India’s New Defense Budget: Another Year, Another Disappointment? - The Diplomat, 6 February 2020

In this week's column for The Diplomat, I looked at India's defence spending for 2020-21 and it is another year of disappointment, as far as military modernisation of the Indian armed forces are concerned. The new numbers highlight New Delhi’s continued challenge of investing in its much-needed military modernization.

Indian Finance Minister Nirmala Sitharaman presented the new budget for the country last week. From the perspective of defense modernization, the budget has yet again proved to be disappointing, with significant implications for India as well as other key partners and competitors.

For the full essay, click here.



Sitharaman announced an allocation of 4.71 trillion rupees (about $66.9 billion) for the Ministry of Defense (MoD), 15.49 percent of the total central government expenditure. Of this, almost $45.8 billion goes to meet the expenses of the army, navy, and air force as well as the Defense Research and Development Organization (DRDO). The rest of the allocation goes to meet defense pensions (about $19.0 billion) and MoD (Civil) (about $2.1 billion). The revised estimate for the previous year, 2019-20, was $65 billion.

The allocations for the various services are once again not very different from previous years: the army has received the biggest chunk of the allocation of 56 percent, the air force at 23 percent, and the navy has the smallest share at 15 percent. Over the last few years, India’s defense budget allocation has drawn unfavorable comparison to the budgets in the period prior to the 1962 war with China.

This year’s defense budget without the defense pensions amounts to a mere 1.5 percent of the GDP, which is noticeably low considering the state of the military. This figure is made worse by the fact that pensions accounted for only about 5 percent of the defense budget in 1960-61 but have skyrocketed to over 40 percent now, which in essence means that much less of the budget is going toward modernization of military equipment.

As I have written previously in The Diplomat (in 2018 and 2019) the current defense budget allocation comes against the backdrop of the 2018 Parliamentary Committee Report, which brought out severe deficiencies in the Indian military. Indian Vice Chief of Army Staff Lt. Gen. Sarath Chand in 2018 lamented the budget allocation, saying that it “has dashed our hopes.” He argued that as India looks at potentially fighting a two-front war scenario, the Indian military’s deficiencies are that much worse. He said then that unless the government makes necessary funds available for emergency procurement, the army, for instance, did not have war reserves to fight a high-intensity war beyond 10 days. In addition to the two fronts in the east and west, the Indian Army is also bogged down in internal security operations in the northeast and in Jammu and Kashmir.

Two years later, the situation has not improved much. Despite the Modi government’s national security rhetoric, it has failed when it comes to military modernization.

The capital expenditure that is available for the army is slightly less than $5 billion, for the navy it is less than $4 billion, and for the air force slightly more than $6 billion. These in effect cripple the Indian military’s efforts to modernize their weapon platforms. The Indian Army has been making efforts to procure a number of different platforms, including the M777 ultra-light howitzers and the K-9 Vajra self-propelled gun. Buying the indigenously produced 155 mm towed howitzers has also been an issue.

The Indian navy’s deficiencies are again well known. The fact that the number of operational submarines stands at 13 should be a reminder and warning to India of the state of the navy, especially at a time when the Chinese navy is probing the Indian Ocean. Indian efforts at developing the French Scorpene submarines has run into massive delays. The second of the six Scorpene submarine, INS Khanderi, was inducted into service only in September 2019. With the naval capability build-up being a time consuming and capital-intensive exercise, inadequate attention to and slow development of India’s naval capabilities can negatively affect India in any confrontation, including with Pakistan.

The Indian Air Force has its own woes, be it strengthening of the number of squadron or strengthening air defenses. Even though the Indian Air Force has a sanctioned strength of 42 squadrons, it is currently at a low of just about 31 squadrons. Out of the 31 squadrons, close to half of them belong to the vintage category such as the MiG-21s, MiG-27s, and Jaguars. The effort to get the French-built Rafale fighter has been caught in all sorts of problems, and the first four of 36 on order will only arrive this May.

There are no easy solutions to India’s budget problem. But the Indian government needs to consider radical solutions, including curtailing the size of the Indian army, and fast. The alternative is to have a very large but poorly-equipped force that will not be able to meet the challenges it is facing.

The push and pull in the Australia–India partnership - East Asia Forum, 1 February 2020

In February, I wrote a short essay on India-Australia strategic partnership for the East Asia Forum. The essay, "The push and pull in the Australia–India partnership", looked at the pulls and pressures of this partnership and what lies ahead.

