NEW DELHI — India needs $233 billion to meet its weapons and equipment requirements in the next 11 years, according to the Long Term Integrated Perspective Plan (LTIPP) for 2012-2027, an Indian Ministry of Defense (MoD) source has revealed. However, there's division over whether India will be able to meet the funding need.
The list of the weapons and equipment needed for India's armed forces translates to a cost of $233 billion. According to the MoD source, the money will come from the country's procurement budget, Capital Head.
To meet the funding target, India will need to increase defense spending at an annual rate of more than 10 percent.
The funding allocation in the Capital Head for 2016-2017 is $37.94 billion, which works out to an increase of 2.3 percent in rupee terms against last year's funding allocation. However, in US dollar terms, it was a 10 percent drop compared to last year's allocation of $42.1 billion because of the depreciating Indian rupee against the dollar.
"Given the depreciating Indian rupee and near-stagnant in fund allocation in the last two years, it is unlikely that there would be an annual increase of more than 11 percent to meet the target of $233 billion set by LTIPP for the next 11 years," said Nitin Mehta, an India-based defense analyst.
However, Amit Cowshish, MoD's former financial adviser, is confident India will fulfill the planned requirements. "The amount of US $233 billion works out to approximately 15,000000 million Indian rupees. The current year's allocation for capital acquisitions is around 70,0000 million rupees. Taking this as the base and assuming a reasonable yearly growth of 10 to 11 percent, the total allocation over the next 11 years would anyway be close to 15,00,0000 million rupees. So any acquisition plan that is based on this financial assumption would be quite realistic."
LTIPP lists the purchase of 500 helicopters, 12 submarines, nearly 100 single-engine fighter jets, more than 120 twin-engine fighter aircraft and an aircraft carrier, according to the MoD source said.
Mehta emphasized the importance of meeting these LTIPP requirements.
There are several projects that have been awaiting finalization by the MoD for the last three to four years, including the purchase of 36 Rafale fighters from France; the acquisition of 56 Airbus C-295 transport aircraft; the license production for Kamov 226 helicopters in India; the purchase of 145 ultralight howitzer artillery guns from the United States; the purchase of 100 155mm tracked artillery guns; the purchase of 280 aero engines from Honeywell for the British-built Jaguar aircraft used by the Indian Air Force; and the purchase of five units of Russian-made S-400 advanced air defense systems cleared by the ministry's Defence Acquisition Council.
Email: vraghuvanshi@defensenews.com
Vivek Raghuvanshi is the India correspondent for Defense News.
