Political regimes and self-reliance in the Indian arms industry

ABSTRACT

This study assesses the effectiveness of government initiatives and explores the impact of a shift in political regimes in reducing arms imports. We employ an Interrupted Time Series design using the Prais-Winsten Regression to assess the impact of India’s increased focus on achieving self-reliance in arms manufacturing with the change in political regimes in 2014. The time period analyzed is from 2004 to 2022. Our findings suggest that policies associated with the change in political regimes have succeeded in curbing arms imports. This paper offers insights into the broader implications of political regime changes on a nation’s quest for self-reliance in arms manufacturing, making it valuable for defense analysts and scholars specializing in international relations and arms trade.

Disclosure statement

The author(s) hereby certify that they have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers’ bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent-licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript. No generative AI or LLM tools were used to prepare this manuscript.

List of Acronyms

Table

Notes

^1. Pardesi MS, “Is India a Great Power? Understanding Great Power Status in Contemporary International Relations,” Asian Security [Internet] 11, no. 1 (2015): 1–30. doi:10.1080/14799855.2015.1005737

^2. Wezeman PD, Kuimova A, Wezeman ST, “Trends in International Arms Transfers,” (2021). Stockholm. doi:10.55163/CBZJ9986.

^3. Patil S, “Defence budget 2022–23: Securing India,” Pursuing Self-Reliance (2022).

^4. Behera L, ““Make in India” for Defence: A Roadmap,” IDSA (2015): 1–8.

^5. Dash J, Kumar D. “Creation of Vibrant SMEs for Defence Corridors,” CLAWS Journal (2018).

^6. SIPRI, “Arms Transfers Database,” The Stockholm International Peace Research Institute (2022).

^7. Yakovlev P, “Arms Trade, Military Spending, and Economic Growth,” Defence and Peace Economics 18, no. 4 (2007): 317–338. doi:10.1080/10242690601099679

^8. Looney RE, Frederiksen PC, “Arms imports and third world growth in the 1980s,” in: Def Spend Econ Growth, (place unknown, 1989). doi:10.4324/9780429040863–12

^9. Yolcu Karadam D, Yildirim J, Öcal N, “Military expenditure and economic growth in Middle Eastern countries and Turkey: a non-linear panel data approach,” Defence and Peace Economics 28, no. 6 (2017): 719–730. doi:10.1080/10242694.2016.1195573

^10. Chary S, “The Nexus Between Arms Imports, Military Expenditures, and Economic Growth of the Top Arms Importers in the World: A Pooled Mean Group Approach,” Journal of economic studies (2023). doi:10.1108/JES-05-2023–0265

^11. Mehta Y, Rajan AJ, “Manufacturing Sectors in India: Outlook and Challenges,” Procedia Engineering 174 (2017): 90–104. doi:10.1016/j.proeng.2017.01.173

^12. Pardesi MS, Matthews R. “India’s tortuous road to defense- Industrial self-reliance,” Defence & Security Analysis 23, no. 4 (2007). doi:10.1080/14751790701752451.

^13. Matthews RG, “The Development of India’s Defence‐Industrial Base,” Journal of Strategic Studies [Internet] 12, no. 4 (1989): 405–430. doi:10.1080/01402398908437389

^14. Kargil Review Committee, “The Kargil Review Committee Report,” [Internet], New Delhi, 1999, https://www.claudearpi.net/wp-content/uploads/2019/08/Kargil-Report.pdf (accessed 2023 Dec 12).

^15. Bitzinger RA, “Comparing Defense Industry Reforms in China and India,” Asian Polit Policy 7, no. 4 (2015):531–553. doi:10.1111/aspp.12221

^16. Behera L, “Defence Planning in India,” Journal of Defefence Studies [Internet] 4, no. 3 (2010). https://www.idsa.in/system/files/jds_4_3_lkbehera.pdf

^17. Devore MR, “Arms Production in the Global Village: Options for Adapting to Defense-Industrial Globalization, Security studies [Internet] 22, no. 3 (2013):532–572. doi:10.1080/09636412.2013.816118

^18. Brauer J, Chapter 30 Arms Industries, Arms Trade, and Developing Countries [Internet] (place unknown, 2007), 973–1015. doi:10.1016/S1574–0013(06)02030–8

^19. Kurç Ç, Neuman SG, “Defence industries in the 21st century: a comparative analysis,” Defence Studies [Internet]. 17, no. 3 (2017):219–227. doi:10.1080/14702436.2017.1350105

