How long can Moscow play on India's failure to build its defence industry

The Indian Armed Forces are still heavily dependent on Russian hardware. Source:

The Indian Armed Forces are still heavily dependent on Russian hardware. Source:

According to SIPRI’s latest report on international arms transfers, Russia has increased its Indian market share, and is set to be the main supplier of arms to India for the foreseeable future.

The Russia-India defence partnership which began in the mid-1960s continues to defy diversification efforts by both countries. A new report by the Stockholm International Peace Research Institute (SIPRI) shows that Moscow and New Delhi are hugely dependent on each other – and there’s no slowing down.

The report titled ‘Trends in International Arms Transfers - 2016’ shows that the bulk of Russian arms exports during the five-year period 2011-2016 went to a comparatively small group of states, with India accounting for 38 per cent. Vietnam and China each accounted for 11 per cent and Algeria for 10 per cent. In contrast, the U.S. has a more even spread, with its chief client Saudi Arabia having only a 13 per cent share of total American weapons exports, UAE 8.7 per cent and Turkey accounting for 6.3 per cent.

India’s dependence on Russian weapons is greater, with Moscow supplying a whopping 68 per cent of Indian arms requirements in the period 2012-16. The U.S. was next largest exporter to India at 14 per cent and Israel followed at 7.2 per cent. “Based on existing orders and weapons, Russia will remain, by far, the main supplier of major arms to India for the foreseeable future,” says SIPRI.

India: Dependency continues

India tops the list of 155 countries which imported major weapons in 2012-16. It was in the top five in the previous five-year period too. As the largest importer of major arms in 2012-16, India accounted for 13 per cent of the global total. Between 2007-11 and 2012-16, its imports increased by 43 per cent. Indian imports in the most recent period were far greater than those of regional rivals China and Pakistan.

While dependency on Russia does not come with strategic risks – because Moscow does not arm twist its customers or impose sanctions – India’s dependency is on the addictive level. Secondly, imports are not allowing the indigenous arms industry to grow. It really is a Catch-22 situation. As SIPRI explains, “A major reason for the high level of imports is that India’s arms industry has largely failed to produce competitive indigenously designed weapons.”

Major-General (retired) G.D. Bakshi, a leading commentator on defence matters, wonders if India will be importing all its weapons in 2030-40. “It is a pathetic thought for… aspiring global power,” he says. “We need to indigenise with a vengeance – not just for reasons of strategic autonomy but even more for reasons of economic well being. We need to create a vibrant public-private partnership in defence.”

It’s not that India lacks the skills or technology. For decades it has simply lacked the will. While the Indian political leadership – in particular under Defence Minister A.K. Antony – was gripped by decision-making paralysis, in contrast “the failed state of Pakistan next door has been exporting its small arms and low grade military products to some 30 countries”.

While Pakistan is still a fringe player, India needs to match and counter China’s growing defence exports and the political heft that comes with it. Defence deals tend to bind the buyer and seller into a long-term geopolitical embrace that can lead to other economic and political spinoffs for both sides. If not to stanch the flow of cash, New Delhi needs to urgently step up weapons exports in order to checkmate its rivals.

Make in India strategy

A sliver of good news is that Prime Minister Narendra Modi is pushing for a ‘Make in India’ policy whereby the country would become more self-sufficient in arms production. In 2014, in a speech aboard India’s largest warship, the Russian built INS Vikramaditya, Modi said the country should also look toward exporting weapons. “Small countries should feel secure that they have India-produced defence equipment,” he said.

While some of the defence projects underway via partnerships between Indian and foreign manufacturers predate Modi’s pitch, the fact is that Make in India (or Make by India) has captured the imagination of the Indian private sector. For the first time ever, leading Indian corporations such as Reliance – who did not have the faintest clue about defence – have realised there’s big money to be made in the industry. For instance, the Anil Ambani owned Reliance Defence has received approval for 12 industrial licences for manufacturing aircraft, helicopters, unmanned aerial vehicles, all-terrain combat vehicles, night-vision devices, sensors, navigation and surveillance equipment, propulsion systems and simulators.

