India's military imports are expected to reach $30 billion by 2012 with its armed forces expected to ink defence deals for multi-role fighter jets, 155mm howitzers, and a variety of helicopters and long range maritime reconnaissance aircraft over the coming years. A leading Industry Chamber has made these projections in a report on `Avenues for Private Sector Participation in Defence' in Dec 2007. The report points out that over the past three years, India has spent as much as $10.5 billion on military imports, making it amongst the largest arms importers in the developing world.
The report also points out that with an ever increasing demand for higher allocation for defence budgets, and with a limited capacity on the part of the government to meet the demand, the defence sector needs to re-think how it could procure its goods and services from existing allocations in a more efficient manner.
According to Assocham President, Venugopal N Dhoot, the Indian military spend was about $20 billion in the last fiscal and is expected to grow 7% annually over the next 5 years.
The country's military spend amounts to roughly 2% of GDP, which is without accounting for expenditure on Defence Pensions, PMFs and the MOD itself as part of budgeted Defence Expenditure.
The report points out that despite the MOD setting a target of achieving 70% self-reliance in defence production ten years ago, the country has only achieved about 30 % of self-sufficiency. Some of key civil industry players supplying defence equipment and services include Tata Group, Mahindra & Mahindra, Kirloskar Bros., Larsen & Toubro, Ashok Leyland, Jindal, Max Aerospace & Aviation and Ramoss India.
The report essentially argues that competitive bidding must be introduced for all defence tenders in order to generate greater involvement of the Private Sector in the Defence Sector and, in the process, reduce the burden of imports.
Brigadier (Retired) Sukhwindar Singh
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