India Defence Opportunity - ISTAR

Today, modern day defence has moved into a hybrid era - artificial intelligence, unmanned aircrafts, drones, precision guidance systems and cybersecurity are critical capabilities that countries need to harness and develop with complete control and autonomy to emerge as global superpowers. US and China, as two prime nations channelled 12% and 20% (respectively) of their defence expenditure on research and development. But, India’s push so far has been underwhelming with just 6% of our defence allocation getting funnelled into R&D.  

Through history, advanced economies maintained their dominance and supremacy by ensuring they are at the forefront of developing and deploying modern defence technologies that are manufactured and procured via independent supply chains (to have a tight hold on geopolitical dynamics). 

On the other hand, despite being the 3rd highest military spender in the world, only about 30% of India’s defence equipment is manufactured domestically. We are highly dependent on foreign OEMs and suppliers - primarily from Russia, Israel, and France for procuring defence equipment and this has always affected our pathway to gaining an upper hand in warfare.  

However, now, the advent of frontier technologies gives us the chance to leapfrog into a global force in the new age of hybrid and intelligent defence technologies.  Intelligence, surveillance, target acquisition and reconnaissance (ISTAR) is critical to any defence capability because effectiveness, coordination, mission planning, real-time/pre-emptive alert systems and lethality of response - all rely on effective ISR systems – which presents an exciting opportunity to advanced aviation focused ventures.   

Unmanned aerial systems (UAS), drones and high-precision sensing technologies are already redefining data collection and intelligence for ISR (recall the recent killing of Al-Qaeda leader in a precision drone strike). Infact, in 2020, 70% of the global UAS market constituted of military and law-enforcement agencies.  

Reminded by the folklore of Alan Turing’s unravelling of the enigma code, I have always maintained that ‘compute will be the core to any advanced economy’s military and diplomatic might’.  Hence, Quantum computing is an opportunity to stake a claim – because effectiveness of swarm technologies, cyber security and secure communication systems rely on superior quantum capabilities. China recently inaugurated a $10B research lab for quantum research and safe communication infrastructure, while their total investment is reported to be around $25B. Over 2019 and 2020, the US committed over $2.2B to quantum computing – inclusive of a fund that will set up 12 AI & Quantum research labs. The Indian Army, in it’s nascency is just beginning to take it’s first steps – with the first AI and quantum laboratory and centre that was inaugurated in January 2022.  

It is key to note that effectively developing technologies and capabilities domestically requires the setup of a robust and agile research infrastructure that is not exclusively driven by public sectors organisations, thus enabling and incentivising academia and private sector organisations is pivotal. US for example, has incentivised academic institutes for years and it provides substantial funding support—as much as US $3.5B annually. Interestingly, the US Department of Defense does only under 40% of it’s own R&D, while the rest is outsourced to private sector organisations in the US – that include both large private players (Lockheed Martin, Boeing, Raytheon) as well as deep tech start-ups that are pushing the edges of technology (SpaceX, Shield AI, Percipient.ai). In fact, traditional giants like Lockheed Martin have also turned to DeepTech start-ups to tap into the latest technologies with their own investment arms. Just across 2020 and 2021, over 33 US start-ups have received funding from major defence contractors.    

India needs to enable an ecosystem to be able to leverage the advances in technology (across sectors) that can be applied to boosting our defence. Academic centres and private sector companies possess the resources, talent and capability to innovate, build and contribute – even at significantly low costs. Passionate founders that are leading deep tech technologies start-ups across cyber security, space situational awareness, adaptive manufacturing, artificial intelligence have shown immense potential and promise by virtue of developing PoC and pilots, but they still lacked effective channels and programs to actively participate in the defence economy.   

I believe now we are finally at a point where we are taking the steps for better private-public collaboration. In this year’s fiscal budget, Government of India allocated 25% of the total R&D budget for private sector organisations along and launched several schemes (iDeX, Make in India) that can empower the private sector. In addition, we reserved 68% of the total defense capex for domestic procurement exclusively – which is likely to provide the much-needed spark. 

Boosting research in deep technologies will be key to increasing India’s GDP (beyond $10T) and empowering us to take an independent assertive stand in global geopolitics and modern warfare – not only to follow and defend but dominate and protect.