In the decades ahead, one can expect major battlefield systems to be made in India, resulting in a drastic reduction in imports.

Russian twist

Russia is the world’s second largest arms exporter. Russian exports of major weapons increased by 4.7 per cent between 2007-11 and 2012-16. At the regional level, Asia and Oceania accounted for 68 per cent of Russian arms exports in 2012-16, Africa for 12 per cent, the Middle East for 8.1 per cent and Europe for 5.9 per cent.

Notwithstanding the spurt in exports to traditional buyer India, there is a real impetus to Russian arms exports to markets formerly closed to it. In particular, Russia has been trying to crack open the hermetically sealed (by the U.S.) gulf sheikdoms. The decision to woo the oil-rich region comes in the backdrop of China now buying only the bare essentials from Moscow and India embarking upon Make in India. And while defence budgets are falling in many countries, the Saudi defence budget is estimated to rise to $87 billion in 2020 and the UAE’s defence spending is expected to rise to $17 billion in same period.

On February 20, at the International Defense Exhibition conference, or IDEX, in Abu Dhabi, Russia's state-owned defence enterprise Rostec announced it will partner with the United Arab Emirates for the development of a fifth generation light combat fighter. The UAE has also expressed interest in the stealth-killer Su-35 Super Flanker.

UAE officials announced more than $5.1 billion worth of arms deals for its military at the International Defense Exhibition conference, or IDEX, in Abu Dhabi, with Russia making the biggest mark in terms of contracts. Russian Minister of Industry and Trade Denis Manturov said at a news conference that Saudi Arabia was interested in Russian aircraft and ground weapons.

Russia’s Federal Service for Military-Technical Cooperation (FSMTC) revealed that it was in negotiations with Saudi Arabia for the delivery of weapons and mili­tary hardware. “We are conducting negotiations with the kingdom. We are ready to develop full-scale military-technical cooperation. Hopefully, the result will be positive,” FSMTC Deputy Director Alexei Frolkin told Russia’s Interfax.

Another Russian military success story has been weapons maker Kalashnikov, which has seen sales more than double in the last year. The Middle East market is considered a chief factor in the sales spike. Regional demand for the Kalashnikov rifles, missiles, drones and military vehicles has seen the Russian firm offset losses due to U.S. sanctions.

Moving to a new level

While diversification is desirable, the reality is that there’s no bigger market arms outside the big three (U.S., Russia, China) than India. Russia can include in its catalogue value-added or space-based weapons that India is still unable to produce. Moscow has remained India’s favourite weapons supplier by doing precisely that.

Russia’s first major export to India was the MiG-21 Mach 2 fighter that changed the balance of air power in the subcontinent’s sky. Since India couldn’t afford to buy the jet, Moscow offered liberal finance that could repaid over several decades. The MiG-21 was also the first weapon offered for license production to a developing country.

Since then Russia has offered India paradigm shifting weapons such as nuclear powered submarines, cryogenic engines, warships and supersonic missiles for licence production and in-country development.

As India prepares to build mid-range weapons and light combat aircraft, Moscow needs to move up its game and offer platforms such as the super quiet Yassen class submarine, S-500 missile defence system, the space-based hypersonic glide vehicle, rail guns for the navy or shore-based defences, and other secret weapons that its defence industry is known to design.

India’s industrial base is nowhere near the level of advanced countries and it could take decades for New Delhi to catch up. So Russia has many more years left to stay in the game.

Rakesh Krishnan Simha is a New Zealand-based journalist and foreign affairs analyst.

Views expressed are personal.

Read more articles by Rakesh Simha here.​

If using any of Russia Beyond's content, partly or in full, always provide an active hyperlink to the original material.

Read more

This website uses cookies. Click here to find out more.

Accept cookies