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India’s aspiration is to become a ‘leading power’, rather than a ‘balancing power’. We have quoted the Indian Government’s determination before in this column. Re-entering the stage of international politics with this strategic intention takes enhanced capabilities of power-projection. They were lacking in the past; Prime Modi understands that India needs also military means for the higher profile he is seeking for India in world affairs. Sustainable military power depends on a corresponding economic substance. The fall of the international oil price has turned energy imports into a less costly expenditure. This trend has come just in time for an auspicious start of the Modi government committed to fundamental economic reforms. They remain difficult with one House of Parliament being able to obstruct the government’s reform program. Reduced costs of imported energy have at least brought down inflation and have accompanied a higher economic growth at a moment when other emerging economies have experienced lower growth. Military spending has gone up from 2014 to 2015 by roughly 3 percent, using average market exchange rates from 45.2 billion to 48 billion US Dollars. These figures have taken India from the eighth position in 2014 to the sixth in the global ranking. India still has the third-largest armed forces in the world by personnel strength. This allows it to be one of the top troop contributors to UN peace keeping operations. On a global comparison, India is well placed in more traditional conventional warfare equipment, such as main battle tanks (second), artillery (second), armoured infantry fighting vehicles (fourth), guided missile submarines (fourth), cruisers, destroyers and frigates (fourth) and tactical aircraft (fourth). In the field of strategic weapons such as ballistic missiles and bomber aircraft, however, India ranks far behind the “top three” US, Russia and China. The armed forces’ structures are determined by their orientation against Pakistan and China, which is India’s historic legacy and still represents the relevant threat, but they are insufficient for any new orientation towards a regional role beyond the immediate neighbourhood, let alone a global role. The current government has recognised the need to modernise its military capabilities and has launched major development and procurement programs with a view of replacing ageing equipment. The most important needs in renewing and developing military equipment have been identified in the air force. Plans for massive purchases abroad have however been stalled because of insufficient budgetary means and a fresh determination of Prime Minister Modi to include procurement industries in his nation-wide and economy-wide effort to relaunch India’s industrial base by expanding and modernising it. He has created the slogan ‘Make in India’, advertises and promotes the idea world-wide, which, as a policy, should also include the indigenous defence industry. India would, thus, not only be a buyer on the international defence procurement market, but become a defence procurement producer itself and, as an ultimate goal, a defence procurement exporter. Foreign suppliers would be asked not just to sell, but more and more to participate in joint ventures aiming at developing Indian industry. Foreign partners will more and more be invited to invest capital in such ventures. Privileges of public sector defence industries have been removed in order to provide a level playing field with the domestic private sector with the purpose of allowing the private domestic defence industry to develop and at the same time to attract foreign direct investment – FDI in this field. The size of legislative and governance home-work left to the Indian government to be carried out remains, however, immense. The Modi government will have to be judged by its deeds beyond its policy slogan ‘Make in India’. The next ‘proof of the cake’ will come in March, when the Government will submit its next legislative program and the budget for the Financial Year 2016/2017 to be debated in Parliament in March and April. Then will be another occasion to check how strong bad habits of the Indian political system are and how realistic the hopes are that Narendra Modi will be the person to reform the Indian State and society.

28^th February 2016 / Philippe Welti

(Sources: The International Institute for Strategic Affairs, IISS; 2015 Strategic Survey. The Annual Review of World Affairs. London, September 2015. The International Institute for Strategic Affairs, IISS; The Military Balance 2016. London, February 2016)

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