India Defence and Security Report 2015
BMI View: We expect India's defence budget to keep increasing in absolute terms in the next five years.
This is driven primarily by persisting terrorist threats and violence from insurgent groups across thecountry, as well as continued tensions with Pakistan regarding the disputed territories of Jammun andKashmir. Defence spending is also driven by India's desire to increase its military presence in the region,leading to a significant modernization of its Army, Navy and Airforce. A significant portion of this spendingwill be channeled through the 'Make in India' strategy implemented and promoted by Modi, which will openup new opportunities for private sector national and international companies operating in the defencesector.
The election of Narendra Damodardas Modi as India's Prime Minister in May 2014 has breathed fresh lifeinto the country's defence sector. The first budget presented by the new Prime Minister to the Parliamentlast February pointed to a significant emphasis on two crucial points that had been plaguing the defencesector in the past. Firstly, there has been an important increase in the budget allocated to defence spending,in large share targeted at the modernization of the army so as to provide its manpower with the crucialartillery necessary for fighting terrorism, insurgency and border incursions on the ground; the Air force willalso get a significant share of the defence budget, with the aim of renewing the country's ageing capabilities.
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