The Economics of ‘Make in India’ Over ‘Buy (Import)’ Decision in Selected Technologies for the Indian Navy

Abstract

Indian Navy has embarked upon an ambitious fleet expansion, and modernization programme Indian Prime Minister Narendra Modi during the International Fleet Review at Visakhapatnam, India, in February 2016 underlined the need for a ‘modern and multidimensional Navy’. Indian Navy has already established itself as a ‘Builders’ Navy with a majority of its warships being built indigenously. However, a submarine plays a vital role in sea denial and sea control roles of a nation. Therefore, in pursuance of the role laid down in the Maritime Security Strategy Document, published by the Indian Navy in the year 2015, Indian Navy is also laying equal emphasis on indigenous submarine construction. Indian Navy has planned an indigenous submarine construction programme, christened P75 (I). Indian Navy is driving towards achieving a significant indigenous content in P75 (I), in line with the ‘Make in India’ initiative. Accordingly, it is mandatory for the foreign shipyards to forge a strategic partnership with a select Indian shipyard where the submarines will be built. With an outlay of about INR. 60,000 Cr (USD 8 Billion), this programme is seen as a game changer in indigenous submarine construction. The P75 (I) project throws open significant opportunities in indigenous development of submarine equipment. Today, a majority of submarine equipment are imported. The aim of this paper is to suggest a road map for indigenous manufacture of equipment and systems for P75 (I). The research methodology will involve literature review as secondary methodology, interviews with stakeholders and pilot studies as primary research methodology. It will be an exploratory research. There is a significant cost advantage for the country and Indian industry in indigenous manufacture of this equipment. Further, the indigenously developed equipment is expected to have export potential and applications in civil industry.