Funding crunch leaves Modi arms purchases a pipe dream
ARMED FORCES STILL EQUIPPED WITH WEAPONS THAT ARE LARGELY OBSOLETE
Global companies from Lockheed Martin to Sweden’s Saab AB are offering military hardware from submarines to helicopters to Prime Minister Narendra Modi’s government as part of his $250 billion (Dh918 billion) defence modernisation programme. But bureaucratic delays and a funding crunch has made future deals next to impossible.
Airbus SE won a $1.7 billion contract to supply transport planes to the Indian Air Force in 2015 — it’s first military agreement in the South Asian nation since 1962. Five years later, that deal is yet to be signed.
India’s inability to speed up the modernisation of its weaponry to guard the border with arch rivals Pakistan and China shows the Modi-led administration’s challenge to transform an industry plagued by red tape. While New Delhi is the world’s fourth-biggest military spender, its air force, navy and the army are still equipped with weapons that are largely obsolete.
“The defence procurement procedure needs major, thorough reforms, not just an update,” said Jon Grevatt, the Asia-Pacific defence industry analyst with Jane’s, adding the complex approval processes and lack of finances are the main drag on military modernisation. “Unless the Modi government really introduces major reforms into its procurement process then we will continue see delays.”
No orders
An air of despondency hung over the gathering of top arms manufacturers last week in Lucknow, a nineteenth century battleground city in northern India.
Executives heard Modi and Defence Minister Rajnath Singh extolling the need to modernise, collaborate and export out of India, while remaining silent on future orders.
A historic mandate about six years ago handed Modi a unique opportunity to aggressively buy arms, without fearing the political opposition that often derails such purchases. But implementation has been poor. The prime minister has missed that window of opportunity, at least seven executives said, asking not to be identified as they still do business with the government.
A Defence Ministry spokesman wasn’t immediately available to comment.
About 60 per cent of defence spending goes to paying
salaries for India’s 1.3 million soldiers — one of the world’s largest standing armies. What’s left is spent on past purchases, leaving the forces with obsolete equipment and not enough ammunition.
Obligations
India’s spending in the year starting April 1 will be $47.34 billion, of which $16.2 billion is for capital expenditure and of that, about 90 per cent is devoted to existing obligations and committed liabilities. That leaves little to meet demands for weapons purchases and modernisation.