^20. Neuman SG, Kurç Ç, “Conclusion: the need for continuous in-depth and comparative study,” Defence Studies [Internet] 17, no. 3 (2017):317–325. doi:10.1080/14702436.2017.1350106

^21. Markowski S, Hall P, “Challenges of defense procurement,” Defence and Peace Economics [Internet] 9, no. 1–2 (1998):3–37. doi:10.1080/10430719808404892

^22. Pardesi MS, Matthews R, “India’s Tortuous Road to Defence-Industrial Self-Reliance,” Defence & Security Analysis 23, no. 4 (2007):419–438. doi:10.1080/14751790701752451

^23. Das S, “An Overview of Indian Defence Industry: A Transformative Perspective. Claws Journal Warf Studies (Summer 2019) (2019):123–137.

^24. Bitzinger RA, “China’s Defense Technology and Industrial Base in a Regional Context: Arms Manufacturing in Asia,” Journal of Strategic Studies [Internet] 34, no. 3 (2011):425–450. doi:10.1080/01402390.2011.574985

^25. Gupta A, “The Indian Arms Industry: A Lumbering Giant?” Asian Survey [Internet] 30, no. 9 (1990):846–861. doi:10.2307/2644525

^26. Bitzinger RA, “Asian arms industries and impact on military capabilities,” Defence Studies [Internet] 17, no. 3 (2017):295–311. doi:10.1080/14702436.2017.1347871

^27. Bitzinger RA, “Defense Industries in Asia and the Technonationalist Impulse,” Contemp Secure Policy 36, no. 3 (2015):453–472. doi:10.1080/13523260.2015.1111649

^28. Cheung TM. 2017. Commentary on Asian arms industries and impact on military capabilities. Defence Studies [Internet]. 17(3):312–316. doi:10.1080/14702436.2017.1345279

^29. Devore M, “Arms Production in the Global Village: Options for Adapting to Defense-Industrial Globalization,” Security studies 22, no. 12 (2013):532–572.

^30. Bibby L, Dehe B, “Defining and assessing industry 4.0 maturity levels – case of the defense sector,” Production Planning & Control 29, no. 12 (2018):1030–1043. doi:10.1080/09537287.2018.1503355

^31. Pardesi MS, Matthews RG, “India’s Tortuous Road to Defence-Industrial Self Reliance,” Defence & Security Analysis 23, no. 4 (2007):419–438.

^32. Rossiter A, Cannon BJ, “Making arms in India? Examining New Delhi’s renewed drive for defense-industrial indigenization,” Defence Studies 19, no. 4 (2019):353–372. doi:10.1080/14702436.2019.1685880

^33. Behera, Indian Defence Industry: An Agenda for Making in India (place unknown, 2016).

^34. Patil S, Manhas N, Accelerating the Pace of India’s Defence Research (place unknown, 2022).

^35. Patil S, Defence budget 2022–23: Securing India, Pursuing Self-Reliance (place unknown, 2022).

^36. Behera L. 2015. “Make in India” for Defence : A Roadmap. IDSA.

^37. Bitzinger RA, “Towards a Brave New Arms Industry?” Adelphi Papers 43, no. 356 (2003):63–79. doi:10.1080/714027876

^38. Behera L, Indian Defence Industry: Issues of Self-Reliance (place unknown, 2013).

^39. Pant H V., Bhan A, Hitting the Mark on Defence Exports (place unknown, 2022).

^40. Catrina C, “Arms Transfers and Dependence,” [Internet] (London: Routledge, 2021). doi:10.4324/9781003176091.

^41. Ningthoujam AS, “Arms Trade and National Security: An Indian Perspective,” In: Facet India’s Secur [Internet] (London: Routledge India, 2021). doi:10.4324/9781003200291.

^42. Chaudhary M, “Indian Defense Sector Landscape: Challenges and Opportunity for Private Players in Defense Manufacturing. In: National Security in India, (place unknown: Brill | Nijhoff, 2020), 213–232. doi:10.1163/9789004427563_015

^43. Bharadwaj D, “Make in India” in defense sector: A distant dream,” (place unknown, 2018).

^44. Moore M, “Arming the Embargoed: A Supply-Side Understanding of Arms Embargo Violations,” Journal of Conflict Resolution [Internet] 54, no. 4 (2010):593–615. doi:10.1177/0022002710369085

^45. Government of India, “Defence Production and Export Promotion Policy (DPEPP) 2020 [Internet], [place unknown], 2020, https://www.ddpmod.gov.in/sites/default/files/pdfupload/DraftDPEPP.pdf

^46. Government of India, “Strategy For Defence Exports,” [Internet] [place unknown], 2020, https://www.ddpmod.gov.in/sites/default/files/STRATEGYFOR DEFENCEEXPORTS.pdf

^47. Pamp O, Thurner PW, “Trading Arms and the Demand for Military Expenditures: Empirical Explorations Using New SIPRI-Data,” Defence and Peace Economics [Internet] 28, no. 4 (2017):457–472. doi:10.1080/10242694.2016.1277452

^48. Srivastava R, “FDI in the Indian Defence Sector: Decoding the 3Ps,” Journal of Academic Research in Economics 7, no. 3 (2015):393–410.

