Arms spending: India grows as west shrinks

Discussion in 'Foreign Relations' started by RAM, Jun 17, 2010.

  1. RAM

    RAM The southern Man Senior Member

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    India’s military modernisation presents opportunities for defence majors.
    With global arms majors focused on the commercial opportunities presented by India’s military modernisation programme, consulting firm Deloitte India and the Confederation of Indian Industry (CII) have produced a detailed report on the country’s defence market and the possibilities it presents. Entitled, “Prospects for Global Defence Export Industry in Indian Defence Market”, the report was released today at the Eurosatory 2010 defence exhibition in Paris.

    The report follows a KPMG-CII report in January on “Opportunities in the Indian Defence Sector”, a PricewaterhouseCoopers report in April on “Aerospace and Defence Insights” and a CII report last month on foreign direct investment (FDI) in the defence sector.


    The Deloitte-CII report points out that as defence expenditure drops in the traditionally big-spending western economies, including the USA, Indian defence spending will grow steadily over the next 20-25 years, as New Delhi implements a major defence modernisation.

    KEY IAF PROJECTS
    180 Sukhoi-30MKI fighters, worth $9.9 billion.*

    126 medium fighters (to replace the MiG-21) for $9.09 billion.*

    120 indigenous Tejas light combat aircraft (LCA), for which an additional $1.71 billion has been allotted.

    Advanced and intermediate jet trainer aircraft.

    The Indo-Russian Fifth Generation Fighter, with an estimated development cost of $9.9 billion.*

    Upgrades to more than 60 MiG, Jaguar and Mirage aircraft.


    Linking defence spending to the International Monetary Fund (IMF) prediction that India’s economy will grow in real terms by 7.5 per cent from 2010 to 2014, the Deloitte-CII report says that India’s current defence expenditure of $32.03 billion will rise to an estimated $42 billion by 2015. The capital expenditure on new weapons platforms will rise from the current $13.04 billion to $19.2 billion in 2015.
    Inflation, warns the report, somewhat tempers these figures: the real growth in defence expenditure is expected to be marginal over the next two years and about 5.3 per cent from 2012 to 2015.

    Nevertheless, the figures remain impressive. During the current Five Year Plan (2007-12), India will spend $100 billion on weaponry, which will rise to $120 billion during the next Five Year Plan (2012-17).

    Deloitte-CII point out that 70 per cent of this procurement, in value terms, is from foreign sources; Indian companies supply only 30 per cent, the bulk of that as components and sub-assemblies to state-owned companies. The report is sceptical about the Indian MoD’s (Ministry of Defence’s) oft-repeated target of 70 per cent indigenous production. If that target is to be achieved by 2015, local industry would need to more than double in size, an unlikely event.
    India’s domestic defence sector benefits from increasing MoD requirements to “buy local” as well as taxation arrangements that advantage local firms; in the case of defence public sector undertakings (DPSUs), tax advantages can be as high as 50 per cent. Deloitte-CII, however, see clear opportunities for foreign firms in providing specialist inputs to Indian defence manufacturers, which they require for developing advanced platforms and systems.
    Land systems
    The report notes that India’s acquisition of land systems suffered a serious slowdown in 2009. Many of the postponed acquisitions relate to the Army’s $8-billion artillery modernisation programme (called the Field Artillery Rationalisation Plan, or FARP). This aims to induct between 2,700-3,600 guns over the next two decades at a cost of $4.77-6.48 billion.
    Procurement has long been initiated for four kinds of guns: air-mobile ultralight howitzers for mountain divisions on the China border, towed and wheeled 155mm guns for plains infantry and mountain divisions, self-propelled tracked and wheeled guns for mechanised strike formations, and mounted gun systems. These projects, however, have moved very slowly.
    Besides upgraded artillery, the report also highlights the proposed acquisition and upgrades of tanks, UAVs (Unmanned Aerial Vehicles) and 300 helicopters for Army Aviation. India’s obsolescent air defence systems also provide major opportunities to foreign vendors.
    Navy and Coast Guard
    Deloitte-CII note that naval acquisitions are earmarked for a greater degree of indigenisation than the other services. Foreign shipbuilders are pointed to opportunities for modernising Indian shipyards to enable them to produce large, advanced battleships. By 2022, the Indian Navy plans to have a 160-plus ship Navy, including three aircraft carriers, 60 major combatants (including submarines) and about 400 aircraft of different types.
    The report highlights the Indian Navy’s “Indigenisation Plan (2008)”, which forecasts a requirement for marine engineering equipment, including gas turbines, diesel generators, pressure cylinders, hydraulic manipulators and motors.
    Furthermore, India’s Coast Guard, which is 70 per cent short of its requirements, plans to double its assets in the next few years and triple them over a decade. Its current fleet of 76 ships and 45 aircraft is likely to be ramped up in five years to 217 ships and 74 aircraft. Some 70 of these new ships would be large vessels.
    Aerospace
    The report notes that India is struggling to indigenise aerospace production. Historically d0ependent upon Russia, the Indian Air Force (IAF) is looking to diversify its vendor base for combat and transport aircraft, providing major opportunities for aerospace firms .

    http://www.business-standard.com/india/news/arms-spending-india-grows-as-west-shrinks/398519/
     
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  3. Yusuf

    Yusuf GUARDIAN Administrator

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    Tony,
    open a thread to discuss relevant topics. this thread is discussing something else. by the way, if we dont spend on weapons, governments like the chinese are waiting to pounce on us. there will be no poor Indians left that require toilets.
    defence spending and spending on other things dont go hand in hand. you gotta do what you gotta do.

