Rising Indian Defence Budget

Published in Hilal English

Written By: Dr. Mujeeb Afzal

On February 01, 2017, the Indian Finance Minister, Arun Jaitley, presented the annual budget for the year 2016-17 in the Lok Sabha. It includes allocation of 51 billion dollars for the salaries and pensions of the defence personnel and expenditure for the modernization programmes of the Armed Forces. These allocations represent 2.25 percent of the GDP (gross domestic product), and a 5.6 percent increase in the 2016-17 defence budget. This article is an attempt to understand the nature and targets of the new Indian budget, its meaning in the emerging strategic milieu that is demanding and according a new role to India and its impact on the already existing power disequilibrium between India and Pakistan.


The Indian defence budget for 2016-17 is higher than that of 2015-16, which was 36 billion dollars and was 1.75 percent of the GDP. The present budget would have been even higher if the expenditure on pensions, border security forces and nuclear and missile development had been included in it. Besides, the allocations for research and development and for Defence Ordnance Factories have been shifted from the Ministry of Defence to the capital budget. In spite of this shift, the capital expenditure has received an increase of 20.6 percent as compared to the previous allocations. If only pensions had been included in it, this would be 2.3 to 2.4 percent of the GDP. Despite this, the apportionment for defence in this budget is about 12.78 percent of the total expenditure of the government of India, that is 21.47 lac crore. In line with the past practice, the Army, which is perceived to be the main instrument against China and Pakistan, has received 52 percent, followed by the Air Force with 22 percent and Navy's 16 percent while 5 percent has been allocated to DRDO (Defence Research and Development Organization). The upward spending on defence is a deep-rooted trend in the behaviour of the Indian state. In the 1960s, it had a defence budget of 600 million dollars and it was 2.1 percent of the GDP. Subsequently, it jumped up to 4.5 percent of the GDP; that was meant to assert India as a real strategic power at the regional and international levels. In the 1990s, the defence budget rose to 5 percent of the GDP; and in real terms it was 7.5 billion dollars. After that, its economy was on the rise by more than 7 percent and India planned to acquire capability to fight a two-front war with both China and Pakistan. During 1995-2005, the Indian defence budget grew on average over 5.5 percent annually. Its overall defence spending registered an increase of 30 percent; and in 2001, its budget was around 11.1 billion dollars. By 2012 India’s defence budget was growing by 13 and 19 percent although its GDP growth was about 7.6 percent. A significant push came in 2014, when Finance Minister P. Chidambaram announced a 10 percent increase in the defence budget and took the budget figures to $36.3 billion. India’s sustained efforts have contributed to its strategic importance. At present, it has a standing force of nearly 1.5 million personnel and its defence budget is the fourth largest in the world after the U.S., China and the UK.

 

India under the Modi administration is trying to seize the vulnerability of Pakistan to change its behaviour with reference to plebiscite in Kashmir and its demand for a fair treatment in the South Asian state system.

India, under the Hindu nationalist government of Prime Minister Narendra Modi, has witnessed a sharp rise in the Indian defence budget which is justified with the help of two emotive themes: one, it is meant to reform the accumulated obsolescence of the country’s strategic infrastructure; and two, it is to ensure the promise of autonomy and self-sufficiency in the defence production by ‘Make in India’ programme. It is argued that a large part of the Indian defence equipment is of little use for an emerging major power because it is of low quality and has aged as well. Moreover, the average infantry soldier of India is technologically at least one generation behind in comparison to his counterpart in the modern armies of the industrialized states. Therefore, its protagonists contend that if India wishes to balance both China and Pakistan and also play the role of a major power at the regional and international level, then it needs to change its old low-tech weapon systems. Additionally, it is considered essential that a major power like India should have more autonomous standing by reducing its dependence on imports; that it should achieve greater self-sufficiency in the production of sophisticated defence equipment. Consequently, successive defence budgets have provided lavish funds for domestic defence research and development as well as defence industry. In the present budget, the DRDO, which is responsible for the development of nuclear and missile systems, has received 14819 crores. This organization is involved in the development of short range 700 kms Agni-I, intermediate range 2,000 kms and Agni-II surface-to-surface missiles. It is also developing contemporary weapon-locating radar and the main battle tank (MBT), the Arjun, for the Army. In recent years, India has opened up its domestic weapons industry to foreign investment; and the foreign investment limit in the domestic defence industry has been raised from 26 percent to 49 percent. Apart from this, India is the largest weapons importer in the world; in just one year (2013), it spent $6 billion on buying equipment. India is expected to spend $100 billion over the next decade on a defence modernization programme. Its armed forces desire to get 22 Apache helicopters, 50 Chinook helicopters, 197 light utility helicopters, 135 lightweight howitzers, 6 submarines and 16 multirole helicopters for the Navy. It has already approved a project worth 13 billion dollars to increase its national defence preparedness. The Indian Defence Acquisition Council (DAC) has decided to build within India six submarines, purchase 8,356 anti-tank guided missiles from Israel, 12 upgraded Dornier surveillance aircraft with improved sensors from Hindustan Aeronautics Limited and 362 infantry fighting vehicles.


