chapter  5
17 Pages

Indian conventional naval capabilities

The Indian Navy, like all of the Indian armed services, has suffered from resource shortfalls since independence. The government allocated new resources to the armed services following the disastrous 1962 border war with China. At the same time, the government began to conduct systematic defense planning – to an extent. Five­year defense plans were drawn up for each of the armed services. Until 1997, however, every such plan was deferred or restructured before it was completed, owing largely to resource constraints. In 1964, a base force for the Indian Navy was established, with a force goal of 54 principal combatants. The navy has never reached this goal, again owing to resource shortfalls.1 The reasons for this strategy-policy mismatch are three. First, as Rahul Roy­Chaudhury notes in the second of his studies of Indian maritime issues, five­year plans typically amounted to wish lists compiled by the services, divorced from broader national security goals. Second, the framers of these plans paid little heed to resource limi­ tations. And even if the services’ plans had been realistic, the assorted shortfalls

and crises that plagued the Indian economy throughout the 1960s, 1970s, and 1980s would have rendered them moot. The third reason for the mismatch between maritime strategic objectives and the navy’s budget was its standing among the armed services. From indepen­ dence forward, the Indian Navy has been the least well­funded of the three services, or the “Cinderella Service,” as Adm. Arun Prakash puts it ruefully.2 As discussed before, India has traditionally seen itself as a continental power. Accordingly, New Delhi has regarded overland threats – China and Pakistan – as the primary threats to the subcontinent. Each of the other two services, conse­ quently, has routinely received more than double the budget share allocated to the navy. The navy budget was augmented from time to time in the years before 1998. But the increases were generally small by comparison with concurrent increases in the other services’ budgets, and they rarely lasted long enough for the navy to reach its goals in terms of numbers, types, and sophistication of its platforms. Worse still, the navy must compete not just with its sister services, but also with the Defense Research and Development Organization, the Depart­ ment of Atomic Energy, and the other government agencies that support India’s now­overt nuclear weapons capabilities. After the oil shock of 1991 brought on by Iraq’s invasion of Kuwait and the subsequent UN oil embargo against Iraq, the economic base on which government, and ultimately defense, budgets rely began to recover, surging to unprecedented levels. The rate of GDP growth considered normal for India during the first three decades after independence – approximately 1.25 percent per year – increased sixfold, to an average of 7.5 percent annually. Growth rates approached 10 percent at times.3 This turnabout resulted from a series of economic reforms begun in the mid­1980s, many of which are still being put into practice. The rising economic tide lifted all boats in the area of defense spending, furnishing enough money that New Delhi could temporarily set aside the traditional guns­versus­butter debate and interservice feuding over defense funds. The electoral importance of non­defense domestic spending remained, however, as the ruling Bharatiya Janata Party (BJP) discovered in 2004, when it lost the national poll after running on the campaign slogan “India Shining.” The shining Indian economy evidently shed too little light on too few ordinary Indians, and the BJP was demoted to opposition status. To some degree, its fate recalled the defeat of the Janata Party in 1980, in what Indira Gandhi labeled the “Onion Election.” In 1998, the BJP again lost out in state elections over the price of onions and other basic commodities. The Indian government has set a goal of annual growth rates of 10 percent by the year 2011. Outside economic organizations believe that this target is achievable and sustainable if fundamental economic reforms continue.4 If so, the navy’s annual budget battle should ease, bringing its operational and force­structure goals within view. Encouraged by brisk economic growth and alarmed by political­military events such as the 1998 nuclear tests, the 1999 Kargil crisis, and the 2001 terror­ ist attack on the Indian parliament, Indian governments have channeled new resources into defense. Indian defense spending is distributed across a number of

categories and ministries. Spending figures thus vary significantly depending on which areas are included in the totals. Published annually by the Ministry of Defense, the defense budget covers the Department of Defense Procurement and Supplies, the Defense Research and Development Organization, and the three armed services’ procurement and operating budgets.5 Pensions consume a sig­ nificant portion of defense spending, but they dropped from 16.3 percent of the total in 2001 to 12.8 percent in 2008. The overall budget has climbed more quickly than pension obligations – leaving the Indian military in an enviable position.6 In addition, the Department of Atomic Energy and the Department of Space commit part of their budgets to defense, including India’s nuclear weapons and ballistic missile programs. Finally, the civil­defense budget funds India’s sizable paramilitary forces. For the purposes of this book, the defense budgets analyzed include only those accounts under the Ministry of Defense. Defense spending reported by the Ministry of Defense rose from 47,070.63 crore rupees (1 crore equals ten million) in 1999-2000 to an estimated 105,600 crore rupees for the year 2008-2009. This represents approximately 5 percent annual growth over a nine­year period. (The Indian fiscal year begins on April 1, so budget years and calendar years do not correspond.) Outside defense analysts estimated budget increases at around 10 percent per annum for 2005-2008. They have predicted similar growth for the ensuing three to four years as the armed forces, particularly the navy and air force, undergo significant recapitalization.7 For the sake of comparison, New Delhi’s 2008-2009 defense budget was esti­ mated at $27.47 billion, lifting India to eleventh in defense spending worldwide, just ahead of Italy but behind South Korea.8 This sum is not as generous as it might seem. Consider: the US Navy’s DDG­1000 Zumwalt­class destroyer is expected to cost roughly $2.6 billion apiece, not counting research and devel­ opment costs, while US­built F­16 multirole fighter aircraft cost from $35-80 million each, depending on the model. The United Arab Emirates purchased a package of 80 F­16s from the United States, complete with spares, support, and training, for a reported total cost of $8 billion. As discussed in detail below, India does not intend to rely entirely on imports, let alone imports from the United States, for most of its modernization plans. Comparing India’s total annual defense budget against the cost of the most modern and capable weaponry available nonetheless provides some idea of the challenges facing not just India, but any nation­state that wants to modernize a sizable armed force. The overall budget numbers reported above cover procure­ ment, operations and maintenance, and pensions. Notably, however, the armed forces have managed to steadily raise the percentage of the budget devoted to procurement as budgets have grown. In the early 1990s, the Indian defense budget allocated approximately 25 percent to procurement. In 2004-2005, 32.3 percent went to procurement, and by 2008-2009, procurement accounted for roughly one­third of the budget, suggesting an additional uptick over previous figures.9