The India–Australia strategic partnership has grown quite rapidly over the last few years. This is impressive considering how indifferent New Delhi and Canberra were towards each other a decade ago. The change in the tone and direction of the relationship over the past decade is driven by shared concerns about China’s rise and its strategic implications for the Asia Pacific order.

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Despite the number of high-level political visits and military exchanges, such as the 2+2 Dialogue, there still remains scepticism about the relationship. Many believe that the shared concerns of both countries have not yet translated into a shared policy approach. Frederic Grare raised this point in 2014, but six years later India and Australia remain unable to forge a coherent strategy or a common policy approach to China.

There has traditionally been some wariness among Australian security analysts about the India–Australia relationship, and vice-versa. But as the threat from China grows, New Delhi and Canberra should find more innovative ways to work together to shape a stable Asian strategic order. The two already work together in larger strategic formulations such as the Quadrilateral Security Dialogue (the Quad).

A new wrinkle in the relationship is the Modi government’s identity politics. Many argue that India’s recent internal developments go against the grain of its strategic partnerships — based on shared liberal democratic values.

Whether mutual concerns about China are serious enough to offset worries about the unhelpful direction of India’s internal politics and nurture the budding India–Australia strategic partnership remains to be seen.

Australian officials are very positive about the direction of relations. At the fourth Raisina Dialogue in January 2019, Australian Foreign Minister Marise Payne noted that as ‘competition intensifies, Australia and India have shared interests in ensuring the peaceful development of an open, inclusive and prosperous Indo‑Pacific region — a region in which the rights of all states are respected, large and small’.

The signing of a Framework for Security Cooperation between India and Australia in 2014 by Prime Ministers Narendra Modi and then-prime minister Tony Abbott still provides the much-needed impetus for greater security engagement between the two countries.

The two countries are currently finalising a mutual logistics support agreement, an information exchange agreement and a broader maritime agreement. These are expected to increase military interoperability and help ‘elevate’ the strategic partnership.

There remain areas that need greater clarity. One of the problems with the India–Australia relationship is that both countries have a different set of concerns about China. Australian concerns have to do with China’s increased activities in the Pacific, while India is concerned about China’s greater presence and influence in the Indian Ocean. India has also been uncertain about Australia’s reliance since Canberra backed out of the Quad in 2007, though this uncertainty is slowly disappearing. It is equally likely that Canberra has a certain lack of confidence given that New Delhi seems ambiguous about whether to balance or hedge. These differences might partly have to do with strategic histories. Australia has long been an American ally, while India remains uncomfortable about alliances.

This need not be an impediment to the strategic relationship if the two countries are able to forge their partnership based on some key principles, norms and ideals. Both countries should champion the rule of law, a rules-based order, respect for human rights and norms of responsible behaviour.

The joint naval exercise AUSINDEX (which began in 2015) reflects the convergence of Indian and Australian approaches to maritime and regional security. The two countries conducted the third edition of AUSINDEX in April 2019. The exercise was reported to have been the biggest in terms of the scale of participation from both navies.

The second issue with the relationship is the deficit of military capabilities, especially on the Indian side. While the two militaries have been able to showcase their prowess during exercises, their ability to come to each other’s aid during conflict remains in question. The joint logistics services agreement would go a long way in addressing this issue as it would provide joint access to each other’s military facilities.

Third, there is a need for greater agreement among the Quad member states about burden-sharing. A discussion about the operational aspects of their cooperation would create greater synergy between their forces when dealing with common problems.

From an Australian perspective, the fourth and final irritant in the relationship is India’s reluctance to involve Australia in the Malabar trilateral naval exercise alongside the other three Quad nations — India, Japan and the United States. Indian media reports indicate that India might be open to involving Australia at the next Malabar naval exercises scheduled to take place later in the summer.

Indian reluctance to involve Australia in the Malabar exercise has not produced significant negativity towards India, especially given the progress in bilateral relations more broadly. But if India thinks Australia is a legitimate security partner, it must expand the trilateral to include Australia as well. The fact that Australia is included in other bilateral and multinational military exercises should not be an excuse.

The India–Australia strategic partnership has seen impressive advancements in the last few years, but its potential and promise are yet to be fully realised. It will require dedicated attention and political leadership from both capitals to become more than a work in progress going forward.