It is tempting to conflate India’s military spending and its large armed forces with military power. Stockholm International Peace Research Institute (SIPRI) lists India among the five largest spenders on defense behind the United States and China, both formidable military powers engaged in global rivalry for strategic space and influence. Therefore, it is natural to assume that as the third (or sometimes the fourth; last year, Saudi Arabia sneaked into the third position) contender on the list, India would at least be a rising military power.
The devil is, however, in the details of this military spending – both in its volume and where it is spent. Statistics come in handy for both. While the U.S. spent $801 billion on its military and China $293 billion U.S. in 2021, India spent $76.6 billion U.S. that year. This figure dropped to $61 billion U.S. in 2022.  Even more interesting is where this money went. In its 2023 report, SIPRI once again listed India as the biggest arms importer in the world. 
Clearly, spending on weapons cannot be a measure of military power, which has to be judged by the deterrence value a nation has. Put simply, in India’s case, its military power can be seen from whether its adversaries, China and Pakistan, are deterred by its potential to inflict military punishment on them. If indeed they were deterred, would Pakistan continue with the proxy war against India in Kashmir? Would China violate the Line of Actual Control (LAC) and occupy Indian territory?
Military power is a coalescence of three critical elements: military-industrial complex, political determination, and secure homeland. As history of the past century has shown, size, either of the armed forces or the nations, does not matter. Smaller nations and forces have been able to cause big powers enormous grief.
India’s military power has been tested mostly against Pakistan, a much smaller country geographically, economically, and militarily, where, barring the creation of Bangladesh in 1971, the conflicts have ended in a stalemate, with peace achieved by mutual give and take through international intervention. The only time India fought against a bigger nation, China in 1962, the war ended in defeat, including loss of territory. Since India’s military power is mostly presumed rather than proven, it is only fair to measure it against the three parameters mentioned above.
The primary purpose of any defense industry is to serve the nation’s armed forces. For this, the industry needs to work in close coordination with both the political dispensation and the military to stay in step with anticipated threats, as well as the means to mitigate or counter those threats. Only with this three-way cooperation can the industry produce what the military needs. This is referred to as the military-industrial complex (MIC), where the three stakeholders – the military, which projects the requirements and uses the equipment, thereby placing its trust in it; the government, which approves the requirements and finances them; and the industry, which develops and manufactures the required systems and technologies – work in close coordination.
Defense exports, which are regarded as the touchstone of quality and competitiveness, are a byproduct of the above coordination. Since national military requirements are finite and ever evolving, and the weapons-development process long and capital intensive, it’s impossible for industries to sustain themselves solely on the basis of domestic supply. That’s why, once the domestic requirements are met, similar technologies/systems/platforms, etc., are offered to global customers. One critical prerequisite for defense exports is induction or operationalization of the equipment by the home military. That is the biggest source of marketing for any military product. The wars in Afghanistan and Iraq propelled the export of weapons systems successfully deployed in these theaters. After all, if a country’s own military has little or no faith in the weapons systems produced by its industries, how can others trust it?
Herein lies the truth about India’s military-industrial complex: If India is the largest importer of military hardware worldwide, clearly the Indian defense industry has been unable to meet the requirements of the Indian military. The domestic defense industry is critical for any nation’s military power for two reasons. One, it ensures independence of foreign policy; and two, it gives the nation the confidence to employ military force in service of national interests without worrying about sustaining such employment, because the domestic industry would step up production of ammunition to meet the military requirements. From World War II to the current Russia-Ukraine conflict, military campaigns have long been sustained due to a surge in production of defense equipment by the domestic industries.
Dependence on foreign military supplies restricts a country’s foreign policy choices, and consequently its capacity to wage a military campaign. For instance, the U.S. has put restrictions on Pakistan’s use of F-16 fighters against India. And India’s dependence on Russian weapons comes in the way of its relations with the U.S.
Two conflicts in particular, separated by over two decades and united by the similar lack of military preparedness because of overdependence on defense imports, underscore the importance of the domestic defense industry. In the summer of 2020, when Chinese troops sauntered into Ladakh and occupied up to 1,000 square kilometers of Indian territory,  apart from the shock and awe, what paralyzed the Indian government was the realization that it was militarily unfit to take on the PLA. This forced the government of India to do two things.
One, it rushed into signing a joint statement with China in September 2020 in Moscow (mediated by Russia), which disproportionately favored Beijing.  It eschewed the mention of the LAC and only made passing reference to the amorphous “border areas.” Moreover, it talked only of disengagement and not de-escalation, implying that PLA troops would not retreat from the Indian territory they had occupied, and that disengagement would happen on Indian territory, which meant Indian troops would need to step back further.