India’s economy is on the rise. It has grown from a contested regional power to one of the pre-eminent regional powers along with China and Japan. It has more resources at its disposal to spend on the defence sector. Although in terms of GDP the defence spending has decreased from 2.9 percent in 2009 to 2.3 percent in 2015 – now around 2.25 percent of GDP – but in terms of resources it has reached the capacity of 51 billion dollars. The resources available to its defence institutions are more than their capacity to absorb; for example, the utilization of the defence budget in 2014-15 and 2015-16 was 95 percent and 91 percent, respectively. Similarly, it has repeatedly underspent funds that were allocated for capital acquisition; this was 11 percent in 2012-13, 9 percent in 2013-14, 13 percent in 2014-15 and 15 percent in 2015-16. At the domestic level this trend may reflect bureaucratic incompetence but at the external level it indicates the rising Indian comfort to accumulate and exert power. This trend becomes even more significant with the decline of its poverty indicators from 44 percent to 26 percent within the last twenty years. This argument should be read with the fact that India faces no immediate threat from any of its neighbours near or far from its border. It is strategically in a comfortable state and faces no threat to its survival and extended interest from within or abroad. According to the logic of power, it is moving towards domination over others. The continuous rise in the defence budget reflects this trend in the behaviour of India regionally and internationally. It has serious territorial and water disputes with Pakistan and China. In line with the logic of power it has closed the door of negotiation with Pakistan and demonstrates no particular urgency to resolve its issues with China as well. Though it is too early to declare India a major international power or even regional hegemon, its share in the international defence spending was 1 percent in 1995 and 3 percent in 2015. Notwithstanding the Indian low international strategic standing, its arrogant attitude in its relation with neighbours is a cause for grave concern.


India’s exaggerated claims of power and consequent stubborn diplomatic behaviour is the result of two developments: one, the rise of Hindu nationalists to power at the domestic level; and two, its evolving strategic cooperation with the USA at the international level. Since its independence, India has considered itself a major player at the international level. It believes that it is its legitimate right to be a permanent member of the United Nations Security Council like China, in order to have a meaningful role in the governance of the international system. With the leadership of its first Prime Minister Pundit Jawaharlal Nehru, India attempted to play a major role at the international level as an opponent of the power politics and the champion of the rights of the Afro-Asian people against western economic and political imperialism. At the same time, it struggled to attain economic and strategic power to assert its claim of a major power in a forceful manner. India under Nehru and his successors exerted to achieve national cohesion on the principles of composite-culture, secularism and liberal democracy and at the international level it sought strategic autonomy by staying away from the power politics of the Cold War between the Soviet Union and USA. At the regional level, Nehru’s India wanted to impose the Delhi view of one strategic unit for South Asia and wished to keep it free from the influence of outside powers. After the Indo-China border clash of 1962, India tilted more towards the Soviet Union than the USA for technology transfer, heavy industry and sophisticated weapon systems. The Hindu nationalists challenged Nehru’s vision of India as an attempt to impose a western vision to deprive its people of their Hindu tradition and heritage. They presented the concept of Hindutva and integral-humanism based on the ethos of Hinduism that they argued were based on common blood, common laws and rites, and common culture of the Hindu people. It was argued that in the past India was subject to foreign subjugation of the Muslim invaders followed by the British imperialists because of its internal fragmentation. The Hindutva ethos is considered the only way to evolve a cohesive national identity that will provide the requisite Shakti-power to defend India. At the international level, the Hindu nationalists find the integral-humanism closer to the capitalist system. They aspire to expand their relations with the West and consider themselves the natural allies of the USA. Simultaneously, they want to increase India’s military power and assert its regional and international role. Modi government shares the view of the Hindu nationalists and wants to build a strong Indian national identity based on the ethos of Hindutva in which Hindu and Indian interests take primacy over any other consideration at the domestic and regional levels and see in the post-Cold War era an ideal opportunity to attain the rightful place for India by building closer ties with the West particularly USA. The internal and external opponents of Hindutva are advised to accept the new realities of Indian power and adjust themselves with the priorities of Hindus and India.

 

The continuous increase in the Indian defence budget is not good news for Pakistan. India remains, in terms of its strategic capabilities, the principal threat to its security. The growing conventional asymmetry between the two states undermines the regional stability and negatively impacts upon the balance of strategic deterrence.

