Aspects of India's Economy No. 41

India as 'Global Power'
III. From Central Asia to the Gulf to the South China Sea

In 2001, on a visit to the US, external affairs minister Jaswant Singh revealed to an interviewer what he considered India's "sphere of influence":

This grandiose vision, unrelated to India's actual economic strength or political influence, arrogant towards other countries of the region, has been made the basis of India's military policy. In November 2003, the Vajpayee government embarked on "a 20-year programme to become a world power whose influence is felt across the Indian Ocean, the Arabian Gulf, and all of Asia."³⁰ This included the setting up of an air base in Tajikistan; building up military relations/interaction with a range of countries from Central Asia, the Gulf, South Africa and Southeast Asia; extending infrastructure, logistic, and material support to Myanmar as a counterweight to Chinese activities there; and acquiring the military infrastructure to project power across its "sphere of influence".

A key role in this programme is to be played by the Indian Navy. This will require a massive expansion of the Indian Navy. On October 14, 2003, Admiral Singh, the head of Indian Navy, said that "Fulfilling India's dream to have a full-fledged blue-water navy would need at least three aircraft carriers, 20 more frigates, 20 more destroyers with helicopters, and large numbers of missile corvettes and anti-submarine warfare corvettes."³¹ As of 2003 the Navy's acquisitions programme envisioned spending a staggering $20 billion (over Rs 900 billion) on buying vessels and aircraft and equipping them with missiles, systems, and launchers.³²

Significantly, India has reorganised its naval command to create a Far Eastern Naval Command (FENC) off Port Blair on the Andaman Islands. The Andaman and Nicobar Islands are located 1,200 km from the Indian mainland, but just 90 km from Indonesia and 50 km from Myanmar. The FENC, when fully developed by 2012, will have a chain of small anchor stations and three main bases; it would be larger, in fact, than the former US base in the Philippines at Subic Bay. It would be equipped with state-of-the-art naval electronic warfare systems that can extend as far as Southeast Asia. In December 2003, India announced that it would reinforce the Andaman and Nicobar bases with strike jets, aerial refuelers, and about 100 long-, short-, and middle-range unmanned aerial vehicles to monitor developments at Myanmar's Coco Island base. The Indian Air Force plans on establishing a fighter air base at southern Nicobar.³³

Moreover, the Navy would not merely patrol the seas: it would have the capacity to create and deploy "battalion-sized forces³⁴ at various strategic points... [on] short notice, and disperse them quickly from the landing or dropping zone before any adequate enemy response."³⁵ In other words, the programme envisions the capacity to launch intervention forces incountries in India's "sphere of influence".

India is also planning to acquire or construct a submarine that could launch nuclear missiles, aircraft carriers, and long-range missiles that could strike targets over 2,500 kms away – that is, with the ability to strike China.³⁶ According to one report,

All this was reflected in the new Maritime Doctrine finalised by the Vajpayee government in May 2004 (shortly before its fall from power), "perhaps the most significant statement of India's defense plans", according to the US War College study cited earlier:

The study notes the quick acceptance of this doctrine by the Manmohan Singh government, "signaling the elite consensus about India's national security objectives".

The price of inflated ambitions
Pretensions to great power status do not come cheap. India's official military expenditures³⁹ rose from roughly Rs 490 billion ($11.6 billion) in 1998-99 to Rs 680 billion ($14.2 billion) in 2001-02 and Rs 900 billion ($20 billion) in 2004-05. The budgeted figure for 2005-06 is Rs 970 billion ($21.5 billion) – a doubling in seven years. Capital expenditure of the military (i.e., largely acquisition of weapons) rose from $2.4 billion in 1998-99 to $3.4 billion in 2001-02, then doubled to $7.4 billion in 2004-05. The budgeted figure for 2005-06 is $7.6 billion. The graph (see Chart 3) heads upward after November 2003 (the launch of the 20-year programme to become a ‘world power') and May 2004 (the adoption of a new Maritime Doctrine).

Reportedly, around half India's defence capital expenditure consists of imports. The Stockholm International Peace Research Institute (SIPRI) puts India's arms imports at $9.5 billion over the last six years, making it the world's second largest importer for that period (after China). SIPRI states that India's arms imports more than doubled in 2003 over the previous year, maintaining a constant increase over 2000. In 2003, India had the dubious distinction of being the world's largest arms importer, accounting for 19 per cent of global arms imports.