Two, it authorized the emergency import of materiel worth Rs 5,000 crore (about $610 million U.S., per the current rate) in 2020 for the Indian military.  Apart from equipment, this included creature comforts, such as insulated all-weather tents, high-altitude clothing, and shoes for the troops deployed overnight in eastern Ladakh to resist further Chinese intrusions. The noteworthy point here is that the Indian troops depend upon imports for even nonlethal equipment, such as clothing and habitat.
China’s actions of 2020 brought back memories of Pakistan’s intrusion in the Kargil sector of Ladakh in 1999, which led to what is popularly remembered as the Kargil conflict. In the winter of 1998-1999, irregular troopers aligned with the Pakistan army moved into Indian military posts on the mountain range abutting western Ladakh, which the Indian army used to vacate in winter due to harsh weather conditions.
With over a decade-long engagement in counterinsurgency operations in the restive state of Jammu and Kashmir (since 1989), the Indian army was both distracted and disoriented from conventional war. Hence, when it discovered Pakistani irregulars on high-altitude locations in the Kargil region overlooking Indian territory, it went into panic mode. This was further aggravated by Defense Minister George Fernandes’ assertion that intruders would be thrown out within 48 hours. 
The Kargil conflict was India’s moment of truth. Left with no choice, Chief of Indian Army Staff General V.P. Malik told the media that, “We will fight with whatever we have.”  Even if the chief hadn’t spoken, the weapon-exporting nations knew the truth of India’s defense preparedness as bureaucrats got busy either calling up friendly nations for emergency ammunition or flying out with suitcases to purchase spares in hard currency. 
Eventually, the Indian army and air force managed to evict Pakistani intruders at a great cost. According to statistics from the government of India, 527 died and 1,363 were wounded  in a conflict that the Pakistan air force did not join. The government was shaken enough to set up the Kargil Review Committee (KRC), which among other conclusions faulted India’s premier Defence Research and Development Organisation (DRDO) and government-owned defense companies for letting the nation down. To reform this state of affairs, KRC recommended opening up defense manufacturing to private companies, which were deemed to be more efficient and accountable. 
Fired up by the idea, in 2001 the government declared “self-reliance” in defense as the way forward. Certain reforms were initiated to bring the private sector into defense manufacturing (even if as small-time suppliers). A defense offset policy was promulgated, which stipulated that all original equipment manufacturers (OEMs) invest a certain percentage of their total sales into the Indian defense industry to give it a leg up. When it was discovered that the Indian defense industry did not have enough breadth to absorb the windfall of offsets, and the OEMs were failing to meet their obligations, the scope was extended to civil aviation. When even that was found inadequate, offset scope was broadened further to include homeland security and, subsequently, infrastructure building.
Over the years, the defense procurement procedure (DPP) and the offset policy were repeatedly reformed. The idea was that the purchase of defense equipment should also lead to capacity building of the Indian industry by absorption of technology and adoption of global best practices. But in effect, all of this led to further complicating the procedure, adding multiple categories and subcategories for procurement, thereby adding substantial latency to the process of importing defense equipment.
The complicated procurement procedure created room for agents, which the Indian system criminalized, both to simplify the process and to negotiate the labyrinthine Indian regulations. The latency led to possibilities of corruption at the various levels of bureaucracy.
When Prime Minister Narendra Modi came to power in 2014, he did two things to give a push to the defense industry. He renamed DPP as Defence Acquisition Policy (DAP), and the slogan of “self-reliance” was replaced by “Make in India.” After his 2019 election victory, “Make in India” was renamed “Aatmanirbhar Bharat,” which actually is the Hindi translation of “self-reliance.”  This was not only going back in time linguistically, but an admission that the Indian military-industrial complex was running on a treadmill.
Two examples particularly demonstrate this. In 2001, the Indian air force (IAF) expressed that it needed 126 multirole combat aircraft (MRCA) to replace those it intended to retire progressively over the coming few years. Following government approval, a request for information was issued to six major fighter manufacturers. Based on the information received from those manufacturers, the IAF issued a request for proposal in August 2008, and the competition began among the contenders – United States’ Boeing and Lockheed Martin, France’s Dassault Aviation, the European Union’s Eurofighter consortium, Sweden’s Saab, and Russia’s United Aircraft Corporation. Of the 126 fighters, 18 were to be bought off the shelf and 108 were to be built in India under transfer of technology (ToT).
