India's defence spending, BJP's policies and U.S.-India defence collaboration and its impact on regional peace

 by Brian Cloughley

South Asia defence analyst and author of ‘A History of the Pakistan Army’

In May 2016, India’s defence minister, Manohar Parrikar, established a committee with the remit to “Recommend Measures to Enhance Combat Capability and Re-balance Defence Expenditure of the Armed Forces”. Its Chairman, Lt Gen (Retd) DB Shekatkar, presented his report last December, and although there has been no public notification of its full content, it is apparent that the committee proposed some measures that if adopted, would save money and modestly improve combat capabilities.

One major recommendation that is unlikely to be adopted, however, is to increase the defence budget to at least 2.5 per cent of GDP from its current 1.6%. It is doubtful that any government in Delhi would be prepared to implement such a significant rise unless the country was actually at war, or about to be so committed.  As has been evident from societal reaction in some NATO countries to President Trump’s insistence that they increase their defence budgets to two per cent of GDP, any diversion of scarce funds from such spheres as education and health can be not only economically sensitive but politically unpopular and socially divisive. 


In its February 2017 national budget, the Indian government notified core defence expenditure of INR 2.74 trillion (USD 40.6 billion) for FY2017/18, which is an increase of 5.6 per cent over the revised budget for 2016/17, and the lowest rate of increase for a decade. While the Stockholm International Peace Research Institute places India sixth highest of international military spenders (Pakistan being 28th), and its armed forces are the world’s third largest, at 1.3 million as against China’s 2.3 million and the United States’ 1.4 million, there are major deficiencies in India’s defence preparedness and capabilities.

A significant factor militating against clarity in defence outlay is that the authorised expenditure of Rs 2.74 trillion quoted by the finance minister is at variance with the Ministry of Defence figure of Rs 2.62 trillion because the MoD considers the approximately 12 billion difference to be part of the Civil Estimates, as is the substantial Rs 85 billion (USD 1.3 bn) defence pensions bill. The confusion is compounded by the fact that the ongoing annual underspend of moneys allocated for capital expenditure involves forfeit of unspent funds. The amount surrendered in FY 2016-16 was a massive Rs 6.9 billion, representing about 8 per cent of the allocation.

As noted by the Indian Parliament’s Standing Committee on Defence in April 2015, “such underspending leads to a situation where the preparation of Defence Forces [is] nowhere near the target,” and although the committee advocated a system of non-lapsable funding, no action was taken, largely due to obstruction on the part of the ministries of defence and finance.

Bureaucracy is crippling India’s defence planning, and it is apparent that the procurement system is being adversely affected by a combination of lack of funding, reluctance on the part of politicians and bureaucrats to accept strategy-based assessments of long-term requirements in force structure and equipment, and public complacency concerning national invincibility.

In one example of inconsistent defence planning, India’s 2015 negotiations with France for the purchase of 126 Rafale aircraft were abandoned and a decision was made to reduce the number to 36 in an entirely separate arrangement. This was not the result of a revised assessment of what the Indian Air Force (IAF) would require in the light of a perceived threat; rather it was a political choice that was forced upon the IAF without taking into account any strategic considerations.  The history of India’s Rafale acquisition programme highlights some of the difficulties faced by defence planners.

In 2007, India published a request for proposal for 126 medium multirole combat aircraft (MMRCA) for which the original contenders were Boeing’s F/A-18, Dassault Aviation’s Rafale, the Eurofighter Typhoon, Lockheed Martin’s F-16, UAC’s MiG-35, and Saab’s Gripen. In 2011, it was announced that the Typhoon and the Rafale had been shortlisted, and following further evaluation the Rafale was selected in 2012.

Negotiations began, and contract finalisation was expected in 2013, but the target was missed in a period in which there was considerable inflation and a substantial fall in the value of the rupee. This led to an increase in the overall cost. After the 2014 elections, the newly appointed Defence Minister, Manohar Parrikar, and his visiting French counterpart agreed to speed up the negotiation process, but in January 2015, Parrikar said there had been ‘complications’ that he would attempt to resolve during a forthcoming visit to France.

He also stated, somewhat ominously for Dassault, that upgrading the IAF’s Sukhoi Su-30MKI aircraft would make them a viable alternative to the Rafale. It is not known if the IAF provided any basis for his announcement.

During a visit to France in April 2015 by Prime Minister Modi, he and French President Hollande announced that India would acquire 36 Rafales directly from France. The 126 aircraft deal was dropped, apparently without reference to the Chief of Air Staff whose reaction was not known when Parrikar stated that “by buying 36 Rafales instead of 126, I have saved the cost of 90 Rafales... We will use this money to buy Tejas LCA.”

Unfortunately for the IAF, the Tejas Light Combat Aircraft project has been unsuccessful. Development began in 1983 and although there has been much positive publicity about the project, India’s Comptroller and Auditor General have been most critical of the programme. In 2015, he noted that because of delays the IAF had been required to take many temporary measures including upgrading existing aircraft rather than retiring them and stated that “LCA Mark-I, which achieved Initial Operational Clearance [in December 2013] has significant shortfalls (53 permanent waivers/concessions) in meeting ASR (Air Staff Requirements) as a result of which it will have reduced operational capabilities and reduced survivability, thereby limiting its operational employability when inducted into IAF squadrons... LCA Mark-I does not meet the ASR. The deficiencies are now expected to be met in LCA Mark-II by December 2018.”

There are other examples of unsatisfactory defence procurement, notably in artillery, and Indian Defence News noted in February 2017 that “even though the army in 1999 initiated a USD 8 Billion Artillery Modernization Program or Field Artillery Rationalization Plan (FARP) aimed at acquiring between 2700-3600 guns over the next 15 to 20 years (2020-25), things have virtually remained stalled with there being no new inductions.”