In 2005 another (projected) $3 billion will be added to the total. "This year", says India Today (11/4/05), "[India] begins a fresh round of arms purchases conservatively estimated at over $15 billion." The immediate shopping list reportedly includes 126 multi-role fighter planes ($6 to 9 billion, according to different reports),⁴⁰ six Scorpene submarines ($4.4 billion), eight P-3C Orion long-range maritime patrol and strike aircraft (around $3 billion), as well as Mirage fighters, air defence missiles, multiple mobile rocket launchers, and so on.

Revealingly, this steep rise in India's military expenditures has not invited any censure from the World Bank, which so vigorously demands the reduction of Government borrowing (what is referred to as the ‘fiscal deficit'). Consider the fact that between 1998-99 and 2004-05, India's military expenditure rose by about Rs 410 billion, whereas the fiscal deficit rose by only about Rs 260 billion; that is, the increased military expenditure accounted for more than the entire increase in the fiscal deficit.

Some might argue that the World Bank's silence is due to the fact that the imperialist countries' arms manufacturers stand to win large orders from India. In particular, the US is anxious that it not miss the bus: ambassador David C. Mulford bluntly states that "the US, which has a small market share in this sector [India's arms purchases], intends to become a major player".⁴¹

Indeed, US firms put in a sizeable presence at the Aero India air show in Bangalore in February 2005, during which the US-India Business Council (USIBC) made its second annual defence mission to India; the mission included all the leading US arms makers.⁴²

US corporations may spread their wares for the new customer, but it is the US government that will clinch the deal. "There are jobs to be maintained in the US defence industry," said Mulford, "and they would be quite happy to get into business relationships".⁴³ His government would make a concerted bid to win India's order for 126 fighter aircraft, and would "put up something before the Indian defence authorities that is cheaper and better and will be very hard to turn down" (emphasis added). "We should be a player in the market", said Mulford, "we make the best product and we should be able to compete for it."⁴⁴

While Mulford talks of "competing", the "New Framework for the US-India Defense Relationship" signed on June 28, 2005 by India's defence minister Pranab Mukherjee and US defence secretary Donald Rumsfeld, makes it clear the basis for selection will not be the price and quality of American weapons. Rather India's purchase of US weapons is seen as a "means to reinforce the strategic partnership":

In pursuit of this shared vision of an expanded and deeper U.S.-India strategic relationship, our defense establishments shall... expand two-way [sic] defense trade between our countries. The United States and India will work to conclude defense transactions, not solely as ends in and of themselves, but as a means to strengthen our countries' security, reinforce our strategic partnership...
In recognition of the growing breadth and depth of the US-India strategic defense relationship, we hereby establish the Defense Procurement and Production Group.... [which] will oversee defense trade, as well as prospects for co-production and technology collaboration....

During Manmohan Singh's July 2005 visit to the US, the Pentagon briefed the press that it expected $7 billion worth of conventional weapons orders from India.

Notes:

29. Times of India, 13/4/01; emphasis added. In 1938, when Jaswant Singh considers Kuwait to have been part of India's "sphere of influence", India was under British rule and Kuwait was effectively so as a British ‘protectorate'. (back)

30. "India Aims to Project Power across Asia", Vivek Raghuvanshi, Defense News, 10/11/03, cited in Natural Allies, pp. 21, 40. This programme appears to have been drawn up by the Directorate of Defence Policy and Planning in April 2003. The plan advocated "a rapid reaction capability for real-time troop deployment to countries along the rim of the Indian Ocean to create a defense umbrella for them. This plan, ‘India's Strategic Vision', envisions cooperation with Indonesia, Malaysia, Maldives, Mauritius, and Vietnam." – Raghuvanshi, "India's Navy Reaches for Blue Water Goals", Defense News, 27/10/03, cited in Blank, p. 124. Much of the following account draws on the material in Natural Allies. (back)

31. Cited in Natural Allies, p. 23. (back)

32. Ibid. (back)

33. "India bids to rule the waves", Ramtanu Maitra, Asia Times Online, 19/10/05; Natural Allies, p.75. (back)

34. A battalion is typically composed of two or more companies, comprising 800-1,000 soldiers, with a separate headquarters commanded by an officer. (back)

