India likely to hike defence budget

Agence France Presse

New Delhi, February 27:

India is expected to sharply hike its defence spending in tomorrow’s budget, despite peace talks with rival Pakistan, as it goes on a shopping spree for new military hardware to update its ageing arsenal, analysts say.

India — one of the world’s biggest arms buyers with one million-plus troops — is looking to buy 126 new jet fighters to replace an accident-prone fleet of Russian-built MiGs, six new submarines from France, an anti-missile system from the United States and rocket launchers from Russia.

“India has not seen modernisation over a 10-year period,” said Kapil Kak, a former air marshall and director of the Centre for Strategic Studies, “The defence ministry has to balance this and so we think annual spending of 2.75 to three per cent of (India’s estimated $650 billion gross domestic product) over the next 20 years can make up for this serious mistake.” The defence budget rose by almost by 18 per cent to $17.6 billion in this fiscal year to March 2005 as India went on spending binge. This made up about 17 per cent of the overall budget.

The country bought the Phalcon radar system from Israel for $1.1 billion, a used aircraft carrier from Russia for $1.5 billion and 66 Hawk jet trainer planes from Britain for $1.45 billion.

“Contractual obligations will need a 25 to 30 per cent additional allocation in the budget but even with this hike, our military spending will be lower, compared to China’s 5.5 per cent (of GDP) or the US six per cent,” Kak said.

He noted previous government ordered billions of dollars in new equipment before losing power. India’s defence forces have asked for a 40 per cent budget increase.