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Mr. Modi’s agenda in Brazil
July 15, 2014, 5:46 am

During this week’s BRICS Summit in Brazil, India’s new Prime Minister Narendra Modi will push hard for an endorsement of the need to expand the United Nations Security Council (UNSC).

India hopes its long running quest for permanent, veto-wielding membership can benefit from BRICS support; the bloc includes two permanent UNSC members and three aspiring entrants.

While pressure from BRICS may have limited use, New Delhi’s UNSC prospects would be better served if Mr Modi can return India to a trajectory of robust economic and military growth.

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi hold talks in Fortaleza, Brazil on 14 July 2014 [Xinhua]

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi hold talks in Fortaleza, Brazil on 14 July 2014 [Xinhua]

An early indicator of the new Bharatiya Janata Party (BJP) government’s priorities came on July 10, when it presented its first annual financial budget.

While campaigning for the May 2014 election, the right-of-centre party had railed at border intrusions by China and Pakistan, growing vulnerability to “Pakistan-backed terror groups” and waves of illegal immigration from Bangladesh.

To counter this, the BJP declared it would modernize the military, a lip-smacking prospect for the global arms industry, given India’s status as the world’s biggest importer of defence equipment.

The BJP’s election manifesto also undertook to “revise and update” India’s nuclear doctrine, kicking off speculation that it might reconsider, even abandon, India’s policy of “No First Use” of nuclear weapons, or NFU.

The BJP quickly clarified that it was comfortable with NFU, yet apprehensions remained. The manifesto also promised a nuclear force geared towards “changing geostrategic realities”.

It remains unclear whether this referred to a larger nuclear arsenal, or the induction of tactical nuclear weapons in response to Pakistan’s apparent determination to deploy these destabilising and risky weapons.

India’s military spending

The budget disappointed many who had anticipated a wave of buying by India in the global arms bazaar.

Belying its pre-election rhetoric, the government allocated to defence Rupees 2,290 billion ($38.16 billion), Rupees 50 billion ($833 million) more than the outgoing government had provided in its interim budget in February.

By raising defence spending only cosmetically from 1.74 per cent to 1.78 per cent of GDP, Mr Modi has sent a powerful signal that social spending – healthcare, education and jobs – are as vital as national security.

Conspicuously, no additional funds were allocated for arms deals being negotiated, like the nearly $17 billion purchase of 126 Rafale fighters from French company Dassault.

Significantly, most of the tiny spending rise went to the Defence Research & Development Organisation (DRDO), the government agency that develops indigenous weapons systems for the military.

While the DRDO has several successes to its name – including India’s ballistic missile programme, nuclear powered ballistic missile submarines, and a range of radar and electronic warfare systems – it has also struggled to develop a light fighter jet and a main battle tank, both of which have badly overshot budgets and timelines.

Part of the blame lies with the military, which has denied the DRDO funding and cooperation. If, as it appears, the government has thrown its weight behind the DRDO, India could well start producing a larger share of its weaponry within the country.

This would create jobs, a priority for Mr Modi, causing him to extend further support to this initiative.

That the new government regards defence manufacture as a vehicle for job creation, rather than as a firewalled security zone, is also evident from the decision to permit 49 per cent foreign ownership of Indian companies involved in defence production.

The earlier foreign ownership cap of 26 per cent had deterred foreign investment in Indian defence companies, since overseas investors felt that such restrictions provided little control over the companies they were buying into.

Although the increased limit is short of the 100 per cent ownership that foreign vendors were demanding, it has been welcomed as a step forward.

India is the world’s only significant power that is adding soldiers – its 1.5-million strong military is set to rise to 1.6 million this decade [Getty Images]

India is the world’s only significant power that is adding soldiers – its 1.5-million strong military is set to rise to 1.6 million this decade [Getty Images]

Yet, these policy framework improvements will serve little purpose without harmonising the military’s force structure.

Flawed military management?

Paying for the army’s bloated manpower leaves little for buying equipment. True, defending thousands of kilometres of Himalayan mountain border does require a large numbers of troops. Even so, India is the world’s only significant power that is adding soldiers – its 1.5-million strong military is set to rise to 1.6 million this decade.

This increase comes even as threats are diminishing, with a key potential adversary, China’s People’s Liberation Army (PLA), having incrementally reduced its size by 1.7 million soldiers since 1985.

Currently, the army’s payroll accounts for half its annual budget, consuming thrice as much as the purchase of new equipment.

This obvious conundrum escapes attention because the higher management of defence remains deeply flawed. This is partly a legacy of British rule, when India’s military and police forces were instruments of colonial control; and of the political climate of the 1950s when numerous post-colonial, elected leaders were being overthrown by praetorian militaries.

While India’s military has remained conspicuously apolitical and is repeatedly polled as the country’s most respected institution, it remains confined in its corner with little political interest in its functioning.

The previous defence minister, AK Antony, spent more time troubleshooting for the ruling Congress Party; while the new minister, Arun Jaitley, who is also the finance minister, says he is a temporary incumbent.

With tri-service planning desperately needed, successive governments have been reluctant to appoint a tri-service commander, fearing that this would create an undesirable power centre. In the absence of joint planning, the army, navy and air force function at loggerheads, undercutting each other in a vicious contest for budgets, influence and turf.

Despite the military’s obvious shortcomings, India enjoys significant regard as an unusually benign power in a region where a rising China pays scant heed to smaller countries’ sensitivities. Over the preceding two decades, New Delhi has assiduously pursued “multi-alignment”, cultivating strong relations with every regional and global power.

Mr Modi has inherited this equity, but knows that he must back this with discernible muscle, both economic and military. It is this aim that will be guiding his conversations with his counterparts in Fortaleza and Brasilia.


The views expressed in this article are the author's own and do not necessarily reflect the publisher's editorial policy.