35. Natural Allies, p. 23. (back)

36. Ibid. (back)

37. Vivek Raghuvanshi, "India's New Government Rethinks Acquisitions", Defense News, 13/12/04, quoted in Natural Allies, p. 125. (back)

38. Natural Allies, p. 24. (back)

39. That is, including the ministry of defence and defence pensions, but excluding various military-related expenditures hidden in other ministries – see Aspects no.s 39 & 40, pp. 48-49. (back)

40. India Today (11/4/05) puts it at $6 billion, Frontline (25/3/05) at $9 billion. (back)

41. "US wants bigger share of Indian arms market", Hindu, 9/2/05. (back)

42. Thomas R. Pickering, former US ambassador, senior vice president for Boeing, and Joseph W Ralston, retired US Air Force general, led the mission. The USIBC includes Boeing, the Cohen group, BAe Systems NA, Bell Helicopter, Fremont, General Dynamics, International Turbine Engine Co, ITT Defence, Lockheed Martin, Northrup Grumman, Raytheon and Sikorsky Aircraft Corporation. ("India, US bullish on defence ties", Business Standard, 11/2/05). (back)

43. "US, India have gone beyond talking about ballistic missile defences", Hindu, 9/10/04. (back)

44. "We'll offer a good fighter deal: US", Asian Age, 30/3/05. (back)

