India approves $6bn military spend as Asian arms race escalatesNew Delhi to upgrade equipment with purchases including 111 naval helicopters
India’s government has given the go-ahead for the acquisition of $6.5bn in military hardware, including 111 naval helicopters, as New Delhi seeks to upgrade its ageing defence equipment, amid an escalating arms race in Asia.
The move comes as Prime Minister Narendra Modi’s government struggles to fulfil its promise of a $250bn military modernisation, with the purchase of new equipment slowed by strict bidding conditions and a series of scrapped tenders.
Mr Modi’s decision three years ago to cancel an order of 126 Rafale fighter jets — which were to be partially made in India — and instead spend €8bn to buy 36 Rafale jets off the shelf from France has also been contentious, upending what had been a decade-long competitive bidding process.
Defence analysts said the purchase of a mere two squadrons — when India needed nearly four times that number — suggested Mr Modi was pursuing an ad hoc, piecemeal acquisition strategy that would hinder military preparedness.
Annual defence spending across Asia has more than doubled — to $450bn — since the start of the century, led by a sharp surge in military spending by China, which has allocated more than $200bn for its defence this year.
India is on track to spend $62bn on its defence in the current financial year, up from $47bn five years ago. But more than two-thirds of Indian military spending goes towards the salaries of its 1.4m-strong armed forces and the pensions for 2m military retirees, leaving relatively little for equipment and new weapons systems.
Over the weekend, India’s defence acquisition committee approved $3bn for the purchase of 111 utility helicopters for the navy, which will be provided under a new programme that allows foreign defence contractors to work with Indian private sector companies to make defence equipment.
Previously, production of military hardware in India was restricted to public sector companies with foreign partners but Mr Modi has promised to open the sector to private participation.
“This is the first tender being initiated under the strategic partner mode, where an Indian private sector vendor builds the platform in India with technology transfer from a foreign owner,” says Ajai Shukla, a defence analyst. “This unlocks the door for the entry of the private sector in defence production.”
Russia’s Kamov is expected to offer its Ka-226 model, which it is producing with India’s state-owned Hindustan Aeronautics, for the naval helicopter tender, vying with companies such as Airbus, the European aerospace group, for the contract.
Large Indian companies such as the Mahindra Group, Tata, Anil Ambani’s Reliance, Kalyani and Larsen & Toubro have all been awarded licences for defence production and could partner foreign defence technology companies to produce the helicopters.
Mr Shulka said the approvals granted at the weekend were essentially the start of the acquisition process, where the government “accepts that it is necessary to induct this platform into service”.
However, he said it was likely to be years before a deal was signed, given India’s painfully slow decision-making process when it came to acquiring military hardware, especially when it involved foreign companies.
“The whole procurement lies ahead,” he said on Sunday. “The decision sanctioned yesterday will take at least five years for final decision-making — let alone production. Nobody wants to make a decision on procurement because they are all generalist bureaucrats, terribly afraid of signing on the dotted line.”
In addition to the helicopters, the government also approved the acquisition of another $3.5bn worth of equipment, including 150 locally designed and developed advanced artillery guns — seen as a precursor to an order of up to 1,500 artillery guns, as the army replaces its outdated howitzers.
India’s Defence Research and Development Organization has developed the new long-range Dhanush howitzer in collaboration with many public and private companies. The Dhanush recently completed testing and the army plans to induct the first batch this year.
The government also gave the nod for the procurement of 24 anti-submarine helicopters and 14 vertically launched short-range missile systems.