After a rigorous process of trials and evaluation, in 2011 the IAF shortlisted Eurofighter consortium’s Eurofighter Typhoon and Dassault Aviation’s Rafale as fighters that best met its requirements. By 2012, the Ministry of Defence’s price negotiation committee shortlisted Rafale as the most cost-effective fighter through its service life. Then started the process of protracted discussion with Dassault Aviation over ToT to the Indian partner Hindustan Aeronautics Limited (HAL) and support to Indian manufacturing of the fighter, among other matters. The discussions continued for several years, but two niggling issues remained unresolved. 
Dassault refused to guarantee the cost of the fighters to be built by HAL. Since HAL would be building a fighter of this complexity for the first time, Dassault presumed that there would be unexpected time and cost overruns, despite its hand-holding. Second, Dassault refused to stand guarantee for the HAL-built aircraft; it insisted that HAL stand guarantee, but the IAF did want HAL’s guarantee. 
Eventually, the program was scrapped in 2015 when, during his visit to France, Prime Minister Narendra Modi announced that India would buy 36 Rafales in flyaway conditions from France – no strings attached. Incidentally, the Cabinet Committee on Security’s (CCS) approval for the purchase came 16 months after the prime minister’s announcement. In normal circumstances, CCS approval comes before the purchase decision.
Meanwhile, with a fast-depleting fighter fleet, the IAF’s struggle to acquire more fighters continued. In 2018, it again floated the proposal for importing fighter aircraft, despite HAL producing a Light Combat Aircraft with nearly 60% indigenous content by value, and DRDO promising a fifth-generation Advanced Medium Combat Aircraft in the years to come. This time, the IAF referred to its hunt for “multirole fighter aircraft,” instead of using the earlier jinxed term “multirole combat aircraft.”
The Indian navy’s quest for submarines has been equally long-drawn. In 1997, the navy envisaged a 30-year plan to attain self-sufficiency in submarine building, and got government approval in 1999. Under the plan, the navy was to procure six submarines from a European nation, and six from Russia (as their design philosophies were different), under ToT. Following the experience of building 12 submarines under ToT, the idea was that the Indian defense shipyards would gain enough expertise to build another 12 “indigenous” submarines. Hence, within 30 years, India would have 24 operational submarines and the capability to make as many as it wanted. That, however, was not how the plan worked out.
For the first leg of the plan, the navy chose the French submarine Scorpene, built by DCNS (now renamed Naval Group). The Indian partner shipyard was Mazagon Dock Limited (MDL). But as in the case of Dassault Aviation, DCNS found MDL not adequately fit to build the Scorpene submarines. Hence, the negotiations dragged. The agreement was finally signed in 2005, after the government of India agreed that DCNS would not only create the supply chain for submarine building, but would also have total control over the construction process – in effect, ensuring that submarines were merely being assembled at MDL under DCNS’s supervision. Since DCNS had to replicate the full French supply chain in India, the program got inordinately delayed. Consequently, the sixth submarine of the program is still under construction, 26 years after it was first envisaged.
The second line of submarines is still at the tendering stage. Of course, there is no longer any question of India building its own indigenous 12 conventional submarines, because the technology is fast approaching obsolescence. The Indian Ocean region is already crawling with Chinese nuclear-powered and nuclear-armed submarines. India’s indigenous and not-so-secret program to build nuclear-powered and nuclear-armed submarines (SSNs and SSBNs) with Russian help remains primitive compared to the technology deployed by militarily powerful nations, including both Russia and China. Hence, they are at best technology demonstrators on the learning curve, rather than operationally deployable lethal weapons.
The Indian MIC is full of such stories of half-hits and several misses, across services and platforms, from cruise missiles to artillery guns. The only measure of success has been the helicopters built by HAL and surface warships built by assorted defense shipyards. Both these systems have substantive imported content by value, including critical components like engines and weapons, despite being made in India. Indian industry tom-toms these as signs of indigenization, citing the example of the interdependent global defense industry, where it is common practice to buy components for one platform from specialist manufacturers, including those from outside the country.
This argument misses one important point, however. When Boeing, as the manufacturer of fighter plane Super Hornet, buys engines from General Electric and missiles from Raytheon, it’s a collaboration between three expert U.S. companies on a platform, each with stakes in it. This is not the case when HAL pays hard currency to import engines from a British or an American company. All nations with credible military force have the capability to produce their own weapons systems; they resort to importing components only for commercial reasons, and mostly for the export of their platforms.
