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India Surpasses Saudi Arabia and Russia to become Fourth Largest Defence Spender

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According to the 2016 Jane’s Defence Budgets Report, released by research firm IHS Markit on December 12, 2016, India has become the fourth largest defence spender in the world, after US, China, and the UK.

  • India, which is Asia’s third-largest economy spent $50.6 billion in 2016, from previous $46.6 billion in 2015.
  • The US, China, and the UK remained the top three defence spenders respectively.India was followed by Saudi Arabia and Russia at fifth and sixth positions respectively. Russia, which was at the fourth place in 2015, slipped to the sixth spot in 2016.

List of Top 5 Defence Spenders Globally

Rank Country Total Spending
1 US 622.03 Billion
2 CHINA 191.75 Billion
3 UK 53.81 Billion
4 INDIA 50.67 Billion
5 SAUDI ARABIA 48.68 Billion

Key Points of the report

The total global defence spending in the year 2016, increased to $1.57 trillion. The report stated that the United States topped the list with its expenditure representing about 40 per cent of the total Global Defence budget.

  • Of the total defence spending in US, about 45 per cent of investment funding will go toward procurement and modification of aircraft, ship, submarine and military ground vehicle platforms.
  • The report revealed that India spent about Rs. 36,900 crore ($5.57 billion) to purchase arms, ammunition, and related goods from abroad in 2014, after the coming of Narendra Modi Government into power.
  • Modi government has been continuously looking at increasing the share of domestic manufacturing in defence goods. India also signed around Rs. 58,000 crore (€7.8-billion) deal to buy 36 Rafale fighter jets from France earlier in 2016.
  • According to the report, India spends about 1.8% of its GDP on defence, and 36% of it was spent on capital acquisition.
  • The global defence spending of India rose by 1 per cent to Rs 108 lakh crore ($1.6 trillion) in 2016 from the previous 0.6 per cent increase in 2015.
  • The report showed that the Indian Government Raised Foreign Direct Investment limit for defence sector to 49%, that enabled Indian private players partner with global defence firms.Defence Report

The report estimated that India will need to spend about $130 billion over the next seven years, to modernise its military. The report says that by 2018 India will become the third-largest in the group, surpassing the UK.

About Jane’s Defence Budgets Report

The report makes five-year forecasts covering 98 percent of the world’s defence budgets based on trend analysis and the ability to compare multiple budgets at once.

  • The report helps to understand military and security capability, business opportunities and market analysis.
  • Based on the report, it becomes easier to: Identify resource investments, understand emerging trends in military capabilities, base decisions on up-to-date defence spending data, minimize research time and effort and enhance reporting with data tables, charts and spreadsheets

Defence deals of India :

Deal with Russia

  • In October 2016, India signed two Inter-Governmental Agreements (IGA) with Russia to buy five S-400 Triumf air defence systems worth Rs. 39,000 crore and four stealth frigates costing about USD 3 billion.
  • ii.India and Russia also agreed a joint venture to manufacture Kamov-226T helicopters in India worth over USD one billion.

Deal with US

  • In December 2016, India inked a deal with US worth Rs. 5,000 crore deal for buying 145 M777 ultra-light howitzers, which would be mostly deployed near the borders with China.

Deal with France

  • Earlier in 2016, India signed around Rs. 58,000 crore (€7.8-billion) deal to buy 36 Rafale fighter jets from France.