Beyond Screwdrivergiri: Why The Defence Secretary Should Heed The Economic Survey

India's defence secretary, Rajesh Kumar Singh, recently attended the signing of a memorandum of understanding between Adani Defence & Aerospace and Italy's Leonardo.

The deal aims to establish a helicopter-manufacturing ecosystem in India, targeting models such as the AW169M and AW109 Trekker for the armed forces' sizeable requirements.

Singh hailed it as a milestone, bringing together two respected industrial entities. Yet the event drew sharp criticism online and in defence circles. Critics decried it as another instance of screwdrivergiri, the derisive term for assembling imported kits with minimal local value addition or technological gain.

There is little wrong, in principle, with Indian firms forming joint ventures with foreign partners to produce defence equipment. India's armed forces need modern helicopters urgently. The army, navy and air force together may require over 1,000 new units in the coming decade. Building everything from scratch would take decades and vast sums that the exchequer does not have.

Joint ventures offer a faster route. They bring proven designs, production know-how and, ideally, some technology transfer. Other countries have climbed the ladder this way. South Korea began with licensed assembly of American fighters before developing the KF-21. Israel started with foreign partnerships before becoming a net exporter of advanced systems.

Encouraging more such tie-ups makes sense. Private Indian firms, from Adani to Tata and Mahindra, have entered defence in recent years, spurred by liberalised foreign direct investment rules (up to 74 per cent automatic) and positive indigenisation lists. Competition among them can drive efficiency and innovation where public-sector undertakings long dominated.

The Adani-Leonardo deal, if executed well, could create jobs, build supply chains and reduce import dependence, goals central to the Atmanirbhar Bharat initiative.

Yet the critics have a point. Too many past Indian defence collaborations have stopped at screwdriver level. Licensed production of Sukhoi Su-30MKI fighters or T-90 tanks transferred assembly skills but little design capability or intellectual property. India remains reliant on Russia for spares and upgrades decades later.

If the Adani-Leonardo venture merely imports knock-down kits for local screwing together, it will add another expensive assembly line rather than genuine capability. The armed forces would gain helicopters, but India would not gain the ability to design, modify or export next-generation ones.

This is where the government's role becomes crucial. It must strongly signal that joint ventures are welcome only if partners commit to meaningful investment in product development and research and development.

Contracts should mandate phased increases in local content that go beyond components to include design centres, testing facilities and IP sharing. Offsets, where foreign vendors reinvest part of the contract value in India, should prioritise R&D over mere subcontracting. Incentives such as tax breaks or priority in future tenders could reward firms that establish serious engineering teams.

Such signalling would align precisely with the message of the latest Economic Survey, tabled in Parliament just days before the Adani-Leonardo announcement. The Survey devotes considerable space to innovation as the key to India's geopolitical and economic leverage.

It notes with satisfaction that medium- and high-technology activities now account for 46 per cent of manufacturing value added, up from lower shares earlier. Yet it warns against complacency: India's gross expenditure on R&D remains stubbornly low at around 0.6-0.7 per cent of GDP, far below China's 2.4 per cent or Israel's 5 per cent. Private-sector contribution is particularly anaemic.

The Survey praises state-level initiatives such as Maharashtra's Defence and Aerospace Venture Fund, which channels capital to MSMEs for innovative projects. It argues that India must move beyond import substitution toward "strategic indispensability" in global value chains, producing high-value items that others cannot easily source elsewhere.

Innovation, the Survey stresses, is not a luxury but essential for resilience and influence. In defence terms, this means graduating from assembly to design leadership.

The defence ministry would do well to internalise these insights. Attending ceremonial signings is easy; shaping outcomes is harder. By tying approvals and contracts to verifiable R&D commitments, the government could turn joint ventures into genuine stepping stones.

Firms like Adani, with deep pockets and global ambitions, could be encouraged to set up advanced engineering centres rather than mere factories. Foreign partners, keen on India's large market, would have incentive to share more than basic assembly manuals.

Broader benefits would follow. Higher domestic R&D would spill over into civilian sectors, boosting exports and jobs in high-skill areas. It would also enhance security: a country that can modify and upgrade its own equipment is less vulnerable to sanctions or supplier whims.

India’s defence exports have climbed impressively to over Rs 23,000 crore last year, but the basket is still dominated by low-tech items, with only a handful of high-end systems, like BrahMos, making the list. True self-reliance requires exporting sophisticated systems that embody Indian intellectual property.

The Economic Survey is not a defence document, yet its prescriptions apply squarely to strategic sectors. It reminds policymakers that growth without innovation is fragile. For India to become the indispensable power it aspires to be, manufacturing, civilian and military alike, must climb the value chain.

The defence secretary, having graced the Adani-Leonardo event, should now ensure it delivers more than screwdrivers. The Survey provides the blueprint. The ministry needs only to follow it.