| NEW DELHI
NEW DELHI Feb 28 India increased annual defence
spending by about 11.6 percent on Monday, aiming to overhaul the
military to counter the rapidly growing capabilities of giant
The hefty increase suggests the government plans to move
ahead with some of a slew of planned defence acquisitions,
analysts said, including a $10.5 billion fighter jet contract,
one of the world's largest on offer.
India, among a host of countries wary of China's economic
and military heft, is also eyeing surveillance helicopters,
transport aircraft and submarines to beef up defences in the air
as well as in the Indian Ocean.
Finance Minister Pranab Mukherjee, presenting the 2011-2012
budget to parliament, set the military budget at just over 1.64
trillion rupees ($36.28 billion), up from last year's 1.47
trillion rupees. Last year the increase was about 4 percent.
"China is the real long-term challenge on the strategic
horizon and India's security planning is geared toward it," said
retired brigadier Gurmeet Kanwal who heads the government-funded
Centre for Land Warfare Studies.
China, which considers the U.S. military as its main rival,
set its defence spending at $78 billion last year. It is
expected to announce a defence budget for 2011 later this week
ahead of an annual session of parliament.
The core U.S. defense budget -- not including war funding --
was $530 billion in 2010.
More than 40 percent of the Indian defence budget for 2011
will be spent on capital expenditure, Mukherjee said, while the
rest will go toward maintaining one of the world's largest
standing armed forces.
"Needless to say, any further requirement for the country's
defence would be met," he said seeking to assuage concerns that
the rise in spending was short of the military's expectations.
Old rival and neighbour Pakistan, which like India, also has
nuclear weapons, is also a factor in India's defence planning.
Indian officials expect to conclude negotiations to buy 126
combat aircraft by the end of the current fiscal year, the
country's largest-ever defence order.
Saab's JAS-39 Gripen is competing with Boeing's
F/A-18 Super Hornet, Dassault's Rafale, Lockheed's
F-16 and Russia's MiG-35 to win the fighter contract which
Indian officials said can eventually go up to 200 aircraft.
Kanwal said the defence allocation was enough to proceed
with the fighter aircraft deal, although it may not leave much
room for other arms imports.
"In the first year there is a signing amount you have to pay
which shouldn't be a problem," he said.
India, which traditionally has had an edge over China in
terms of combat air superiority with more modern planes, has in
recent years seen the gap closing as Beijing modernised its air
China's plans for a stealth aircraft, designed to rival the
U.S. F-22, have in particular unnerved Indian security planners
prompting a race to overhaul the air force with its Soviet-era
India, which long focused its military planning on Pakistan,
is also scrambling to modernise its navy to counter China's
influence in the Indian Ocean through its "string of pearls
strategy" of developing a network of friendly ports from Gwadar
in Pakistan to Hambantota in southern Sri Lanka.
Another military expert said given the scale of the
challenge facing India, the increase in defence expenditure was
"It's not a dramatic increase if you take inflation into
account. Military inflation will be even higher," said Ajai
Sahni, director of the New Delhi-based Institute for Conflict
"It doesn't really demonstrate a will to completely overhaul
the armed forces to meet the challenges."
(Editing by Alistair Scrutton and Robert Birsel)