No. 41 (December 2005): India's Place in the US Strategic Order India as a 'Global Power' I. The Reality of India II. The Class Logic of the Indian Rulers' Drive for 'Great-Power' Status III. From Central Asia to the Gulf to the South China Sea IV. Why the US Promotes India's Great-Power Ambitions V. In Conclusion Client State App. I: Indo-US Joint Military Exercises after 2002 – A Partial List App. II: Growing Relationship with Israel App. III: Manufacturing Justifications for an Aggressive Alliance App. IV: Internal Requirements of 'Great-Power' Status App. V: Text of Recent Indo-US Agreements	India as 'Global Power' III. From Central Asia to the Gulf to the South China Sea In 2001, on a visit to the US, external affairs minister Jaswant Singh revealed to an interviewer what he considered India's "sphere of influence": For a long time, India has not been seen in its true dimensions. How many people know that Indonesia is only 65 miles from the southernmost Indian island? Or that but for PoK [Pakistan-occupied Kashmir], Tajikistan is just 27 miles from India. That we had a border with Iran in 1947? Or that the legal tender of Kuwait till 1938 was the rupee? So when we talk about Indonesia or central Asia or the Gulf, it is because of our interest and our sphere of influence.²⁹ This grandiose vision, unrelated to India's actual economic strength or political influence, arrogant towards other countries of the region, has been made the basis of India's military policy. In November 2003, the Vajpayee government embarked on "a 20-year programme to become a world power whose influence is felt across the Indian Ocean, the Arabian Gulf, and all of Asia."³⁰ This included the setting up of an air base in Tajikistan; building up military relations/interaction with a range of countries from Central Asia, the Gulf, South Africa and Southeast Asia; extending infrastructure, logistic, and material support to Myanmar as a counterweight to Chinese activities there; and acquiring the military infrastructure to project power across its "sphere of influence". A key role in this programme is to be played by the Indian Navy. This will require a massive expansion of the Indian Navy. On October 14, 2003, Admiral Singh, the head of Indian Navy, said that "Fulfilling India's dream to have a full-fledged blue-water navy would need at least three aircraft carriers, 20 more frigates, 20 more destroyers with helicopters, and large numbers of missile corvettes and anti-submarine warfare corvettes."³¹ As of 2003 the Navy's acquisitions programme envisioned spending a staggering $20 billion (over Rs 900 billion) on buying vessels and aircraft and equipping them with missiles, systems, and launchers.³² Significantly, India has reorganised its naval command to create a Far Eastern Naval Command (FENC) off Port Blair on the Andaman Islands. The Andaman and Nicobar Islands are located 1,200 km from the Indian mainland, but just 90 km from Indonesia and 50 km from Myanmar. The FENC, when fully developed by 2012, will have a chain of small anchor stations and three main bases; it would be larger, in fact, than the former US base in the Philippines at Subic Bay. It would be equipped with state-of-the-art naval electronic warfare systems that can extend as far as Southeast Asia. In December 2003, India announced that it would reinforce the Andaman and Nicobar bases with strike jets, aerial refuelers, and about 100 long-, short-, and middle-range unmanned aerial vehicles to monitor developments at Myanmar's Coco Island base. The Indian Air Force plans on establishing a fighter air base at southern Nicobar.³³ Moreover, the Navy would not merely patrol the seas: it would have the capacity to create and deploy "battalion-sized forces³⁴ at various strategic points... [on] short notice, and disperse them quickly from the landing or dropping zone before any adequate enemy response."³⁵ In other words, the programme envisions the capacity to launch intervention forces incountries in India's "sphere of influence". India is also planning to acquire or construct a submarine that could launch nuclear missiles, aircraft carriers, and long-range missiles that could strike targets over 2,500 kms away – that is, with the ability to strike China.³⁶ According to one report, India plans future acquisitions based on a scenario involving conflict with China, a defense ministry official said. The Agni-3 nuclear-capable missile, with a range of 3,000 kilometres, is ready for testing, and the Indo-Russian BrahMos anti-ship cruise missile, with a range of 290 kilometres, will enter Indian Navy service in 2005, the official said. The Air Force also received its fifth Il-78 serial tanker from Uzbekistan, which will enable the service's SU-30MKI and Mirage 2000-H combat aircraft to fly deep inside China.³⁷ All this was reflected in the new Maritime Doctrine finalised by the Vajpayee government in May 2004 (shortly before its fall from power), "perhaps the most significant statement of India's defense plans", according to the US War College study cited earlier: Whereas [India's] earlier doctrine focused on inward-looking strategies, the new doctrine attempts to deal with "conflict with [an] extra-regional power and protecting persons of Indian origin and interest abroad", points that clearly suggest action against China and in the Gulf...³⁸ The study notes the quick acceptance of this doctrine by the Manmohan Singh government, "signaling the elite consensus about India's national security objectives". The price of inflated ambitions Pretensions to great power status do not come cheap. India's official military expenditures³⁹ rose from roughly Rs 490 billion ($11.6 billion) in 1998-99 to Rs 680 billion ($14.2 billion) in 2001-02 and Rs 900 billion ($20 billion) in 2004-05. The budgeted figure for 2005-06 is Rs 970 billion ($21.5 billion) – a doubling in seven years. Capital expenditure of the military (i.e., largely acquisition of weapons) rose from $2.4 billion in 1998-99 to $3.4 billion in 2001-02, then doubled to $7.4 billion in 2004-05. The budgeted figure for 2005-06 is $7.6 billion. The graph (see Chart 3) heads upward after November 2003 (the launch of the 20-year programme to become a ‘world power') and May 2004 (the adoption of a new Maritime Doctrine). Reportedly, around half India's defence capital expenditure consists of imports. The Stockholm International Peace Research Institute (SIPRI) puts India's arms imports at $9.5 billion over