Russia losses share in Indian arms market, But US is not a gainer

Israel & France have gained

IDD Perspective

Russia continues to be the biggest supplier of weapons and equipment to India even though its share for a five year period 2015-2019 has dropped ‘sharply’ when compared with the previous five year block – 2010-2014. Contrary to perception, the share of US companies in the India military-equipment market  has not grown, in face of slowing down Russian sales.

New Delhi has an annual spend of some $ 10 billion on new equipment , weapons and platforms.

Sweden-based think-tank Stockholm International Peace Research Institute (SIPRI) in its report ‘Trends in International Arms Transfers-2019’ has done an assessment for a five-year period (2015-2019). It says the biggest gainers, of the Russian decline,  in the Indian market are Israel  and France. Read the SIPRI report here.

 “Arms imports from Israel and France increased, by 175 and 715 per cent, respectively, making them the second- and third-largest suppliers of major arms to India in 2015–19”.

SIPRI report on International Arms Transfer

India is buying 36 Rafale jets from France for almost $ 8 billion while ties India-Israel ties include making of Long Range Surface to Air Missiles (LRSAM’s) and loitering UAV like the Harop.

India is second largest importer, Russis biggest   supplier

India remained the second largest after Saudi Arabia and accounted for 9.2 percent of all global sales during the period. India had accounted for 14 percent of global share during the period 2010-2014.

Russia, remained the largest supplier to India and had a 56 percent share of the market while Israel ( 14 %)  and France (13 %) are the top three suppliers for the period 2015-19. Russia’s share dropped by 16 percent.

Russia was the largest supplier to India in the two separate five-year blocks 2010–14 and 2015–19, however,  its share dropped from 72 percent to 56 percent, respectively. Russian share will go up as India has ordered the S-400  air defence missile systems for $ 5 billion and is on the verge of closing deal on making the Kamov 226 T helicopters in India. Another two frigates of the Grigorovich class are being made in Russia and the two countries are in talks to allow India to lease another another nuclear submarine of the Akula class.  

In this period even the share of the US fell back. The US became the second-largest arms supplier to India in 2010–14 as the security relationship between the two countries developed into a strategic partnership.

“In 2015–19 India continued with its policy of supplier diversification, and imports of arms from the USA were 51 per cent lower than in 2010–14.”

SIPRI report
India ‘s $ 10 billion annual spend on new wepaons. Source data from Lok Sabha, Indian parliament

US slowed in India but will revive

A string of developments in the recent past indicate that US will bounce back in terms of working with India. Since 2008 US has supplied equipment worth $ 19 billion to India. On Feb 24, the  US agreed to supply to India two types of helicopters costing more some $ 3 billion ( Rs 21,000 crore). These will Include 24 of the marine helicopters MH-60R, made by Lockheed Martin and six Apache AH 64E made by Boeing. India has already ordered 22 Apache AH 64E.

US President Donald Trump on visit ( feb 24-25) to India  said “Defence ties are important for the ( US-India) relationship”.

Earlier in November the US State Department cleared the sale of sophisticated naval guns , the Mk-45 produced by BAE systems worth $1 billion for the Indian Navy. Separately, India has okayed the procurement of six more Boeing P8I maritime surveillance aircraft to widen the arc of operations of its Navy. India operates eight such planes, four more are on order and six are in addition to the existing orders.

Also the US has approved a possible sale to India for what is called the Integrated Air Defense Weapon System (IADWS). It would cost $1.867 billion ( Rs 13500 crore). Also US companies are doing major Make in India projects. Boeing and Lockheed Martin, the two aviation majors sources millions of dollars worth of goods from India for their respective global supply chains.

India as an exporter

India remains the second largest importer of weapons, it has, however, clawed its way up to become a  minor exporter and is 23rd on the global list of exporters. Myanmar, Sri Lanka and Mauritius being its top three clients. During the period April 2018 to March 31, 2019, India exported 1.4 billion worth of equipment and has 0.2 percent share in global exports. New Delhi aims to have a $ 5 billion export by 2025.

The ten largest exporters are United States, 36% Russia, 21% France, 7.9% Germany, 5.8% China, 5.5% United Kingdom, 3.7% Spain, 3.1% Israel, 3.0% Italy, 2.1% South Korea, 2.1% Others, 9.6% Figure 2. Global share of major arms exports by the 10 largest exporters, 2015–19.

INS Kochi testing a new Israel origin missile in 2019. Pic India Navy twitter handle

Globally US is widening gap with Russia

The USA was the top arms exporter in 2015–19 and delivered major arms to 96 states. This is a far higher number of destinations for arms exports than any other supplier. US arms exports grew by 23  per cent between 2010–14 and 2015–19 and the USA’s share of total global arms exports rose from 31  per cent to 36 per cent.

“The gap in total arms exports between the USA and Russia— the second-largest exporter—has grown rapidly”.

SIPRI report

In 2010–14 US exports of major arms were 17 per cent higher than those of Russia, whereas in 2015–19 they were 76 per cent higher. Russian arms exports worldwide accounted for 21  per cent of total arms exports.

A screen shot of top exporters. source SIPRI report

For the US, arms exports to Asia and Oceania accounted for 30 per cent of its total exports in 2015–19. US arms exports to the region were down by 20 per cent on 2010–14 as a result of decreases in arms exports to India (–51 per cent), Pakistan (–92 per cent), Singapore (–60 per cent), South Korea (–34 per cent) and Taiwan (–38 per cent). These decreases were partly offset by increases in US arms exports to Australia, which rose by 41  per cent (making Australia the second-largest importer of US arms in 2015–19), and to Japan, which rose by 85 per cent. in 2015–19 but were 18 per cent lower than in 2010–14. 

India remained the main recipient of Russian arms in 2015–19, accounting for 25 per cent of the total Russian exports. In 2015–19 Russia delivered major arms to 47 states. A total of 55 per cent of its arms exports went to its three main recipients: India, China and Algeria

In 2015–19 Egypt and Iraq were the main recipients of Russian arms exports to the Middle East, accounting, respectively, for 49 and 29 per cent of Russian arms exports to the region. Deliveries to Iraq were up by 212 per cent on 2010–14, while those to Egypt were up by 191 per cent. Although Russian forces have been supporting the Syrian Government in the conflict in Syria since 2015, Russian arms deliveries to Syria fell by 87 per cent between 2010–14 and 2015–19.

The Middle East accounted for 51 per cent of total US arms exports in 2015–19. US arms exports to the region increased by 79  per cent between 2010–14 and 2015–19. Saudi Arabia was the largest recipient of US arms in 2015–19 and accounted for 25 per cent of US arms exports, compared with 7.4 per cent in 2010–14.  

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