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June 28, 2014

Indian Defense Market Might Be About to Really Heat Up

A number of conditions are accumulating that could turn India — already the world’s leading importer of arms — into an even bigger hotbed of defense spending and investment.

The Wall Street Journal has the story on a proposal that would allow foreign companies to have full ownership over defense firms. That’s up from a 26 percent cap, which analysts have said has been an impediment to foreign investment.

The new defense minister? He’s expected to devote more money to weapons. On the campaign trail, new Prime Minister Narendra Modi promised “long-overdue military modernization.”

The Ministry of Commerce has relaxed norms on defense licensing, a move the Federation of Indian Chambers of Commerce and Industry believes will revive the Indian defense industry.

And the United States could be well-positioned to capitalize on this. Vikram J. Singh, vice president for national security and international policy at the Center for American Progress, and Joshua T. White. deputy director for South Asia at the Stimson Center, recently made the argument that, “Actions taken in New Delhi and Washington now will determine if the two nations can break through a successful but largely transactional relationship toward strategic partnership that delivers for both nations on shared security interests.”

There are impediments to some of the growth potential, given the history of India’s military revitalization efforts, but right now there are plenty of signs pointing to flowing money and structural overhauls being very realistic possibilities.

- Defence news

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