The Stockholm International Peace Research Institute (SIPRI) in its latest report listed India as the fourth largest military spender in the world, the leaders being the US, China and Russia, who account for 56percent of global defence expenditure. It claimed Indian defence expenditure increased by 6percent in 2022 to USD 81.4 Billion which was 3.6percent of the global total. India’s defence budget remains one fourth of China’s and one-tenth of the US. In the case of China and Russia, SIPRI data remains speculative as official details are rarely correct.
The Ukraine war has led to increased Russian defence expenditure pushing it just ahead of India while the expenditure of European nations has also witnessed a substantial jump. Ukraine’s defence expenditure jumped by 640percent and is now eleventh in the world. Global defence expenditure went up by3.7percent to a total of USD 2,250 Billion. As per SIPRI, ‘this rise displays global uncertainty, insecurity and distrust between nations.’
Despite demands for 2.5 percent of the GDP for defence, India expends a modest 1.97 percent despite growing threat from a belligerent China and a colluding Pakistan which continues to ferment terrorism on its soil. Even the current budget could be misleading as a large part of it is earmarked for salaries, pensions and maintenance of forces in being, leaving barely 23 percent for modernization. India may have cut down on imports in terms of percentages however it remains the world’s largest importer of military equipment when considering the period 2018-22 in terms of payments.
Simultaneously, Indian defence exports have been steadily rising. In 2022-23, Indian exports reached a total of Rs 15,900 crores. These will increase year by year as the Government adopts measures to enhance exports including by granting nations lines of credit and tasking defence attaches to market Indian manufactured products. Government of India undertakings need to enhance their reliability to be able to compete in the global market. Increased failures of HAL manufactured helicopters act as a roadblock to their exports. Global interest in the Indo-Russian Brahmos missile is a positive input.
The defence budget alone is not an indicator of the nation’s military spending. What is of greater importance is funds for modernization, which, in India’s case, is just 23percent of the total outlay. This has resulted in shortfalls in capabilities in all three services. As stated by the army chief, General Manoj Pande, in his army day address, the armed forces currently possess ’45 per cent vintage, 41 per cent current and 12-15 per cent state of the art,’ in their equipment profile. Ideally the figure should be around 33percent in each category.
The chief added, ‘By 2030, because of our modernisation plans, we will reach close to 35 per cent current and 44 per cent state of art.’ The question remains on whether allocations of funds will continue to support this move. India’s major success story has been in its missile development. Simultaneously technology in key areas has been a matter of concern. Key components in major equipment, including aircraft, tanks and ships, remain imported.
While percentage of domestic participation may increase, technology gaps ensure high cost of imports. Hence, what India needs to cater for is collaboration in high technology sectors with leading global defence manufacturers, as is currently under discussion with GE motors of the US for manufacturing aircraft engines in India. India must not continue as an assembly hub as is the case with global companies establishing plants in India but insist on developing manufacturing and maintenance centres. It is only by bringing in technology can things change.
Indian investment in R and D though witnessing a year-on-year increase remains low. Emerging technologies including AI (Artificial Intelligence), robotics process automation, quantum technology, advanced materials, advanced computing, semiconductor technology, hypersonic technology and blockchain are now being exploited for defence. AI can be a game-changer in logistics, information operations, intelligence collection and analysis, command and control, and semi-autonomous and autonomous vehicles. Unless there is substantial investment in their RandD, including by investing in the private sector, India will remain behind. Lessons on exploitation of technology from the Ukraine conflict have been comprehended but need to be implemented.
It is also wrong to compare India’s military expenditure with China. Chinese modernization is not to cater for the India challenge alone but also Taiwan and competition with the US and its allies, including Japan, South Korea and Australia. China seeks to challenge US power for which it needs to develop capabilities beyond dealing with India. Against India, terrain friction restricts employment of troops and equipment in any region and the fact that India controls the watershed with strong defences could result in unacceptable level of casualties to assaulting Chinese troops.
Further build-up of forces, logistics and support weapons cannot remain hidden in the current technology dominated era despite better infrastructure. Better technology can only provide limited advantage to China, ultimately it will be the soldier on the ground who will differentiate between victory and defeat. It is here that India has an advantage. Similarly, while the Indian navy will operate in its own backyard the Chinese navy will be compelled to operate thousands of kms away from its bases.
For India, reducing its pension bill, while increasing its modernization share, is of paramount importance. The Agniveer scheme is intended for just this change. However, the question which remains is whether the Government will continue increasing the defence budget when the pension and salary budget decrease.
Finally, the finance minister should not resort to inter-service allocations. With the creation of a Department of Military Affairs under the CDS and the defence ministry, allocations must remain their responsibility. This will ensure capability development based on emerging threats and planned response. In addition is the release of a national security strategy to enable capability development and matching release of funds. In summary it is more important for smarter management of the defence budget rather than blindly maintaining it at similar levels catering for inflation.
The author is Major General (Retd)
Defence budgets and capability development