    Warning, any more flames and it will be bye bye time.
     
    BunBunCake likes this.
  4. nandu

    nandu Senior Member Senior Member

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    India part of global defence supply chain, says report

    With the Defence Ministry poised to spend $80 billion on defence acquisitions over the next five years, India is already a major market for global defence companies. Now, a new defence industry report says India is not only one of the most attractive destinations for global defence companies but is fast becoming part of the global supply chain of some of the biggest defence suppliers in the world.

    The CII-Deloitte report on ‘Prospects for Global Defence Industry in Indian Defence Market’, released in Paris on Thursday, lists out more than 40 joint ventures and partnerships that have been struck between international firms and major Indian defence players like Tata, Mahindra & Mahindra and L&T. The report says increasingly, global companies are realising India’s potential as a manufacturing hub in the aerospace and defence sector and are interested in creating partnerships.

    “India is being considered as the next destination of manufacturing given country’s strength like wider supplier base, low-cost manufacturing, persistent focus on infrastructure development, huge pool of skilled workforce and increased penchant for enhancing competitiveness by the respective firms. Hitherto Indian firms lacked the global competitiveness in engineering, quality and technology aspects in aeronautic and defence products. However lately there is an increasing thrust on these aspects,” the report says.

    Some of the biggest global defence players have already set shop in India to manufacture products for their international supply chain.

    http://www.indianexpress.com/news/India-part-of-global-defence-supply-chain--says-report/635410
     
  5. nandu

    nandu Senior Member Senior Member

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    US & India’s defence spending madness

    EGGED on by its ally the US, India continues to revel in its new found “significance” as a regional power and is allocating trillions of dollars to build its military muscles. India’s military procurement budget is estimated to double to 30 billion dollars by 2012. A “mother of all defence deals” comprising 11 billion dollars was approved by India’s Defence Acquisitions Council, chaired by federal Defence Minister AK Antony, to buy six new-generation submarines in what is considered the costliest military contract in the South Asian nation’s history. The deal surpasses India’s biggest defence deal to date - 9 billion dollars allocated for the purchase of 126 multi-role fighters for the Indian Air Force. The Indian Navy will also get the Akula-II class attack submarine K-152 Nerpa on a 10-year lease from Russia in October this year, and then the first indigenous nuclear submarine INS Arihant by 2012. The Daily Mail reports that apart from stealth, land-attack capability and the ability to incorporate futuristic technologies, all six submarines will be equipped with air-independent propulsion (AIP) systems to boost their operational capabilities. Four submarines will be constructed in India’s western Mumbai and southern Vishakapatnam cities with the help of a foreign contractor. The other two submarines will be either be imported from the foreign vendor directly or constructed at a private shipyard in India.

    The Daily Mail finds that the Indian decision was taken as a continuation of the process of ramping up its defence hardware and equipment to try to keep pace with the military build-ups in neighbouring China and Pakistan. Additionally, Indian Cabinet Committee on Security has reportedly cleared Indian Rs 285 crore Defence Ministry project for developing systems and equipment for protection against nuclear, biological and chemical (NBC) weapons and leakages. Unfortunately, the US is supporting India in its frenzy of arming itself. Apparently, the US is looking the other way, while India continues to commit atrocities against humanity. The Indian killing spree in Kashmir too has been downplayed by the US. This is callous and indifferent behaviour towards human suffering just as the US has turned a blind eye to the sufferings of the Palestinians at the hands of the Israelis. In response to a question on the killing of 17 Kashmiris by police in the course of protests in Indian Occupied Kashmir against Occupation and for the right of self-determination, US State Department Spokesperson, Mark Toner stated that this was an “internal Indian matter”. If such a display of heartlessness were not enough, to rub salt in the wound of the Kashmiris, Mark Toner went on to actually commend the Indian government for its “efforts ... to resolve the current situation” in Occupied Kashmir! With thousands of Kashmiris coming on the streets to protest Indian occupation and assert their demand for self-determination as promised under the UNSC resolutions, and with the Indian government sending its soldiers on to the streets of the occupied territory, as well as clamping a curfew, the situation requires immediate international attention and UN intervention. However the US is also displaying complete disregard to International law and UN Security Council Resolutions.The Daily Mail observes with distress that creating another bully of the block is going to be detrimental to peace efforts in the region. Propping up monsters has been a favourite pastime for the US despite the fact they became anathema to the world and had to be destroyed or eliminated albeit through the support of the US. Noriega, Pinochet, Baby Doc, Batista, Marcos, Saddam all are clear examples of such folly. Unfortunately, the US does not appear to learn from such mistakes and is bent upon repeating them for its short term gains. Currently it appears that in its bid to prepare a counter force against China, the US is willing to support and enhance India’s military prowess but this will definitely cause the US to rethink its flawed strategy, when the Indian Frankenstein will become unmanageable by the US and tend to challenge its own mentor. Perhaps it may be too late by then!

    http://dailymailnews.com/0710/13/Editorial_Column/DMEditorial.php
     

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