In arms way: India's 'hollow' army to buy in bulk

As a recently-leaked letter scandal reveals the Indian army, one of the biggest in the world, is virtually “naked”, foreign weapons producers cast longing looks at the country’s never-shrinking military budget: over $100 billion to be spent by 2020.

­India's entire tank fleet is out of ammunition, air defenses are "97 per cent obsolete" and the elite forces are "woefully short" of "essential weapons," reads a leaked letter Army Chief Vijay Kumar Singh sent to Prime Minister Manmohan Singh in March.

"The state of the major (fighting) arms i.e. mechanized forces, artillery, air defense, infantry and special forces, as well as the engineers and signals, is indeed alarming," adds Singh, as quoted by the DNA newspaper.

The "hollowness" of the fourth-largest army in the world, according to the general, lies with the slow procurement process and lack of urgency among bureaucrats.

Heavy corruption remains a major plague for India. In March alone, six arms companies were barred by the Defense Ministry for 10 years for alleged graft, all in the case involving a former director general of Ordnance Factories. The sanctioned companies include producers from Israel, Switzerland, Singapore, Russia and two local facilities.

All the factors combined, first, signal prospects for huge military contracts to follow, as the Defense Minister A.K. Antony, lashed by the uproar in the parliament, has vowed to “speed up the modernization of the armed forces” and ensure defense capabilities of the country. Then, international arms producers can line up for meaty contracts, for the market is to see a further reshuffle among arms suppliers.

India, with its 1.13-million-strong military staff, has announced this month the government has announced a 17 per cent rise in defense spending for 2012-2013, up to $40 billion. Given the tendency, Delhi is likely to spend over $137 billion on foreign contracts between 2013 and 2022, forecasts the Wall Street Journal website.

India has already overtaken China as the world’s largest military hardware importer: the latest estimates show it accounts for 10 per cent of global market sales.

This is creating opportunities for US and European manufacturers – as well as for Russia, India’s long-standing military supplier. After the arms exhibition in Delhi, Moscow stated it is capable of delivering some $3 billion in arms to India each year.

The current stock of contracts between the two countries already exceeds $10.8 billion, including orders for long and medium range missiles, warships and helicopters.