India Steps Up Military Modernisation

By admin • June 22nd, 2010

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India Defence Online, New Delhi — Among the many detailed reports presented by various reputed confederations and survey agencies on Indian Defence and its role in the global market, the latest report by Deloitte India and the Confederation of Indian Industry (CII) gives a revealing insight on the rising defence procurements by India and the opportunities it offers.

The Deloitte-CII report titled “Prospects for Global Defence Export Industry in Indian Defence Market” reveals that Indian defence expenditure in the next couple of decades will overtake that of major western nations like the US.

The report states 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.

Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry said that India is clearly seeking a high level of self sufficiency in delivering its ambitious defence equipment and expansion program. However, it is also evident that there will be a high level of reliance on overseas interests to supply the necessary technology in various fields. Foreign Original Equipment Manufacturers are now looking at India as a critical market as well as a potential manufacturing partner.

The Deloitte- CII report indicated that the growing trend in the defence expenditure and its sheer volume is expected to create new opportunities for foreign firms, as total spending will grow in absolute terms. India is also host to a mature manufacturing sector, which means it will often be able to offer more cost-competitive terms for large platform builds.

The reports stated that in terms of the current five year defence expenditure plan (2007-12), India will be spending $100 billion on weaponry which will be hiked to $120 billion in the following five year plan. The report has also warned that the Indian Defence Ministry’s ambitious plan of achieving 70 per cent indigenisation in defence will only become a possibility by 2015 if the capacity of the local industries is doubled. Currently, Indian companies supply only 30 per cent of the requirements and the bulk of that are components and sub-assemblies to public sector firms. In real value terms, 70 per cent of the acquisitions are from international sources.

The Deloitte-CII report has highlighted the retarded pace of Indian Army’s Artillery Modernisation programme which seeks the procurement of roughly 3,500 guns of various kinds like towed and wheeled 155mm guns, self-propelled tracked and wheeled guns as well as mountain guns.

The procurement will happen over the next two decades at cost of roughly $ 6.4 billion. As for the Indian Air Force (IAF), it is also struggling towards indigenous production in aerospace. However, it is also diversifying its vendor base for combat and transport aircraft. As for the Indian navy, its acquisitions are more oriented towards indigenisation. The Indian Navy is providing international players opportunities for modernising Indian shipyards to enable them to produce bigger and more advanced battleships. 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. The report indicated that India’s Coast Guard is 70 per cent short of its requirements plans and will be tripling its assets over the next decade.

source: india defence online

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