the last six years, making it the world's second largest importer for that period (after China). SIPRI states that India's arms imports more than doubled in 2003 over the previous year, maintaining a constant increase over 2000. In 2003, India had the dubious distinction of being the world's largest arms importer, accounting for 19 per cent of global arms imports. In 2005 another (projected) $3 billion will be added to the total. "This year", says India Today (11/4/05), "[India] begins a fresh round of arms purchases conservatively estimated at over $15 billion." The immediate shopping list reportedly includes 126 multi-role fighter planes ($6 to 9 billion, according to different reports),⁴⁰ six Scorpene submarines ($4.4 billion), eight P-3C Orion long-range maritime patrol and strike aircraft (around $3 billion), as well as Mirage fighters, air defence missiles, multiple mobile rocket launchers, and so on. Revealingly, this steep rise in India's military expenditures has not invited any censure from the World Bank, which so vigorously demands the reduction of Government borrowing (what is referred to as the ‘fiscal deficit'). Consider the fact that between 1998-99 and 2004-05, India's military expenditure rose by about Rs 410 billion, whereas the fiscal deficit rose by only about Rs 260 billion; that is, the increased military expenditure accounted for more than the entire increase in the fiscal deficit. Some might argue that the World Bank's silence is due to the fact that the imperialist countries' arms manufacturers stand to win large orders from India. In particular, the US is anxious that it not miss the bus: ambassador David C. Mulford bluntly states that "the US, which has a small market share in this sector [India's arms purchases], intends to become a major player".⁴¹ Indeed, US firms put in a sizeable presence at the Aero India air show in Bangalore in February 2005, during which the US-India Business Council (USIBC) made its second annual defence mission to India; the mission included all the leading US arms makers.⁴² US corporations may spread their wares for the new customer, but it is the US government that will clinch the deal. "There are jobs to be maintained in the US defence industry," said Mulford, "and they would be quite happy to get into business relationships".⁴³ His government would make a concerted bid to win India's order for 126 fighter aircraft, and would "put up something before the Indian defence authorities that is cheaper and better and will be very hard to turn down" (emphasis added). "We should be a player in the market", said Mulford, "we make the best product and we should be able to compete for it."⁴⁴ While Mulford talks of "competing", the "New Framework for the US-India Defense Relationship" signed on June 28, 2005 by India's defence minister Pranab Mukherjee and US defence secretary Donald Rumsfeld, makes it clear the basis for selection will not be the price and quality of American weapons. Rather India's purchase of US weapons is seen as a "means to reinforce the strategic partnership": In pursuit of this shared vision of an expanded and deeper U.S.-India strategic relationship, our defense establishments shall... expand two-way [sic] defense trade between our countries. The United States and India will work to conclude defense transactions, not solely as ends in and of themselves, but as a means to strengthen our countries' security, reinforce our strategic partnership... In recognition of the growing breadth and depth of the US-India strategic defense relationship, we hereby establish the Defense Procurement and Production Group.... [which] will oversee defense trade, as well as prospects for co-production and technology collaboration.... During Manmohan Singh's July 2005 visit to the US, the Pentagon briefed the press that it expected $7 billion worth of conventional weapons orders from India. Notes: 29. Times of India, 13/4/01; emphasis added. In 1938, when Jaswant Singh considers Kuwait to have been part of India's "sphere of influence", India was under British rule and Kuwait was effectively so as a British ‘protectorate'. (back) 30. "India Aims to Project Power across Asia", Vivek Raghuvanshi, Defense News, 10/11/03, cited in Natural Allies, pp. 21, 40. This programme appears to have been drawn up by the Directorate of Defence Policy and Planning in April 2003. The plan advocated "a rapid reaction capability for real-time troop deployment to countries along the rim of the Indian Ocean to create a defense umbrella for them. This plan, ‘India's Strategic Vision', envisions cooperation with Indonesia, Malaysia, Maldives, Mauritius, and Vietnam." – Raghuvanshi, "India's Navy Reaches for Blue Water Goals", Defense News, 27/10/03, cited in Blank, p. 124. Much of the following account draws on the material in Natural Allies. (back) 31. Cited in Natural Allies, p. 23. (back) 32. Ibid. (back) 33. "India bids to rule the waves", Ramtanu Maitra, Asia Times Online, 19/10/05; Natural Allies, p.75. (back) 34. A battalion is typically composed of two or more companies, comprising 800-1,000 soldiers, with a separate headquarters commanded by an officer. (back) 35. Natural Allies, p. 23. (back) 36. Ibid. (back) 37. Vivek Raghuvanshi, "India's New Government Rethinks Acquisitions", Defense News, 13/12/04, quoted in Natural Allies, p. 125. (back) 38. Natural Allies, p. 24. (back) 39. That is, including the ministry of defence and defence pensions, but excluding various military-related expenditures hidden in other ministries – see Aspects no.s 39 & 40, pp. 48-49. (back) 40. India Today (11/4/05) puts it at $6 billion, Frontline (25/3/05) at $9 billion. (back) 41. "US wants bigger share of Indian arms market", Hindu, 9/2/05. (back) 42. Thomas R. Pickering, former US ambassador, senior vice president for Boeing, and Joseph W Ralston, retired US Air Force general, led the mission. The USIBC includes Boeing, the Cohen group, BAe Systems NA, Bell Helicopter, Fremont, General Dynamics, International Turbine Engine Co, ITT Defence, Lockheed Martin, Northrup Grumman, Raytheon and Sikorsky Aircraft Corporation. ("India, US bullish on defence ties", Business Standard, 11/2/05). (back) 43. "US, India have gone beyond talking about ballistic missile defences", Hindu, 9/10/04. (back) 44. "We'll offer a good fighter deal: US", Asian Age, 30/3/05. (back) NEXT: Why the US Promotes India's Great-Power Ambitions
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