India's defence imports to reach $30 bn by 2012
India's import of military hardware and software will reach $30 bn within the next 5 years as its armed forces lap up major defence deals.business Updated: May 13, 2007 16:03 IST
India's import of military hardware and software is all set to reach $30 billion within the next five years as its armed forces lap up major defence deals, said a leading industry body.
India's defence imports would also be propelled as it signs up big deals to acquire multi-role fighter jets, a variety of copters and long-range maritime spy aircraft, according to study - Avenues for Private Sector Participation in Defence - done by the Associated Chambers of Commerce and Industry (Assocham).
"Indian military budget was about $20 billion in the last fiscal (2006-07) and is expected to grow seven per cent annually over the next five years," Assocham President Venugopal N Dhoot, said in a statement.
"The country's military spending amounts to roughly two percent of GDP (gross domestic product), which is without accounting for expenditure on defence pensions, paramilitary forces and defence ministry itself as part of budgeted defence expenditure," Dhoot added.
The industry body has also recommended for private sector participation in all defence related deals and imports.
"Defence ministry's targets of achieving 70 percent self reliance in defence production 10 years ago has fallen short of the target by 40 percent, as only 30 percent defence production has become self reliant till now," Assocham said.
"The year 2001 witnessed the first step in this regard as the entry of foreign private players was permitted with 26 percent FDI being allowed in the sector," it added.
The study has also recommended outsourcing for many defence activities to the domestic private sector, pointing out that the defence ministry in recent years had made some attempts towards outsourcing and private procurement to bring in greater efficiency and optimal utilisation of available budgets.
First Published: May 13, 2007 16:00 IST