Absence of effective and capable defense industry impacts upon not only defense preparedness, but also budgetary priorities. For instance, in the 2023 Indian defense budget, the largest chunk of capital expenditure (CapEx) was earmarked for the Indian air force because of the installment that had to be paid to Russia for the S-400 air defense missile system.
The second largest chunk went to the smallest of the three services, the Indian navy. This was understandable, as the navy had recently inducted the indigenously built (with almost 50% imported content by value) aircraft carrier INS Vikrant. Vikrant does not yet have its own berthing space and is making do with L&T’s facility at Kattupalli in Tamil Nadu. Additionally, the navy has also contracted for a number of surface vessels, both in India and Russia, for which installments have to be paid. The army, despite being the largest service, and its emergency procurements due to the Ladakh crisis, got the smallest piece of the CapEx pie.
Clearly, dependence on imports guides the budgetary allocations and puts limits on what the government can or cannot do. It is obvious that there is no substitute to building an effective and credible defense industry. The answer to why India has repeatedly failed to do that lies in the second aspect of military power: political determination.
Interests Over Determination
The building of a defense industry is as much a matter of ability as of political determination. As early as the 1960s, the People’s Republic of China (PRC) understood that science had to be harnessed both for the nation’s defense and for the welfare of the people. It modeled its Academy of Sciences on the Soviet system, and sent its scientists in hordes to the Soviet Union to study and train.
Once relations with the West had improved, the PRC sponsored its students to study in the best institutions around the world in technologies that could be harnessed for military purposes. Even today, nearly 300,000 Chinese students study STEM subjects in U.S. universities,  the largest foreign student community in the world, of which nearly 90% return home.  Interestingly, many natives who return to China do so after working in U.S. laboratories and companies for a few years, leading to the suspicion that they carry with them their research work, including sensitive technologies, which U.S. investigators are likening to creative theft. 
A consequence of these multipronged, sustained efforts of decades is that today China is regarded as a military threat by the U.S., so much so that the U.S. believes it needs a coalition of nations, in the form of QUAD, AUKUS, and so on, to contain it. China also figures in the list of the top five military equipment-exporting countries behind the U.S., Russia, and France.
The Indian story contrasts sharply with this. A few years ago, a Russian technocrat with one of the biggest defense companies (dealing with air defense systems) told this author that the Russian government had offered India a few seats for DRDO’s midlevel scientists in the defense company’s laboratories. The government of India proposed that the agreement be made between the Russian and Indian governments through a memorandum of understanding on shared manufacturing and defense technology transfer, rather than between the institutions. Russia declined the proposal.
Indian policymakers always had an ad hoc and short-term approach to military capability building. Hence, they preferred shortcuts to procurements instead of long-term investments in design and development. This impacted India’s industrial capacity building. Obsessed with keeping the military out of the policy-making loop to ensure that the civilian supremacy was not challenged, the government never realized the importance of the indigenous defense industry. As long as the equipment was made in India, it was content that jobs were being created and government-owned companies were churning out materiel that was needed for the military. Whether the Indian companies were developing capabilities to build new equipment based on emerging requirements of the military was immaterial. If the Indian military’s requirements changed, new weapons systems would be purchased, and a new ToT line would be started to keep the wheels of the government businesses running.
For example, the government-run Bharat Dynamics Limited (BDL) started making the Milan anti-tank guided missile (ATGM) on ToT from European company MBDA in the late 1970s. Today, BDL proudly lists Milan as its missile in its portfolio, despite the fact that not only does it not hold the intellectual property rights to the technology, it also doesn’t have the capacity to use that learning to produce a new ATGM.
This is not an isolated case. Take BrahMos supersonic cruise missile, which is a joint venture between DRDO and NPO Mashinostroyenia of Russia. The name itself is a combination of Brahmaputra and Moskva rivers. More than 50% of the critical components of the missile by value come from Russia for assembly in India. Yet the Indian government promotes it as an Indian missile.
There are innumerable such cases across domains, from fighters to tanks to artillery guns. A measure of how much the government values indigenous research and development can be taken from the 2023 defense budget, in which only 10% of the CapEx has been earmarked for R&D. The government also gave a sense of where this 10% would be spent – in buying systems from global technology partners and manufacturing them in India through joint ventures. Today, almost all Indian defense R&D and manufacturing companies have a foreign technology partner. The resultant equipment is given an Indian name and proudly proclaimed to be made in India in pursuance of Aatmanirbhar Bharat. Essentially, the slogan is the policy.
