Recent announcements provide proof of India’s increasing commitment to defense modernization and give some insight into India’s military priorities. Strategic capabilities such as nuclear missile technology (both land and submarine launched), a blue-water navy, and space technology will likely see some of the largest funding increases and are areas that could pose a real challenge to other major powers in Asia in the near future.
Public statements such as those by the chief of staff of the Indian Nav y at London’s International Institute for Strategic Studies (IISS) rev eal India’s strategic military priorities. Among them is the nation’s interest in ensuring its relev ance as the U.S. military “piv ots” to the A sia Pacific. In addition to ex panding India’s military might, the dev elopment of new military technologies could inv igorate sales for weapons ex porters – particularly those that specialize in military parts and components.
Background
India’s military has grown dramatically over the past decade. In a March 2012 white paper, the Washington D.C.-based Center for Strategic and International Studies reported significant increases in Indian military investment since 2001. India’s Ministry of Defense, according to the white paper, plans to spend “approximately US $80 billion on military modernization by 2015.” Between 2006 and 2010, it surpassed China as the largest weapons importer in the world.
“In less than a decade, and starting at zero, we have seen the FMS [Foreign Military Sales] program grow to a combined total case value of approximately $6 billion,” wrote the authors of a 2011 Department of Defense report. Another report, led by Deloitte, noted in 2010 that Indian defense modernization was a clear opportunity for exporters. “Overall, the acquisitions budget will grow from around US $17 billion in 2011 to US $19.20 billion in 2015, an increase of nearly 15%.”
Investments in military modernization are already starting to pay off. In April 2012, India successfully test launched its new Agni-V solid-fuel, three-stage nuclear missile with a range of 3,000 miles. India is also pursuing an Agni-VI variant with improved capabilities, including increased range.
At a June 25 speech before IISS, the Indian Navy’s chief of staff, Admiral Nirmal Verma, detailed Indian military – particularly Indian Navy – investment and ideology. The admiral reported significant growth in the Indian Navy’s budget, noting that 2012 spending has reached record highs. “This year we crossed the 18% mark, with the Defense budget at US $36 billion,” he noted, adding that “…there is an increasing realization that the destiny of our nation is entwined with our maritime destiny.”
Also of note, Admiral Verma pointed out advancements in Indian submarine-launched nuclear missiles. “The Indian Navy is poised to complete the triad, and our maritime and nuclear doctrines would then be aligned to ensure that our nuclear insurance will come from the sea.” Other news sources have described India’s pursuit of a ballistic missile submarine by 2015, which would be equipped with the K- 15 Sagarika submarine-launched ballistic missile.
On modernization of the Indian Navy, Verma said that New Delhi is in the midst of a “decade-plus” effort with a “medium term” goal of having “at least two fully operational and combat worthy carriers available at any given time.” He also referenced India’s intention of developing a cadence of production, “The induction program is structured to continue at a pace such that over the next five years we expect to induct ships and submarines at an average rate of five platforms per year, provided the yards deliver as per contracted timelines. Our air element is also being strengthened, with the induction of Mig 29K fighters, P8I maritime reconnaissance aircraft as well as multirole helicopters.”
Another Indian defense leader was quoted on June 27, providing further insight into the nation’s effort to develop a hypersonic high-speed strike missile. Sivathanu Pillai, CEO of the joint Russian-Indian venture BrahMos Aerospace, said that the hypersonic BrahMos-2 missile will be fully functional by 2017. In addition to naval and missile technology, India has reportedly invested heavily in military satellite technology since the early 2000s.
India’s investments in its military are increasing at the same time that its economy is beginning to falter. The credit rating agency Standard & Poor’s said last month that India may become the first BRIC nation to lose its investment-grade credit rating, pointing to slowing economic growth and a political situation that has stalled sound decision-making.
Analysis
Despite current economic challenges, India, the world’s largest weapons importer, will remain a major destination for U.S. and Russian arms exports, as well as exports from a number of other countries. Not all weapons firms will benefit, however. Some of India’s strategic defense priorities will not be a major part of foreign military sales due to arms export controls. Sales of less sensitive parts and components will likely continue to be a hot market for global weapons exporters.
Top-tier weapons firms able to navigate the Department of Defense’s Foreign Military Sales system should see continued Indian demand for military aircraft, especially those associated with a modern navy. Firms with an established presence in India and knowledge of the markets, policies and business practices will also have an advantage.
The fact that rapid investments are being made in strategic military technologies – land and sea-launched nuclear missiles, space systems, hypersonic missiles, and bluewater navy capability – shows that India is focusing its defense posture on systems that enable it to extend its military reach not just towards its neighbors in South Asia, but potentially throughout the hemisphere.
India’s new Agni-V nuclear missile was recently successfully tested and will provide India with a long-range weapon capable of striking Beijing. If the recent remarks by the Indian Navy’s chief of staff are correct, New Delhi is also closing in on achieving a submarine-based nuclear missile. Such a capability would be arguably even more significant than the Agni-V test, bringing India into a club of nations that only currently includes the United States, Russia, the U.K., France and China.
Indian naval investment will have the immediate payoff of building global perception of the country as one that is growing into a major power. Modernization efforts still have a long way to go, but a 2016 deployment of an indigenous aircraft carrier would still put India just a year behind China’s current plans to add two carriers by 2015.
Conclusion
Global arms exporters will likely continue to reap the benefits of New Delhi’s commitment to defense modernization. Even with India facing increasing pressure to reign in government spending, strategic capabilities such as nuclear missile technology (both land and submarine-launched), a blue-water navy, and space technology will likely see stable or increased funding, benefiting weapons exporters that specialize in military parts and components. Of most near-term strategic benefit to New Delhi would be the successful development of submarine-launched nuclear missile technology – a capability that is held only by a handful of major powers.
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