India: $100 bn Defense Market for the Taking

India will be offering large defense contracts worth more than $100 bn over the next 10 years. This, in addition to the deals it already has running. Under a new policy declared by the government, now even Indian companies will be allowed to bid for these contracts. Until now, only foreign companies could bid for the large defense deals, and the Indian companies were left to take up the contracts which involved non-combative equipment for the forces. Now the Indian government wants to encourage Indian companies too to enter the arms market. India has been spending heavily on defense in the past decade and plans to increase defense expenditure continuously. (Read: India Pakistan Arms Race Getting Hotter)

Sitanshu Kar, a defense ministry spokesperson said, "The field is now open for them to come and bid for any project along with the world's best. The government is giving them an opportunity to expand their capabilities. This move can also save costs and help us turn India into a major production hub in the near future. Local companies are free to bid for projects involving tanks, artillery and aircraft." Defense minister AK Antony said, "The current review is primarily focused on two essential areas of promoting and facilitating wide participation of defense industry and enabling transparency and integrity in all acquisitions. Over the next five to six years, the total budgetary provision for capital acquisition is likely to reach $50 bn." Vivek Lall, India country head for Boeing Integrated Defense Systems said, "The government is very forward leaning and the steps we view as a sign of the government's confidence in the maturity of the Indian industry."

India's arsenal is mainly Soviet, and it also has had deals with France and Israel, among other countries. The companies most likely to benefit from this policy change are Tata Motors, Mahindra and Mahindra, Ashok Leyland, and Larsen and Toubro.