Ordnance Factories constitute a major segment of India’s defence industrial set- up, whose other constituents are the Defence Public Sector Undertakings (DPSUs), the Defence Research and Development Organisation (DRDO) and varied Service-specific workshops, repair and maintenance establishments. The gross production of ordnance factories during the year 2005-06 was Rs. 8811.59 crores. Total sales including issues to armed forces and other agencies and civil trade in the same year was Rs. 6891.68 crores. This constitutes approximately 40 per cent of domestic supplies to the armed forces.

• N. Neihsial
• July 17, 2008
• IDSA Comments

In early May 2008 Tata Group of India and Israel Aerospace Industries Ltd (IAI) signed an agreement to establish a joint venture (JV) in India to develop, produce and support defence products such as missiles, unmanned aerial vehicles (UAVs), radars, electronic warfare (EW) systems and homeland security (HLS) systems. The agreement is in sync with Tata’s broader objective of becoming a “lead system integrator” in the Indian private sector, by consolidating its own resources, diversifying into various fields of production and forging partnerships with major global defence companies.

• Laxman Kumar Behera
• June 17, 2008
• IDSA Comments

Recent announcements of major arms acquisition programmes by the Indian government must have given a sense of elation to the armed forces, which have been waiting for long for some of this equipment. These announcements also give greater confidence to the nation about the military’s capability to tackle national security challenges. But there are other long term implications of arms procurement largely through import.

• N. Neihsial
• June 03, 2008
• IDSA Comments

The practice of converting defence plans into publicly known defence budget is essentially a practice of democratic governments. One reason for public disclosure of defence spending could be that tax payers expect to know directly or through their representative how much is being spent on national defence and on other sectors of economy which affects their security and welfare. Disclosing the defence budget even to the domestic audience was rarely done in the past. In fact, even today, some major powers do not disclose their defence spending to the world.

• N. Neihsial
• May 30, 2008
• IDSA Comments

Union Budget 2008-09 has allocated Rs. 105,600 crores for India’s Defence. Crossing the one lakh barrier for the first time, and accounting for nearly 14.1 per cent of total central government expenditure, the Defence Budget looks quite impressive (see Box). But when seen in the context of India’s expanding interests, this allocation remains as moderate as ever. Moreover, an in-depth analysis reveals problems in defence and budgetary management, none of which show signs of abating.

• Laxman Kumar Behera
• March 19, 2008
• IDSA Comments

“It’s about time that the bureaucrats in the MOD and the military leadership in the Service Headquarters opted not only to do ‘the right things’ but also to do ‘the things right’ in as far as the procurement process is concerned.”
- Defence & Technology, July/August 2007, p. 13.

• N. Neihsial
• January 25, 2008
• IDSA Comments

India opened up its defence industry to the private sector in May 2001, in a move to enhance the country’s ‘defence preparedness’. To give further impetus to this policy, the Ministry of Defence (MoD) came out with new policy measure related to the concepts of private Industry Leaders [or Raksha Udyog Ratnas (RURs)] “Make” procedure, and defence offsets, in its 2006 Defence Procurement Procedure (DPP). With these policy initiatives, the government’s focus seems to have shifted towards the private sector as far as achieving its long-cherished goal of ‘self-reliance’ is concerned.

• Laxman Kumar Behera
• January 08, 2008
• IDSA Comments

The Global War on Terror (GWOT), now into its sixth year, has become one of the most expensive wars in American history. GWOT covers three military operations: Operation Enduring Freedom (OEF), which broadly covers Afghanistan but ranges from the Philippines to Djibouti; Operation Noble Eagle (ONE), which is meant to provide better security for US military bases and enhanced homeland security; and Operation Iraqi Freedom (OIF) which began with the build-up of troops for the 2003 invasion of Iraq. The cost of these operations has phenomenally increased over the years.

• Laxman Kumar Behera
• January 01, 2008
• IDSA Comments

The latest Comptroller and Auditor General (C&AG) Performance Report on Defence Services (No. 4 of 2007) has once again exposed the problems involved in Indian defence acquisition. The report has been critical virtually of all the processes of the acquisition cycle, from planning to the formulation of Qualitative Requirements (QRs), vendor selection, conduct of trial and evaluations and processes of induction.

• Laxman Kumar Behera
• August 03, 2007
• IDSA Comments

The Ministry of Defence (Finance) organised a day-long seminar on March 24, 2007 on Outsourcing Possibilities in Defence. The seminar brought together a variety of perspectives – of the Services, the Ministry of Defence, industry, academia and think tanks. The March 24 event was a follow-up to the first-of-its-kind International Seminar on Defence Finance and Economics held in November 2006. Its importance lies in the fact that not long ago ‘defence’ was considered a ‘strategic’ affair and thereby excluded from public scrutiny and economic analysis.

