USA eyes a bigger pie in India’s defence imports

USA’s arms exports to India have surged in recent years and are likely to reach a new high this year due to closer trade ties between the two countries

By Sai Nikesh D

While Russia is by far the largest supplier of arms to India, accounting for around 70% of India’s total arms imports, USA is keen to expand its presence as a prominent arms exporter to India which is the world’s largest arms importer.

India, with its third largest armed forces in the world, is largely dependent on imports in the defence sector and 60% of its defence requirements is currently met by imports. According to the Stockholm International Peace Research Institute (SIPRI), USA climbed to the second position next to Russia in arms exports to India in CY2013, pushing Israel to the third position.

India-Defence-TheDollarBusiness

Source – SIPRI

Russia has been the main defence exporter to India, largely due to the friendly relations between the two countries. Israel, UK, Germany, USA, Netherlands, and France are among other defence exporters to India.

Russia exported arms of around $3.86 billion to India in CY2012, which declined slightly in CY2013. Israel was the second largest exporter in CY2012 with exports worth around $227 million, followed by USA which exported around $139 million worth arms to India in the year.

However, USA’s arms exports to India have grown to around $981 million in CY2013, which is a staggering 600% increase y/y and much higher than a mere $2 million worth arms exports to India in CY2009.

Moreover, with India’s growing interest to improve the trade balance with USA, USA’s arms exports are expected to grow significantly this year. Yesterday, India’s Defence Minister Manohar Parrikar said that India is likely to sign a 10-year defence framework agreement with USA during US President Barack Obama’s visit to India on January 26, 2015.

 

This article was published in The Dollar Business on January 13, 2015.

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