Military Capabilities

India’s military capabilities have largely been shaped by its regional interests and concerns within South Asia. Since independence in 1947 Pakistan has been regarded as the main threat to India’s security, with China ranking second. However, internal security threats from different insurgent groups have also been important.

Military Capabilities

In 2006 defence expenditure was increased by a further 8.5 per cent to US$ 23.5bn. For the 2007-08 fiscal year, a further rise of 7.8 per cent was announced at the end of February 2007. By comparison, Pakistan’s defence expenditure is about one fifth of India’s, although it represents a higher percentage of its GDP. China on the other hand spends nearly five times more than India, although that expenditure is significantly less if measured as a percentage of GDP.

The current Indian Government has projected that defence spending (excluding military pensions) can rise to 3 per cent of GDP provided that overall economic growth remains at 8 per cent a year or more. Defence spending was last above 3 per cent of GDP at various points during the 1990s.

Conventional Forces

India has the largest conventional forces in the South Asian region. It has 1.3 million active serving personnel, including 1.1 million army personnel, 55,000 naval personnel and 161,000 air force personnel. A further 1.3 million are deployed as part of a range of paramilitary forces. The reserve strength of the armed forces is an additional 1.2 million, while the reserve strength of the paramilitary forces is almost 1 million. India does not have a system of conscription, which is unusual for a force of this size. The professional nature of the Indian armed forces has a positive impact on the operational effectiveness of those forces. The armed forces are closely modelled on the British military system, a result of the close historical ties between the two countries. Nearly 75 per cent of India’s conventional military capabilities are imported. According to the Stockholm International Peace Research Institute (SIPRI), between 2001 and 2005 India was the second largest importer of conventional weapons in the world,355 which accounted for approximately US$9.4 billion, or 10 per cent of the global total of international arms transfers during that period.

Traditionally the Soviet Union – more recently, Russia – has been India’s main supplier of conventional weapons systems.357 Between 2001 and 2005 for example, India accounted for 25 per cent of Russia’s overall arms exports. However, in recent years India has increasingly turned to Western suppliers for its conventional weapons. This shift has been a consequence of moves to open up procurement to international competition, with the overall aim of attracting military offsets and establishing licensed production in the country. Since 2002 Israel has become the second largest supplier of military equipment to India. The US, France and the UK have also increasingly featured on India’s supplier list.

Over the next decade those platforms and technologies purchased from the Soviet Union during the Cold War will become increasingly obsolete. Some analysts have estimated that modernising India’s outdated weaponry alone could cost in the region of US$30 billion. India’s dependence upon foreign suppliers for its conventional weapons is therefore likely to continue, given the limited capabilities of its domestic industrial base. Indeed, due to the combination of its military requirements and its economic resurgence, India is regarded by defence manufacturers globally as a key market for the future. However, Russia’s predominance in the Indian defence market appears to have been safeguarded by the conclusion of an intellectual property rights agreement between Russia and India in December 2005. That agreement not only allows for future militarytechnical co-operation between the two countries, but also provides for joint development and production of ‘next generation’ weapons systems. A series of bilateral military exercises between India and Russia over the last few years has been an opportunity for Russia to engage in ’operational marketing’ of its weapons systems. Further bilateral exercises are scheduled for September 2007.