6 Months agoHere is the first of a series of articles, as part of our special coverage in the run-up to SPIEF...Taking a closer look at defence ties
This year, as India and Russia mark 70 years of diplomatic ties, India is also Guest Country at the St Petersburg International Economic Forum (June 1-3, 2017).
Here is the first of a series of articles, as part of our special coverage in the run-up to SPIEF. Taking a closer look at defence ties.
Indo-Russian Defence Ties
As India and Russia celebrate 70 years of diplomatic ties, it is integral to note that both sides share an enduring strategic partnership involving cooperation in several high-technology sectors. For over five decades, defence cooperation has been the centerpiece of their strategic partnership. This partnership goes beyond mere trade ties, rather it has elevated to a level where it entails a much more collaborative effort in the spheres of research, design development and production of state of the art military platforms.
India has the third largest military in the world and is the fifth biggest Defence spender, spending about 30% of its total Defence budget on capital acquisitions. In 2017-18, India’s capital outlay in the Defence budget received a boost of 10% over the previous year. Overall allocation for Defence expenditure is US$ 42.7 billion.
When it comes to recent reforms that encourage foreign investment, the country’s FDI policy has been revised to allow up to 49% FDI through automatic route and up to 100% FDI under Government route on a case-to- case basis.
All the wings of India’s armed forces – the Army, Navy and Air Force -- are using major platforms of Russian origin, including an aircraft carrier, SU-30 MKI fighter jets, and T-90 battle tanks, among others. The BrahMos supersonic cruise missile - an Indo-Russian joint venture - remains the gold standard of defence collaboration between India and a foreign nation. The recent, successful test of the longer-range 450-km version is another feather in the cap for the collaboration. Some major deals signed recently have been for five S-400 Air Defence systems, four improved Krivak/Talwar class stealth frigates, and production of at least 200 Kamov-226T utility helicopters in India.
Given the current Government’s determination to use India’s private sector as a vehicle for indigenizing defence production, joint ventures between Indian private defence majors and Russian Original Equipment Manufacturers shall be viewed favourably under the current policy dispensation.
The dynamics of Indo-Russian defence collaboration have evolved from a simple buyer-seller relationship towards collaborative joint action. Moscow already has an institutionalised military- technical cooperation (MTC) framework with New Delhi. Both sides are working towards defence technology transfer, trade, research, co-development and co-production for defence articles and services, including the most advanced and sophisticated technology.
Opportunity beckons --
with over US$ 130 billion to be invested in the military modernisation programme over the next 6-7 years, there is a huge opportunity for Indian and foreign firms across the supply chain.
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