In the post-Cold War era, the rise of China as a potential strategic power and the good performance of Indian economy are the two factors that are determining the India-U.S. relations. India perceives the U.S. as an ally in future for two reasons: one, as a possible source of modern weapon systems and technology; and two, as a power that can provide an existing strategic structure to channelize the rising Indian influence at regional and international levels. It may facilitate India’s admission into such international institutions as Nuclear Suppliers Group (NSG) easy and assure permanent membership of the UN Security Council. On the other hand, the U.S. looks at India as a good rising market for its goods both civil as well as military, as a balancing factor for the rising Chinese influence in the Afro-Asian countries, and share the burden of security at the regional level especially against potential strategic competition from China. The U.S. is willing to upgrade the strategic potential of India to achieve these objectives and extend active diplomatic support to India to get the membership of international institutions that may formalize the regional power status of India as a useful ally. That is the reason successive U.S. administrations especially that of Barack Obama have strongly supported India's case for the NSG and Security Council membership. At the domestic level the U.S. political elite has enthusiastically received support for the alliance with India. The U.S. Congress has passed the India "Defence Technology and Partnership Act" that provided a strong legal framework for the Indo-U.S. defence relations and formalized India’s status as a major partner of the U.S. On its part the Obama administration instituted the Defence Technology and Trade Initiative (DTTI) and established an "India Rapid Reaction Cell" in the Pentagon to deal with bureaucratic hurdles in the way of strategic cooperation between the two states. Additionally, President Obama encouraged the coordination with India on an annual basis for the development of military contingency plans for addressing threats to mutual security interests of the two countries. India sees a great opportunity for the strengthening of its technological industrial base with the help of U.S. assistance and technology. The Indian flagship indigenous projects such as the aircraft and tanks have not been very successful; therefore, it would be happy to use facilities under the DTTI structure for the U.S.-India defence trade. The strategic cooperation with the U.S. will be difficult for India; it will generate an impression of India as a contract ally who is paid to protect the U.S. regional interest especially against China. India is internally a diverse soft-state that cannot afford to have open hostility with China and expose its national integration for others’ strategic gains. That is why it has accepted the Logistics Exchange Memorandum of Agreement (LEMOA) with the U.S. that allows the two countries to access each other’s supplies, spare parts, and services from military bases and ports but has refused joint patrol of U.S. and Indian Navies in the Indo-Asia-Pacific waters. Despite certain reservations, the Indian strategic alliance with the U.S. can help India establish a regional hegemonic relationship.


The continuous increase in the Indian defence budget is not good news for Pakistan. India remains, in terms of its strategic capabilities, the principal threat to its security. The growing conventional asymmetry between the two states undermines the regional stability and negatively impacts upon the balance of strategic deterrence. The recent increase in the Indian defence budget has taken place when the Modi government has taken an increasingly belligerent stance towards Pakistan. It is repeatedly using hostile language and violent clashes are reported along the Line of Control (LOC) and the Working Boundary. The changed international strategic environment places Pakistan in a disadvantageous position. It uses to balance India in conventional term with the help of better trained manpower and western sophisticated weapon system. The U.S. tilt towards India disturbs greatly the strategic calculations of Pakistan. It is gradually finding it difficult to balance rising India with its mere 7 billion dollar defence budget and becoming more and more dependent on nuclear deterrence. The nuclear weapons are essential for the deterrence purpose and cannot be used for fighting a conventional war. In an asymmetrical conventional balance of power Pakistan is becoming more and more dependent on the nuclear weapons which limit the strategic options of a state to defend its autonomy. Therefore, military capabilities are essential for conventional defence and internal security of a state. India under the Modi administration is trying to seize the vulnerability of Pakistan to change its behaviour with reference to plebiscite in Kashmir and its demand for a fair treatment in the South Asian state system. It has refused to negotiate with Pakistan and is putting pressure through threats of hot pursuit in Kashmir in order to call, what the Indian strategic thinkers have described a nuclear bluff. At the international level, India under Modi is using its new-found economic power and closeness with the U.S. to create diplomatic difficulties on the issue of war against terrorism and is attempting to put constraints in the access to high-end technology. Though the Indian challenges are not very great at this moment but in future if the asymmetry in the economic strength continues to expand, India will be in a position to create serious problems for the security and extended national interests of Pakistan. Additionally, if the strategic tensions surge between the U.S. under President Donald Trump and China, then Pakistan will be forced to take the Chinese side and preserve its strategic alliance with China. This probability can greatly increase Indian access to the Western markets and technology and can hurt Pakistan’s strategic options.


The economic rise of India is a significant phenomenon for the regional and international political calculations. Gradually, it will have more resources available for investment in its armed forces, although it will still be treated at the international level as a trading nation and an almost insignificant strategic player. But at the regional level, its increased military muscle might create serious security risks for the sovereign existence of the medium and small states of South Asia. The states of South Asia will be forced to increase their defence budgets and look for external alliances or surrender to the Indian dictates. Pakistan, the second largest state of the South Asian state system, will face the same dilemma though at a lesser level. It will have to increase its resources and widen its cooperation with the regional powers. Before doing that, it must strengthen its domestic politico-economic and social structures and then develop alliances at the regional and international levels.

 

The writer is on the faculty of Quaid-i-Azam University (School of Politics and International Relations)

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