India Furthers Strategic Goals by Reaching Out to Arms Markets
stratfor.biz
Oct 29, 2002
Summary
Seeking to increase its arms sales tenfold within the next year and to increase its market influence in Asia and Africa, India is dropping a blacklist that prevented some nations from buying Indian weapons systems. New Delhi needs to increase arms sales in order to spur development of its domestic defense industry, exert greater regional influence and further its goals toward becoming a major regional power -- something that Indian leaders hope will translate into economic and political strength.
Analysis
India is eliminating a blacklist that barred certain countries from buying domestically produced weapons, because the nation's defense ministry hopes to increase weapons sales tenfold over the next year. In an interview with the Indian press, Defense Minister George Fernandes said India is looking for new export markets and intends to sell more advanced weapons systems -- including warships, helicopters, aircraft and electronic warfare systems.
New Delhi's aggressive arms export goal is an attempt to service several strategic aims. India's domestic arms industry has a history of lackluster performance, and increasing sales to foreign countries will fund the research and development budgets for individual firms. New Delhi also could expand its reach and influence in Asia, Africa and the Middle East through increased arms sales -- something that would serve both to counter China's reach and to accelerate India's own drive toward becoming a regional power.
Yet as New Delhi reaches into new arms markets, it may find itself bumping up against not only China, but even its nominal ally, the United States.
Since becoming defense minister in 1998, Fernandes has worked to grow India's defense exports -- in terms of both products and buyers. Yet repeated calls to drastically expand the amount of exports have come to little thus far; instead, Indian defense exports have declined since 1998, when they peaked at around $38.5 million. A year later, they dropped to $28.4 million. Earlier reports put the current export figure at $51.5 million, but Fernandes offered a substantially lower number of less than $20.7 million. In contrast, Fernandes says the government would like exports to hit around $200 million over the next year.
New Delhi has taken several steps to try to beef up arms sales by opening the defense sector to private investment, giving attention to joint development of weapons systems with other nations -- particularly Russia, South Africa and Israel -- and forging a deal with Moscow to allow New Delhi to repair and upgrade weapons systems no longer manufactured by Russia. Now, New Delhi also is abandoning its blacklist of potential weapons-buyers.
These moves are designed not only to expand the sales of Indian weapons systems, but also to improve the research and development of new advanced weapons technologies by domestic defense contractors. India's state-run defense industry often struggled with developing new and improved weapons systems due to extremely nationalistic -- almost xenophobic -- development programs. The results were often massive expenditures on systems development, followed by the purchase of a similar system from a foreign supplier when it became clear that indigenous development was stalling.
Beyond boosting indigenous defense capabilities, Indian officials have a strategic goal in mind -- furthering New Delhi's ability to become a regional power while countering China's expanding reach. Both India and China compete in the small arms market, and New Delhi has admitted that its push into Southeast Asia -- part of a broader economic Look East policy -- is taking place with an eye toward checking Beijing.
India, which from a geographic standpoint naturally should be the dominant power in the Indian Ocean basin, is working to become so and to extend its power outward to the South China Sea, the Arabian Sea and down the coast of Africa. For New Delhi, the dilemma has been in balancing its maritime goals with its terrestrial security needs. The global war on terrorism has expanded India's diplomatic and security reach deep into Central Asia, shoring up its defensive position. At the same time, New Delhi has aggressively pursued its Look East policy -- which is designed to achieve deeper economic integration with Southeast Asia, through such projects as a road network stretching from India into Indochina and participation in regional anti-piracy efforts.
By selling advanced arms or offering to service old Soviet-supplied equipment, Indian officials hope to expand the nation's own leverage in Southeast Asia while simultaneously undercutting China's position. In August, an official from the Department of Defense Production and Supplies told the Indian press that New Delhi already was offering small arms and ammunition, patrol ships, light field guns, helicopters, trucks and aircraft parts to Southeast Asian states at reduced prices -- with all supplies of better quality than comparable Chinese equipment. And the Defense Ministry, in order to accelerate the pace of exports, is subsidizing the industry and considering whether to offer soft loans to purchasing nations.
Over the next decade, India intends to produce weapons systems China cannot, including an indigenously developed air defense ship -- basically a small aircraft carrier. Through subsidies, loans and higher technology, New Delhi hopes to supplant China as a major regional arms supplier. It also can take advantage of underlying concerns about China within Southeast Asia, touting Indian weapons systems as free from the risks of being swallowed by an aggressive China in the future.
Ultimately, India's defense exports may bring it into contention with not only China but also the United States. New Delhi's sales drive inevitably will feed into the ongoing arms race in Asia, raising the stakes in any regional confrontation and making flare-ups between states more likely. For Washington, the ability to freely traverse Asian waters is vital to U.S. strategic interests, and maintaining a sense of stability in Asia is thus a priority -- albeit one that Washington has ignored in recent years. Were India to sell small aircraft carriers to Southeast Asian nations, the potential for clashes in the contested Spratly Islands or the increase in purchases of anti-ship missiles could spell trouble for U.S. operations in and through the region.
For New Delhi, the first priority is boosting its domestic defense industry, spurring innovation and advances in technology and design. Ironically, the quickest way to ensure the industry is capable of producing modern and sophisticated weapons systems -- thus freeing India from dependence on foreign suppliers -- appears to be opening up the sector to foreign involvement in the near term. But as New Delhi continues to advance its domestic arms industry and its military capabilities, the nation's strategic planners will keep a wary eye on China: India's strategic competitor -- militarily, politically and economically -- in Asia. |
