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Defence imports to touch $35 bn by 2026

Antony urges greater private and foreign participation in the country's defence production industry.

india Updated: Jan 07, 2007 22:34 IST

With India's military imports expected to rise to a staggering $35 billion (Rs1.5 trillion) in the next two decades, this would indirectly impact on the country's foreign policy, Defence Minister AK Antony saidin New Delhi onSunday.

Speaking at an interactive session at the Pravasi Bharatiya Divas, Antony also envisaged India becoming a "significant" maritime power, even as he urged greater private and foreign participation in the country's defence production industry.

Noting that at the current level of $9 billion, the armed forces "are heavily dependant on imports to meet (their) requirements", Antony added: "It is estimated that by the year 2025-26, the Indian budget for acquisitions at 2005-06 price levels may even touch $35 billion."

Thus, "defence cooperation (with other countries) has assumed importance in devising a strategy for (our) foreign policy," he maintained.

"Another key foreign policy related issue is security of shipping and sea lanes," the minister said, pointing out that India's remote islands are a bare 80 km from Indonesia, while the western ports are just across the Arabian Sea from the oil producing countries of the Gulf.

"The Indian Ocean's littoral extends from South Africa to Australia. The Indian Ocean is home to the busiest sea lanes, with an estimated $1,800 billion of merchandise trade passing through the region.

"Thus, India has the potential and the capability to be a significant maritime player. I would even venture to say that the Indian Ocean could, in fact, be India's 'New Silk Route,'" Antony said.

His statement comes two days after he declared that the Indian Navy would be provided the "best" in terms of ships, aircraft, weapons and other equipment to enable it play an effective role in the Indian Ocean.

"The government is committed to providing the navy with full capabilities that range from sea control, to sea denial and low intensity maritime operations and humanitarian missions, while ensuring long range sustainability," he had stated Friday after the navy had showcased its might at a special display for the defence minister.

Speaking about the defence manufacturing sector, Antony pointed out that this had been opened up to 100 per cent private equity and foreign direct investment of up to 26 per cent.

"We are certain that with more private sector interest in defence production, entry into fresh markets, access into fresh markets, access to modern technologies, managerial expertise and marketing techniques will be available," he added.

Responding to a question on whether he envisaged greater cooperation with American defence firms in the wake of the just-concluded India-US civilian nuclear deal, Antony said this was an issue he did not deal with directly.

"We have a procurement policy that encourages a multi-vendor system. We will invite proposals through global tenders within the parameters of the procurement policy of the government of India," he said.

First Published: Jan 07, 2007 22:34 IST