Unfortunately, military power is not built on slogans.
If there were political determination to build an indigenous defense industry, the government of India would have sponsored Indian scientists to study abroad and subsequently nurtured them in Indian laboratories. It would have fixed accountability for both state-owned defense research and manufacturing organizations, instead of running them like any other bureaucracy, where competence and incompetence are treated the same, with job certitude and pension benefits. It would have disinvested substantially from state-run defense companies, allowing the private sector to buy stakes in them, leading to a true private-public partnership. This would have ensured both competitiveness and accountability. It would have instituted a long-term, bipartisan fund for defense research, design, and development. Most importantly, instead of projection, it would have focused on achievable technologies.
India has unresolved border issues with two of its big neighbors – China and Pakistan. It has military lines with both, the Line of Control and Line of Actual Control, which need to be defended by force. This requires continuous deployment of the military, lest the adversary try to change the military line by force. Pakistan tried to do this in 1999 in Kargil, and China has been doing it regularly for the past 20 years. As mentioned earlier, in 2020, it actually changed the LAC in Ladakh.
While the raging insurgency in Kashmir is globally well known, the lesser-known problems continue to linger on in Central and Northeast India. The most recent reminders of these were the ambush of 10 security personnel in Chhattisgarh by Maoist extremists in the last week of April, and the death of more than 54 civilians from sectarian violence in the restive state of Manipur in the first week of May.  Add to this the unresolved Naga problem, where the peace process continues to elude an agreement.
However, the most dangerous internal security worry is the growing radicalization of the Hindu majority in India.  Once regarded as fringe, and not deserving of being taken seriously, the extremist organizations, such as the Bajrang Dal, Vishwa Hindu Parishad, Ram Sene, Hindu Mahasabha, and so on, now operate with impunity, and with tacit official sanction. At their mildest, these organizations talk about annihilating Muslim citizens of India, urging Hindus to pick up arms. At their worst, they form vigilante groups to stalk, terrorize, and sometimes kill ordinary citizens, largely Muslims and noncaste Hindus, such as Dalits, but also Christians. When the Congress Party said in its election manifesto in the state of Karnataka in April 2023 that it will seek a ban on Bajrang Dal, Prime Minister Narendra Modi likened the organization to the Hindu deity Hanuman. He urged the people to cast their votes against Congress by invoking Lord Hanuman. 
Today, India is the most populous nation in the world, with 65% of its population below the age of 35.  Of this, 7.8% is unemployed.  However, unemployment figures are misleading, as they do not take into account the underemployed (such as people dependent upon underpaying family businesses or farming), seasonally employed (such as farm laborers), and temporarily employed (such as those working below their educational qualifications). Each of these situations leads to dissatisfaction and frustration, creating conditions for anger and radicalization, especially when told that their lives and meager resources are under threat of being usurped by Muslims.
Several experts have been warning that progressively there will be increased violence  and disenfranchisement of India’s Muslim minority,  which is nearly 13.5% of the total population. All of this is a source of huge internal instability, which combined with external threats leads to an extremely vulnerable nation. The present government, despite being democratically elected with full majority, remains insecure. It is forced to coerce opposition into silence by using investigative agencies like CBI, NIA, Enforcement Directorate, Income Tax, and so on as a Damocles’ sword over their heads.  Ordinary citizens who have been critical of the government and its policies are arrested and often charged under nonbailable acts such as the National Security Act or Unlawful Activities Prevention Act, thereby ensuring that they remain incarcerated without a trial.  The government also frequently resorts to suspension of the internet and other communication services in areas it deems to be trouble spots.  Additionally, India ranks high among countries with a poor record of press freedom.  All of this has led international democracy watchers to criticize India as being only theoretically democratic.  Such international opprobrium makes the government both defensive and offensive by turns.
All of this notwithstanding, India’s biggest worry should be that it has not been able to resolve any of its internal security challenges since independence. The oldest Indian insurgency – the Naga insurgency – continues to fester. The Kashmiri insurgency demands the attention of nearly one-third of the Indian military, in addition to money. According to statistics from the government of India, between 2000-2016, Rs 1.14 lakh crore (about $13.9 billion U.S., per the current rate) was spent on holding onto the state.  And the Maoist insurgency continues to take its toll in spurts. Now with communal polarization, the government of India is cleaving open another front.
Far from being an emerging military power, India has never in its history been more vulnerable than it is in the present moment.
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