Defence World Awaits Outcome of India Elections

Everybody in the defence industry is eagerly awaiting the outcome of the ongoing national elections in India, which will be declared on June 4. Though no one in the defence sector is talking in public about what is good for the industry, the general mood is that they are better off with the current right-wing Bharatiya Janata Party, led by Prime Minister Narendra Modi, in the majority.

“There are several acquisition programs on the anvil, any change in the current dispensation could put pay to many of these proposals, which are on initial discussion stages,” said a diplomat of a major arms exporting country, based in New Delhi.

Weeks before the announcement of the general elections, India announced its plans to acquire advanced defence platforms and equipment across various branches of the military as part of its efforts to strengthen overall combat capabilities.

The capital acquisition proposal worth INR846 billion (US$10 billion) was approved by the country’s Defence Minister Rajnath Singh. The proposal includes the purchase of about 15 maritime surveillance aircraft, six mid-air refuellers, new-generation anti-tank mines, air defence tactical control radar, heavyweight torpedoes and futuristic infantry combat vehicles.

According to Defence Ministry sources, of the 15 maritime patrol aircraft, nine will be for the Navy and five for the Coast Guard. The aircraft could be based on the C-295 transport aircraft that are being manufactured in India in a joint venture between Tata Advanced Systems and Airbus. Recently, Airbus Defence and Space officially handed over in fly-away condition the first of 56 C295 aircraft to the Indian Air Force (IAF) to begin replacing its ageing Avros-748 fleet.

If this materialises, the Tata Airbus order book will become 71 from the existing 56.

“A new government will have its own ideas and requirement. We will have to do it all over again, may be start from the scratch. That continuity will be gone,” averred a senior executive of an international defence equipment manufacturer.

MID-AIR REFUELLERS

It is interesting to note that India has revived the process of procuring mid-air refuellers after failing to make any headway in the earlier attempts in the last few years.

Earlier IAF had said that they were even considering the purchase of pre-owned aircraft, which can be modified into tankers to meet its requirement of refuellers.

Currently, the IAF operates a fleet of six Russian IIyushin-78 tankers procured in 2003-04.

“The decision to buy six additional tankers has come at the right time as the demand for these platforms has gone up in the last few years with the induction of a range of fighter aircraft with the capability of receiving fuel on air,” a senior IAF official said.

The Airbus A330 multi-role tanker transport and the Ilyushin Il-78 have been vying to secure a contract for these tankers.

In 2022, the country’s state-owned Hindustan Aeronautics Limited (HAL) signed an agreement with Israel Aerospace Industries (IAI) to convert the Boeing-767 passenger aircraft into Multi-Mission Tanker Transport (MMTT) in India. The local MMTT conversions will utilise India’s local defence ecosystem and support India’s ‘Make in India’ campaign.

During Prime Minister Modi’s 10-year tenure, the government has aimed to build a resilient defence manufacturing industry catering to India’s domestic needs and simultaneously tapping into the global defence export market. The government’s focus has been on the ease of doing business, encouraging investments in the defence sector, domestic defence procurements, indigenisation of defence manufacturing and production, and harnessing design and development.

Last year, the government hiked the defence budget for 2023/24 by 12.95 per cent – from ₹5250 billion to ₹5940 billion. This year, the interim budget estimates for the Ministry of Defence (MoD) for 2024-25 are ₹6215.41 billion (approx. US$75 billion). A full budget will be presented after the new government assumes power.

According to a MoD official, this was done to allow the military to develop and/or buy advanced weapons systems, including new fighter jets, submarines and tanks.

The armed forces’ modernisation budget also saw a hike of ₹1520 billion to ₹1620 billion. A significant portion of this is for the acquisition of weapon systems and equipment from domestic manufacturers in line with the government’s ‘Make in India’ programme.

With military expenditure worth $83.6 billion in 2023, India was the fourth largest spender globally in 2023, the latest report by Stockholm International Peace Research Institute (SIPRI) stated. This was a result of growing personnel and operations costs that comprised about 80 per cent of the total military budget, the report added.

According to the report, Indian spending was up by 4.2 per cent from 2022 and by 44 per cent from 2014, when the Modi administration came to power.

The growth in spending aligns with the government’s priority to strengthen the operational readiness of the armed forces amid ongoing tensions with China and Pakistan.

OTHER PURCHASE PLANS

The proposals, cleared by the Defence Acquisition Council (DAC), also include new-generation anti-tank mines, air defence tactical control radar, and heavyweight torpedoes.

Additionally, the government plans to buy advanced sonar for naval ships to detect submarines from a long distance.

“In order to enhance the operational efficiency and domination in the tactical battle area for engaging targets that are beyond visual line of sight by the mechanised forces, the AoN (Acceptance of Necessity) under Buy (Indian-IDDM) category has been accorded for procurement of canister launched anti-armour loiter munition system,” the ministry official informed.

“Further, to strengthen the air defence systems, especially the capabilities to detect slow, small and low-flying targets as well as surveillance, detection and tracking of different targets, the AoN has been accorded for procurement of Air Defence Tactical Control Radar under Buy (Indian-IDDM) category,” he said.

Also “to keep the Indian naval ships one step ahead of the threats posed by the adversaries”, active towed array sonar, which are capable of operating at low frequencies and various depths for long-range detection of submarines are also being procured.

This acquisition will provide a further boost to the vision of self-reliance in Defence, the MoD official said.

“The proposed contracts will also open up a large avenue in defence manufacturing for over 125 Indian vendors and Defence PSUs for over a period of five years,” he added.

The ministry had recently signed a contract with Advanced Weapon Equipment India Limited (AWEIL), Kanpur for the manufacturing and supply of a total of 463 indigenously manufactured 12.7 mm stabilised remote control guns (SRCG) for the Indian Navy and the Indian Coast Guard at a total cost of INR1,752.13 crore, with indigenous content (IC) of more than 85%.

These guns will help enhance the capability of the Navy and the Coast Guard to accurately engage small targets that pose a threat to ships in an asymmetric environment, both by day and night, the defence ministry official said.