^49. Saini P, “Role Of FDI In Economic Development Of India,” Think India 22, no. 3 (2019).

^50. Behera L, “India’s Defence Offset Policy,” Strategic Analysis [Internet] 33, no. 2 (2009):242–253. doi:10.1080/09700160802518718

^51. Mahajan D, “Foreign Direct Investment in Defence Sector in India : Problems and Prospects,” Journal of Commerce and Trade XI, no. 1 (2016).

^52. Dash RK, Parida PC, “FDI, services trade and economic growth in India: empirical evidence on causal links,” Empirical economics [Internet] 45, no. 1 (2013):217–238. doi:10.1007/s00181-012-0621-1

^53. Weiss M, “State vs. market in India: How (not) to integrate foreign contractors in the domestic defense-industrial sector,” Comp Strateg. 37, no. 4 (2018):286–298. doi:10.1080/01495933.2018.1497323

^54. Department for Promotion of Industry and Internal Trade, “Quarterly Factsheet on Foreign Direct Investment (FDI) Inflows, [place unknown], 2023.

^55. Luo Y, Xue Q, Han B, “How emerging market governments promote outward FDI: Experience from China,” Journal of world business [Internet] 45, no. 1 (2010):68–79. doi:10.1016/j.jwb.2009.04.003

^56. Janu R, Kaur K, “Make in India Programme: Industry Perspective,” Cent L Warf Studies (2015).

^57. Cheung T, “Commentary on Asian arms industries and impact on military capabilities,” Defence Studies 17, no 3 (2017):312–316.

^58. Zhu L, Jeon BN, “International R&D Spillovers: Trade, FDI, and Information Technology as Spillover Channels,” Review of International Economics [Internet] 15, no. 5 (2007):955–976. doi:10.1111/j.1467–9396.2007.00691.x

^59. Chowdhury P, Anuradha A, “Will Inward Foreign Direct Investment Through Automatic Route In Manufacturing Sector Bring An Instrumental Change in India’s Growth?” Academy of Accounting and Financial Studies Journal 25, no. 3 (2021).

^60. Press Information Bureau, “FDI in Defence Sector. New Delhi, India,” [Internet], [place unknown], 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1844610#:~:text=2020%2C has liberalized and allowed,494 Crores

^61. Wulf H, “Arms Industry Unlimited: The Economic Impact of the Arms Sector in Developing Countries. in Structural Change, Economic Interdependence and World Development [Internet] (London: Palgrave Macmillan UK, 1987), 203–217. doi:10.1007/978-1-349 09,117-1_14

^62. Looney RE, “Economic factors affecting the third world arms trade,” The International Trade Journal [Internet] 2, no. 4 (1988):377–407. doi:10.1080/08853908808523651

^63. Brzoska M, “The Impact Of Arms Production In the Third World,” Armed Forces & Society [Internet]. 15, no. 4 (1989):507–530. doi:10.1177/0095327X8901500403

^64. Chary S, “The nexus between arms imports, military expenditures and economic growth of the top arms importers in the world: a pooled mean group approach,” Journal of Economic Studies (2023). doi:10.1108/JES-05-2023–0265

^65. Levine P, Mouzakis F, Smith R, “Prices and quantities in the arms trade×,” Defence and Peace Economics [Internet] 9, no. 3 (1998):223–236. doi:10.1080/10430719808404902

^66. Holtom P, Bromley M, “The International Arms Trade: Difficult to Define, Measure, and Control,” [place unknown], 2010, https://www.researchgate.net/profile/Paul-Holtom-3/publication/265643460_The_International_Arms_Trade_Difficult_to_Define_Measure_and_Control/links/541771f90cf2f48c74a4093b/The-International-Arms-Trade-Difficult-to-Define-Measure-and-Control.pdf

^67. Ewusie JE, Soobiah C, Blondal E, Beyene J, Thabane L, Hamid JS, “Methods, Applications and Challenges in the Analysis of Interrupted Time Series Data: A Scoping Review,” Journal of Multidisciplinary Healthcare 13 (2020):411–423. doi:10.2147/JMDH.S241085

