India Likely to Hike Defense Budget; Pakistan Worried

By Suryamurthy Ramachandran | July 7, 2008 | 8:08 PM EDT

New Delhi ( - India on Monday indicated it could hike its defense budget to about 3 percent of the gross domestic product while reiterating to maintain minimum credible nuclear deterrent, even as nuclear-rival Pakistan expressed concerns about an arms deal between New Delhi and Moscow worth over $4 billion.

Indian defense minister George Fernandes said the defense budget could be increased to 3 percent of the gross domestic product by next year.

"Hopefully we will have 3 percent of GDP as the defense budget by the next budget or the one after that," Fernandes told reporters.

In February, India raised its defense budget by a record 28.2 percent to $13.5 billion for the fiscal year ending March 2001.

The increase meant defense spending rose to 2.5 percent of GDP from 2.3 percent, where it had stagnated for over a decade.

The proposed hike in defense spending would bring it back to the level of the late 1980s and a plea to this effect has been made by General S. Padmanabhan, the new Army chief, and other services' top brass.

"Many changes are taking place in our neighborhood which will affect future power balance. These changes naturally raise many questions," Fernandes said, adding the country had to consider the implications of Chinese modernization.

Strategic planners also had to consider how long Pakistan's present isolation would continue, he said, and keep track of technological inflow into the region.

On the arms deal with Russia, Fernandes said these would help India increase the indigenous production of armaments and enhance its military preparedness.

Pakistan, in its first official reaction, said the arms deal would have a "destabilizing" effect on the South Asian region.

"It is natural for us to feel concerned over the prospect of induction of massive quantities of new arms and equipment recently contracted for purchase by India from Russia, which will be destabilizing for the region," said Foreign Office spokesman Riaz Mohammad Khan.

"This does not augur well for promoting a security environment of peace, stability and confidence," he said.

Three deals were signed during Russian president Vladimir Putin's visit to India - for the licensed production in India of 140 Sukhoi SU-30MKI fighters, the purchase of 310 T-90 battle tanks, and the acquisition of the Russian aircraft carrier "Admiral Gorchkov."

The two sides also signed a new "strategic partnership" aimed at reviving ties in the 21st century between the two former Cold War allies.

Indian defense analyst Admiral J. G. Nadkarni said the deal is a good tonic for the armed forces after the starvation diet of the early 1990s, while laying bare harsh facts.

"The arms deal confirms the growing arms race in the subcontinent as a reality.
Secondly, it perpetuates our continuing dependence on Russia for arms supplies. Finally, it, once and for all, exposes the futility of our drive for self-reliance," he said.

Pakistan and India have fought three wars since their independence in 1947 over the issue of Kashmir. The two neighbors carried out nuclear tests in May 1998 resulting in international criticism and economic sanctions.

Fernandes on Monday reiterated that New Delhi would maintain a "credible nuclear deterrent" as long as weapons of mass destruction remain a threat to India's security.

"Ensuring peace is an important goal of our military power. This can be achieved primarily by ensuring credible deterrent capabilities -- both nuclear as well as conventional, in today's global environment," said Fernandes.

"Deterrence to be effective must aim to raise the costs of aggression to levels that would dissuade the aggressor from attempting aggression," he added.

"All the previous wars were imposed on us and proved that surprise is always possible by the aggressor," he said.

"First, the type of war that maybe imposed on us again will be limited in scope and aim. The nuclear hang will be an important factor in such wars," Fernandes added.

Alarmed at the prospect of a nuclear arms race on the subcontinent, the United States cut off military aid to New Delhi and Islamabad and urged the two countries to sign the Comprehensive Test Ban Treaty.

New Delhi maintains that the treaty is discriminatory and lacked a time-bound frame for disarmament. Indian Prime Minister Atal Behari Vajpayee, has, however, assured that New Delhi would sign the treaty after evolving consensus among political parties.

However, India reaffirmed that, subject to its national interests, it would continue its voluntary moratorium on fresh nuclear tests until the CTBT took effect.