By K.S. Anthony on 11 July, 2017

India's New Drone Deals Point To A Lucrative Arms Market

Indian Prime Minister Narendra Modi's recent visits to the United States and Israel have brought attention to the country's new, simplified Goods and Services Tax that aims to make India more appealing to foreign investors, but there's more to his tour than just photo-ops and economic discussion. Sources say that India has secured deals to purchase armed drones from both countries in what appears to be a sudden surge in defense spending that points to their ongoing power struggle with China and the need to fully modernize their military despite shrinking procurement funds.

The Washington Post reported last month that the Trump administration approved the sale of 22 unarmed Guardian MQ-9B maritime surveillance drones to India in a deal said to be worth approximately $2 billion. Guardian manufacturer General Atomics Aeronautical Systems CEO Linden Blue praised the deal in a statement saying “We are pleased that the U.S. government has cleared the way for the sale of the MQ-9B Guardian to the Indian government,” and adding that the Predator-variant drones would "significantly enhance India’s sovereign maritime domain awareness in the Indo-Pacific." Dr. Vivek LallCEO of U.S. & International Strategic Development at General Atomics, noted that the deal alludes to a growing defense partnership between the U.S. and India. "Given the Sea Guardian's capabilities," Lall said, "such a response to the Indian Navy's request demonstrates a major change in US policy as this type of aircraft capability is only exported to a very select few of America's closest defence partners." Lall, who as Vice President and Country Head for Boeing Defense Space & Security closed a $2.1 billion deal for 8 Boeing P-81 reconnaissance aircraft that went to India's navy in 2009, is widely believed to have been pivotal in securing White House approval for the sale, which he called part of a "path forward for a game-changer in US-India defence relations." According to India Today, the U.S. accounted for 14% of India's arms imports between 2012 and 2016, making it the second largest source of arms, but still well behind Russia's 68%. 

But American aerospace and defense companies are not the only ones who stand to gain from India's defense contracts. Haaretz reports that 2017 could be a record-breaking year for Israeli arms sales to India with sales that include 8000 anti-tank missiles and 10 armed Heron TP drones, respectively valued at $500 and $400 million. 

Large scale defense maritime and air defense isn't India's only concern. The country is currently seeking to replace 185,000 assault rifles. Despite Modi's "Make in India" campaign, two potential Indian-made candidates have already failed to meet muster due to reliability, manufacturing, and utility issues and 21 manufacturers have entered bids for the contract. The country is also seeking to equip its soldiers with lightweight helmets and body armor. 

India's continuing reliance on imports for its defense could mean big business for arms manufacturers both large and small. In an interview with Bloomberg, former infantry officer Srinath Raghavan, now a fellow at New Delhi’s Centre for Policy Research, criticized India's inability to keep its defense systems in-house. "The fact that you can’t even design your own small arms system reflects very poorly on the military ecosystem in India," he said. "The military innovation cycle is dysfunctional and broken down and it should be a matter of huge concern."

Topics: China, US-India Trade, India, Defense, Intelligence, Aerospace & Defence, israel

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