Given the comparative modesty of the budget allocation to defence and the parlous state of so many major procurement programmes, it is not surprising that the BJP government of Prime Minister Narendra Modi attempts to deflect attention from what appears to be ineffective direction of the nation’s defence planning by concentrating on increasing tension with Pakistan.

When Mr Modi stopped briefly in Pakistan en route from Kabul to Delhi in December 2014, his action was greeted with much approval internationally. His cordial meeting with Prime Minister Nawaz Sharif was hailed as a major step forward in contributing to regional stability and the statement that “it was agreed to continue and enhance bilateral contacts and work together to establish good neighbourly relations” met with international praise. It seemed, even to many cynical observers of sub-continent affairs, that an era of trust might begin; but alas we were wrong.

Modi tweeted that he “spent a warm evening with Sharif family at their family home” and was “personally touched” by the fact that Nawaz Sharif met him at the airport. This was especially notable because of Modi’s ultra-nationalistic approach to policy, both domestic and foreign, but the sweetness did not last, and Modi reverted to his former attitude of distrust and aggression. He justified this by accusing Pakistan of committing terrorist acts in India, and refuses to acknowledge that Pakistan has suffered more from the atrocities of extremist fanatics than has India.

India-Pakistan relations were complicated by the attitude of the last US President, Barack Obama, who met with Mr Modi seven times and was guest of honour on Republic Day 2015.

In 2008, Mr Obama had a comparatively open mind about the sub-continent and was made aware of the Kashmir dispute about which he said that the US “should probably try to facilitate a better understanding between Pakistan and India and try to resolve the Kashmir crisis.”  That positive approach disappeared very rapidly after India reacted negatively, and during his entire eight years in power, Obama did not lift a finger or say a word to help resolve what remains an internationally recognised territorial dispute. 

The greatest prime minister of India, Jawaharlal Nehru, told the Indian Parliament on 12 February 1951 that concerning Kashmir,  “We have taken the issue to the United Nations and given our word of honour for a peaceful solution. As a great nation, we cannot go back on it. We have left the question for final solution to the people of Kashmir and we are determined to abide by their decision.” As the BBC put it concisely: “When Lord Mountbatten, India’s first Governor-General, accepted Kashmir’s accession, he said it should eventually be ‘settled by a reference to the people’. India’s Prime Minister, Jawaharlal Nehru, also pledged a plebiscite or referendum for Kashmir under international auspices. This was later enshrined in UN Security Council resolutions.”


But UNSC resolutions are as resolutely ignored by Delhi as are the aspirations of the Kashmiri people. Few things are uncontestably predictable in this world, but it is obvious to all but the most ingenuous optimists that India will never allow a plebiscite and will be supported by the United States in its stance. Although it is unlikely that President Trump knows anything about Kashmir, there is little doubt that he will follow the example of his predecessor in declining to assist in defusing tension between India and Pakistan.

In spite of the fact that President Trump had a cordial exchange with Prime Minister Nawaz Sharif in January 2017, calling him “a great guy” and referring to Pakistan as a “fantastic country”, it is unlikely that US support for India, politically and economically, will be sacrificed in the interests of India-Pakistan rapprochement. Trump’s conversation with Mr Modi signalled bilateral intention to forge closer ties, and the February 2017 visit to India by two US delegations totalling 27 Senators and Congressmen indicated that commercial considerations are uppermost in American policy, not least in the military sales sector.

In its report of 21 February 2017, the Stockholm International Peace Research Institute recorded that “[arms manufacturing] companies based in the United States continue to dominate the Top 100 with total arms sales amounting to $209.7 billion for 2015.” 

The report also report noted that “India was the largest importer of major arms in 2012-16, accounting for 13 per cent of the global total,” while noting that from the period 2007-2011 to 2012-2016 India’s these imports increased by 43 per cent and were far greater than those of China and Pakistan. 

Of increasing significance is the growth in supply of advanced military material to India by the US, which has included C-130 Hercules, Globemaster strategic transports and P-8 Maritime Surveillance aircraft. Also, as noted by The Diplomat, the countries have “signed contracts for procurement of 22 AH-64E Apache attack helicopters and 15 CH-47F Chinook heavy-lift helicopters. India will in all likelihood equip its new AH-64E fleet with the Stinger missile. In addition to the Stingers, India has also placed an order for 812 AGM-114L-3 Hellfire Longbow missiles, and 542 AGM-114R-3 Hellfire-II missiles as part of the overall $3.1 billion India-U.S. defence deal.” There is a great deal of money to be made by providing weapons to India, and no US President will countenance policies that might affect the arms trade. As India’s army chief, General Bipin Rawat, stated in January 2017, “the [US-India] economic partnership will grow stronger and everything else will fall into place.”

While the Indian armed forces continue to be disadvantaged by an erratic and unsatisfactory procurement process that is inexorably affected by parochial political considerations, the flow of weapons from overseas and the level of confrontation with Pakistan will continue to grow.

It remains to be seen what Lieutenant General DB Shekatkar’s detailed recommendations might be, but it is not surprising that he encapsulates his approach to regional defence matters with the observation that “Pakistan has adopted Jihadi philosophy of war. China is combining philosophy of people's war with conventional war. Therefore, India needs to change its outlook towards war.” India’s defence budget may have had only a moderate increase, and it is not yet known what any change in outlook could produce in terms of doctrine or strategy, but given the attitude of the Indian government there is little reason to be optimistic that tensions will ease and that there will be moves to rapprochement.