India pushing for defence modernisation as its focus shifts to the Indo-Pacific

23 May 2023

India is undergoing a structural shift in its strategic orientation, involving rebalancing its traditionally asymmetric continental focus towards an expansive maritime agenda in the Indian Ocean and the Indo-Pacific. This trend is concomitant with a restructuring of India’s defence capacities which revolves around improving domestic defence production to make India’s military both self-reliant and export-oriented. In essence, there are two broad compulsions underlying India’s structural defence reorientation: a domestic strengthening leading to a strong defence industrial base, and a favourable multilateral order in the Indo-Pacific. These are likely to ensure that the broader Indian Ocean region remains its primary area of responsibility and influence, while New Delhi steps up as a net-security provider in the region. Ultimately New Delhi’s strategic shift showcases that India sees the solution to heightened continental aggression from Beijing in a naval strategy.

Shifting threat perceptions

The Line of Control (LoC) showdown between India and Pakistan in March 2019 and the fatal border clash between Indian and Chinese soldiers at the Line of Actual Control (LAC) have underscored the centrality of continental threats for India. However, as great power competition has changed hues, and particularly with China’s military resurgence and far-reaching belligerence, India’s posture has gravitated to include maritime dimensions in its strategic calculus. The Indian Maritime Security Strategy of 2015 is a notable inflexion point in three prominent ways: for the first time, the Indian Navy formally included the ‘Indo-Pacific’ in its strategic recognition, it signalled the Indian Navy’s expanding regional role, and it outlined India’s role as a net-security-provider in the region.

To effectively counter threats from both China and Pakistan, India needs to maintain a twin-domain focus, enhancing its capabilities in both the continental and maritime domains.

Three nuances mark a departure from the past in India’s strategic posture. First, between its two fronts (LoC and the LAC), India’s focus in the recent past has shifted to the LAC given the heightened tension with China at the border. Repeated Chinese ingresses into Indian territory in the past few years have underscored the immediacy of the threats around the LAC. Second, China’s strategy to change the balance in the Indian Ocean is obvious, with an increasing Chinese presence at strategic nodes such as Djibouti and Gwadar. Chinese aggression along the LAC and increased maritime activity have pushed New Delhi to formulate a strategy that can answer Beijing’s pressure on land just as well as deterring it at sea. India’s Indo-Pacific strategy, which depends on promoting a multilateral rules-based order and pursuing partnerships, is part of its long-term vision to ensure a favourable balance of power in the region. Needless to say, a growing need for multilateralism has changed India’s own parameters and considerations of its partnerships in the region. The third factor concerns the Indian military's access to modern defence equipment and current reliance on military imports. New Delhi's strategic readjustments aim to link domestic capacity building in manufacturing to reduce import dependence with a growth-oriented approach to regional security which connects domestic growth objectives to regional security compulsions.

India’s strategic posture is increasingly taking the evolution of technology in combat and peacetimes into account, further adding complexity to the changed nature of threats and rapidly shifting metrics of great power competition. Technological adaptation is part of India’s twin purpose to jointly build capacities in the Indo-Pacific facilitated by interoperability and agreements as well as to prepare for rapidly evolving warfighting techniques and training. In recent years, India has made significant strides in upgrading its military hardware and electronic equipment, expanding its defence industry, and enhancing its nuclear arsenal.

Substituting import with production

Despite being one of the largest standing armies in the world with approximately 1.4 million active-duty soldiers, India’s need for a capability upgrade cannot be overstated. India has faced significant challenges in modernising its military. One of the main issues has been a lack of domestic defence production capabilities, forcing India to rely on foreign suppliers for much of its military hardware. The external dependence in defence has proven to be a twofold burden: It created geopolitical strains as India had to deflect international pressure due to the West’s efforts to internationally isolate Russia, its largest military supplier, as well as persistent pressure on state coffers to pay for high-value imports. Imports in the recent past such as the Indian Naval Ship Vikramaditya from Russia, MH-60R Seahawk helicopters (USD 2.8 billion), Apache helicopters (USD 796 million), and the Large Aircraft Infrared Countermeasure (USD 189 million) from the US, and Rafale fighter aircraft from France characterise India’s continued external reliance. On the positive side, these and other systems like the P-8Is have significantly improved India’s maritime domain awareness. According to the Stockholm International Peace Research Institute, India remained the biggest importer of weapons in the world from 2018-22, despite a decrease of 11 per cent in its imports from 2013-17 to 2018-22. During both periods, Russia supplied the most arms to India, but its proportion of India's total arms imports decreased from 64 per cent to 45 per cent, with France becoming the second biggest supplier from 2018-22.

Another issue has been the slow pace of modernisation of the Indian Armed Forces, even though the Indian government has been investing heavily in modernising its military hardware since 2013 to gradually speed up the process. The Indian Armed Forces are undergoing a major modernisation process to meet future security challenges, which presents a significant opportunity for the Indian industry to develop indigenous capabilities in high-technology areas. The capacity building process involves the use of perspective plans to determine required capabilities and procurement of equipment and technology. Technological self-reliance is critical for future military success, and there is some momentum gathering to streamline procurement procedures and support domestic industry participation.

In recent years, the Indian government has launched several initiatives aimed at encouraging domestic production of defence equipment. In 2014, the government launched the "Make in India" initiative, which aims to encourage foreign and domestic companies to invest in manufacturing in India. Under this initiative, the government has offered a range of incentives to companies to set up manufacturing facilities in India, including tax breaks and subsidies. In 2021, there was a renewed push to revamp the Make in India initiative as New Delhi sought to further shift away from imports and external dependencies. The overall policy shift seems to have been successful as the proportion of defence goods and services purchased from within the country has been increasing steadily. In the fiscal year 2018-19, domestic procurement accounted for 54 per cent of the total procurement, but it rose to 59 per cent in 2019-20 and further to 64 per cent in 2020-21. In the current year, the share of domestic procurement has gone up to 68 per cent, with 25 per cent of the budget set aside for purchasing from private companies. Despite this ascendance, the Ministry of Defence’s target of making the defence industry worth USD 26 Billion by 2025 remains an uphill task.

Security cooperation will be essential as India faces twin-domain threats

To effectively counter threats from both China and Pakistan, India needs to maintain a twin-domain focus, enhancing its capabilities in both the continental and maritime domains. This will require sustained investments in defence research and development, infrastructure, and partnerships with other countries in the region. Besides everything else, the nuclear issue in the Indian Ocean region has largely been kept out of focus because of the regional countries’ stand against the nuclearization of the IOR — a legacy from the Cold War. However, an obviously large subsurface capability of China could potentially draw a rapid modernisation of the nuclear arsenal in response from India. The hostile relationship between India and Pakistan has historically cast a poor light on South Asian strategic stability. China's new assertiveness could further destabilise the region as competition is likely to increase. Considering other hotspots in the Indo-Pacific, India is well advised to strengthen its position by seeking closer cooperation with regional partners as well as the US and EU to build a strong front against security threats while maintaining its regional leadership position.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Dr Vivek Mishra is a Fellow with ORF’s Strategic Studies Programme. His research interests include America in the Indian Ocean and Indo-Pacific and Asia-Pacific regions, particularly the role of the US in security in South Asia, Indo-US defence relations, and the Indian defence sector. He also studies security and geopolitical aspects of Indian foreign policy closely. Image credit: Flickr/U.S. Pacific Fleet.