defence experts reacting to this development?

Former Air Marshal P.K. Barbora says that move will be beneficial only if the CDS is made a part of the cabinet as well. “Now, to understand what is in the politicians’ minds or the higher echelons of security and strategy, the Chief of Defence Staff should be sitting in the Cabinet under all circumstances, because then he will have a better idea of the government’s thinking. Secondly, he will have a better idea with how the government deals with external and international issues and thirdly he would also be privy to how the govt is dealing with many issues like finances and internal security also” – he said.

V.P. Malik, who was the army chief during the Kargil war calls this a “major step” towards military reform. “Now that we are going to have a CDS, his direct responsibility will be, of course, all the nuclear outfits and all the nuclear organisations and outfits that we have, including the strategic command. The other responsibility would be of ensuring coordination and jointness so that all the three services work together and the inter-operability improves amongst the three services. Plus, if there are any differences among the services, he will be able to sort it out and he will also have the direct access to the Prime Minister and will be kind of a consultant of defence issues” – he said.

In conclusion…

CDS will be a revolutionary and one of the great military reforms if the government and the defence bureaucracy together clear the hurdles which still exist in the implementation of this system. Also, the powers of CDS needs to be well defined so that it does not end up being just another ineffective name-sake military office. CDS will definitely prove to be a modern and most effective way to prepare defence forces to meet today’s challenges.

-This article is brought to you in collaboration with Deeksha Kathayat from Dr. D.Y. Patil Law College, Nerul.