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Modi Doubles Weapons Spending

Modi Doubles  Weapons SpendingModi Doubles  Weapons Spending

Indian Prime Minister Narendra Modi has cleared $19 billion of arms procurement proposals since taking power in May, almost double India's spending on weapons in the last fiscal year as he tries to modernize the country's military, Bloomberg reported.

The blitz of 41 approvals spans heavy guns to submarines as Modi seeks to counter China’s rising military heft and take a firmer stance on border disputes with Pakistan. The vice chief of the Indian Air Force, for one, has never seen anything like this pace from the nation’s Defense Acquisition Council.

“I don’t recall the council clearing these many number of procurement proposals within six months and in four meetings,” Air Marshal R. K. Sharma, who has served in the air force for four decades, said in an interview. “The indication from the government is that this trend in decision-making will continue.”

Nuclear-armed India has approved 41 proposals at a cost of 1.2 trillion rupees ($19 billion) since June, Defense Minister Manohar Parrikar told parliament in New Delhi this month. Spending on defense equipment in the 12 months ended March 2014 was 669 billion rupees, he said.

The proposals include 190 billion rupees for submarines, a 158 billion-rupee purchase of artillery -- the first acquisition of large-caliber guns since the 1980s -- and a 32 billion-rupee deal to buy 8,356 Spike anti-tank guided missiles and 321 launchers from Rafael Advanced Defense Systems Ltd.

The approvals add to Modi’s other steps, such as allowing more foreign investment in defense and trying to overcome a history of graft scandals that slowed purchases. The changes are stirring interest: Larsen & Toubro, India’s largest engineering business, said Europe’s Airbus Group is assessing whether to boost its stake in their defense joint venture. Boeing Co. is already looking for investment options.

Modi in July increased the limit on foreign-direct investment in defense to 49 percent from 26 percent.

 

Financialtribune.com