^68. Wagner AK, Soumerai SB, Zhang F, Ross-Degnan D, “Segmented regression analysis of interrupted time series studies in medication use research,” Journal of Clinical Pharmacy and Therapeutics 27, no. 4 (2002):299–309. doi:10.1046/j.1365–2710.2002.00430.x

^69. Turner SL, Karahalios A, Forbes AB, Taljaard M, Grimshaw JM, Korevaar E, Cheng AC, Bero L, McKenzie JE, “Creating effective interrupted time series graphs: Review and recommendations,” Research Synthesis Methods 12, no. 1 (2021):106–117. doi:10.1002/jrsm.1435

^70. Linden A, Adams JL, “Applying a propensity score-based weighting model to interrupted time series data: improving causal inference in programme evaluation,” Journal of Evaluation in Clinical Practice 17, no. 6 (2011):1231–1238. doi:10.1111/j.1365–2753.2010.01504.x

^71. Bottomley C, Ooko M, Gasparrini A, Keogh R, “In praise of Prais‐Winsten: An evaluation of methods used to account for autocorrelation in interrupted time series,” Statistics in Medicine 42, no. 8 (2023):1277–1288. doi:10.1002/sim.9669

^72. Bitzinger R, “Defense Industries in Asia and the Technonationalist Impulse,” Contemporary security policy 36, no. 3 (2015):453–472.

^73. Ministry of Defence. 2023. “Aatmanirbharta” in Defence: MoD approves 4th Positive Indigenisation List of 928 strategically-important Line Replacement Units/Sub-systems/Spares & Components [Internet]. [place unknown]; [accessed 2023 Dec 12]. https://pib.gov.in/PressReleasePage.aspx?PRID=1923971

^74. Ministry of Defence, “MoD’s big push to Atmanirbhar Bharat initiative,’” [Internet],” [place unknown], 2020, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1644570 (accessed December 12, 2023).

^75. Pandit R, “India announces second progressive arms embargo list to boost domestic defense production,” The Times of India [Internet], 2021, https://timesofindia.indiatimes.com/india/india-announces-second-progressive-arms-embargo-list-to-boost-domestic-defence-production/articleshow/83119389.cms (accessed December 12, 2023).

^76. Kumar M, “Defence Procurement: Negative Lists with Positive Implications,” IDSA [Internet], 2022, https://idsa.in/idsacomments/Defence-Procurement-mkumar-300922 (accessed December 12, 2023).

^77. Pant H V., Bommakanti K, “India’s national security: Challenges and dilemmas,” International Affairs 95, no. 4 (2019). doi:10.1093/ia/iiz053.

^78. Sinha S, “India’s Military Modernisation: Role and Impact of France,” Journal of Asian Security and International Affairs 10, no. 3 (2023):325–341. doi:10.1177/23477970231207256

^79. Subrahmanyam K, “Self‐reliant defense and Indian industry,” Strategy Analysis 24, no. 7 (200). doi:10.1080/09700160008455283.

^80. Rossiter A, Cannon BJ, “Making arms in India? Examining New Delhi’s renewed drive for defense-industrial indigenization,” Defence Studies 19, no. 4 (2019):353–372.

^81. Government of India, Defence Production and Export Promotion Policy 2020. [place unknown].

^82. Patel P, Patil S, Vishwanathan A, “India’s Quest for Defence Indigenisation: A Case Study of the Indian Navy,” Journal of Asian Security and International Affairs 10, no. 3 (2023):364–394. doi:10.1177/23477970231207255

^83. Jaishankar D, “Acting East: India in the Indo-Pacific,” Brookings India Impact Ser 102 (2019): 019–02.

^84. Ministry of Defence, “Defence Procurement Procedure [Internet],” [Place unknown, https://www.vifindia.org/sites/default/files/DefenceProcurement Procedure,2006.pdf (accessed December 12, 2023).

Additional information

Notes on contributors

Shreesh Chary

Shreesh Chary is a graduate student specializing in Development Economics at the University of Nottingham. He holds a Bachelor of Science (Honours) degree in Economics from Symbiosis School of Economics, Symbiosis International (Deemed University).

Krishna Kanta Roy

Krishna Kanta Roy is an Assistant Professor at Symbiosis School of Economics, Symbiosis International (Deemed University), Pune, India. He teaches courses like Econometrics and International Trade at the undergraduate level. His research interest lies in technology integration and artificial intelligence in education, defense and trade sectors pertaining to India. He is currently pursuing PhD in the area of Education and Technology from Symbiosis International University.