India becomes biggest foreign buyer of US weapons

India becomes biggest foreign buyer of US weaponsBy Gill Plimmer in London and Victor Mallet in New Delhi

India imported $1.9bn of military kit from the US last year, making it the biggest foreign buyer of US weapons, according to research from IHS Jane’s.

The US, which remained the largest exporter of military equipment, displaced Russia as India’s biggest arms supplier. In total, the US exported $25.2bn of military equipment in 2013, compared with $24.9bn the previous year.

India, with total defence imports of $5.9bn, became the most enthusiastic buyer from the US, knocking Saudi Arabia out of the top spot with purchases that included Boeing’s C-17A strategic transport aircraft and P-8I Maritime Patrol Aircraft.

“We are seeing trade patterns fundamentally change for the dominant players,” said Ben Moores, senior analyst at the security consultancy and the author of the report. “India is outpacing everyone.”

India overtook China to become the biggest arms importer in 2010, according to the Stockholm International Peace Research Institute, which monitors the global arms trade.

Until now, however, most of India’s contracted arms purchases have been from Russia, partly because it has needed to replace or upgrade equipment bought from its former ally the Soviet Union.

India has struggled to create indigenous manufacturing of high-tech weapons systems, and depends on imports in its efforts to catch up with the better-equipped Chinese armed forces.

“It is a big capability gap that’s opened between the Indians and the Chinese,” said Mr Moores. “India is buying a lot of high-end equipment from the Americans to address that gap.”

In 2009 India imported $237m in military equipment from the US but this jumped to $1.9bn last year, as almost half of its $13.4bn defence procurement budget went overseas. India accounted for nearly 10 per cent of the $63bn international defence market, outstripping much of the Middle East and China.

Arms trade statistics can be volatile because of deliveries of high-value items such as aircraft. But the latest US-India data, which measures deliveries rather than sales contracts, is significant because other western arms exporters have been unable to clinch deals with New Delhi in the face of periodic corruption scandals, slowing Indian growth and budget constraints.

France’s Dassault, for example, is still waiting for India to finalise a preliminary agreement to buy Rafale fighter jets that could be worth up to $20bn.

AK Antony, India’s defence minister, this month said his ministry had used up most of its budget for the year ending in March and would make no large acquisitions until the next financial year.

“There is no money left,” he said. “All major projects have to wait until April 1.”

The Middle East, meanwhile, continued to import military equipment at a rapid pace, and now represents one-third of the global arms market.

Saudi Arabia, Oman and UAE together imported more than western Europe as a whole, buying $9.3bn-worth of equipment compared with $8.7bn for the latter.

Saudi Arabia imported more than $5.4bn worth of equipment, more than double the $2.2bn it bought in 2009. By 2015 its imports are expected to increase to $7.8bn. The United Arab Emirates’ import programme is expected to more than double. By 2015 imports are forecast to total $3.1bn, up from a total of $1.4bn. American companies accounted for half of all defence exports to the region.

South Korea is set to break into the top 10 global national military exporters for the first time in the next 18 months and is forecast to overtake China by 2015. It exported $600m of equipment this year but by 2015 it will be exporting $1.5bn a year in defence equipment and will supplant some of the large Western companies in the process, IHS Jane’s said.

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