• Laxman Kumar Behera
• April 11, 2007
• IDSA Comments

On February 28, 2007, Finance Minister P. Chidambaram presented the Union Budget for the fiscal Year 2007-08 (April 1, 2007 - March 31, 2008). Out of a total budgeted expenditure of Rs. 6,80,521 crore, Rs. 96,000 crore was earmarked for national Defence, which includes allocations to the three Services - Army, Navy and Air Force - Defence Ordnance Factories, and the Defence Research and Development Organisation. This is besides the allocation of Rs. 16, 695.83 crore for Defence Civil Estimates, including Rs. 14,649 crore for Defence Pensions.

• Laxman Kumar Behera
• March 09, 2007
• IDSA Comments

The Sixth Aero India Aerospace and Defence Exhibition held from February 07 to 11, 2007 was by all accounts a 'big' event. The biennial gathering was organized jointly by the Ministry of Defence's (MoD) Department of Defence Production and the Federation of Indian Chambers of Commerce and Industry (FICCI). For the first time, Farnborough International Ltd., the organization that holds the Farnborough International Air Show, was involved. 503 defence companies from 33 countries were represented at the Yelahanka Air Force station in Bangalore, the venue of the show.

• S. Samuel C. Rajiv
• February 22, 2007
• IDSA Comments

On February 5, 2007, President Bush presented his administration's budget for fiscal year 2008 (October 1, 2007 to September 30, 2008). Out of a total budgetary allocation of US $2.9 trillion for all sectors, $623 billion (21 per cent) was earmarked for defence purposes, including those for war efforts in various parts of the world. With the new budget, America's military budget has doubled since Bush took office in 2000 and is now higher in real terms than any other year in the last half-century.

• Laxman Kumar Behera
• February 21, 2007
• IDSA Comments

On 29 December 2006, China released its latest white paper on national defence. Though this document is widely perceived as opaque in budgetary facts and figures, it gives policy makers and analysts enough information to analyse China's regional and global security and political roles. Two crucial aspects of the paper -- defence modernisation plan and defence budget -- have significant bearing on India, considering the political and economic rivalry between the two neighbours.

• Laxman Kumar Behera
• January 31, 2007
• IDSA Comments

With President Bush signing the India-US nuclear co-operation bill into law, critics and supporters of the bill have once again reinforced their stated positions over the future benefits and losses accruing to both countries as well as the world at large. While supporters have left no stone unturned in emphasising upon the strategic, bilateral and political importance of the bill, critics have flatly described it as an 'historical mistake' which will hound efforts to curb nuclear proliferation in years to come.

• Laxman Kumar Behera
• January 18, 2007
• IDSA Comments

The recently concluded three-day international seminar on Defence Finance and Economics, organised by the Indian Ministry of Defence (Finance) in New Delhi, covered a wide variety of issues concerning defence finance and economics and reflected on varied perspectives and practices from across the globe. The seminar was of particular importance because of the involvement of policy makers, academics, and other experts from think tanks and the media, in exchanging and discussing their views in the realm of the changing business and spectrum of defence worldwide.

• Laxman Kumar Behera
• November 24, 2006
• IDSA Comments

It remains to be seen how the USA would "help India become a major world power" as the US Secretary of State stated a year ago, but Washington is certainly contributing to augment India's trans-national military reach in terms of its amphibious sealift and airlift capabilities. Last year, the US agreed in principle to sell India its Austin-class LPD (Landing Platform Dock) USS Trenton at a cost of US$ 42 million. The 17,000-ton Trenton is still in commission with the US Navy and is presently being refitted at Norfolk, Virginia.

• Gurpreet S Khurana
• April 03, 2006
• IDSA Comments

The Indian defence budget for FY 2006-07 is Rs 89, 000 crore (cr). This is 7.23 per cent more than the budget in FY 2004-05. As a percentage of GDP, the budget is 2.29 per cent as against 2.39 per cent in the previous year. Taking the revised allocation of Rs 81, 700 at RE (Revised Estimate) stage in FY 2004-05, the increase is 8.94 per cent.

• Pravin Joshi
• March 07, 2006
• IDSA Comments

The defence expenditure (DE) announced today is Rs. 83,000 crores and this is a modest increase of Rs 6,000 crores or 7.7% over last year’s budgeted estimate (BE).

• C Uday Bhaskar
• March 01, 2005
• IDSA Comments