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11 March 2015

India No Longer the World's Top Arms Importer

March 09, 2015

IHS reports that Saudi Arabia surpassed India to become the world’s top arms importer in 2014. 

A recently released study by defense research company IHS notes that India conceded its position as the world’s top arms exporter — a superlative it had held for several years running — to Saudi Arabia in 2014. Saudi spending on arms last year stood at $6.5 billion while India spent $5.8 billion on its needs. IHS predicts that the trend will be lasting. Saudi Arabia, according to the report, will spend $9.8 billion in 2015, accounting for a seventh of worldwide expenditure on arms imports. Global defense trade rose to a record $64.4 billion, representing the sixth consecutive year-on-year increase, according to the same report.

India’s recently announced 2015 government budget earmarked $40 billion for defense expenditure, a sum that some have described as inadequate for the country’s ambitious defense modernization plans. For example, Defense News reported recently that India’s newly announced budget casts doubt that the long-running contract negotiations with France’s Dassault Aviation for the purchase of 126 Rafale fighters to fulfill India’s Medium Multi-Role Combat Aircraft (MMRCA) needs could fail due to inadequate funding. The Rafale deal is expected to cost $12 billion. New Delhi currently has nearly $20 billion in foreign procurement proposals pending, with the MMRCA contract being the largest. Following the MMRCA, India is considering acquiring Airbus A330 tankers, Boeing Apache attack helicopters, nearly 200 light utility helicopters, and heavy lift helicopters. Despite its long wishlist of foreign military equipment, the current Indian government has placed a major strategic emphasis on building an indigenous defense industrial base.

Saudi Arabia rising to the top of global arms spending is a function of rising geopolitical tensions in the Middle East. Iran, Saudi Arabia’s regional arch-rival, may soon conclude an agreement with the P5+1 group of powers over the future of its nuclear program, allowing it to move toward diplomatic normalization. Saudi Arabia’s investment in new equipment is also being driven by other factors, such as the ongoing carnage of the Islamic State to its north in Iraq and the success of a Shia Houthi rebellion to its south, in Yemen. IHS, in its report, noted that ”growth in Saudi Arabia has been dramatic and, based on previous orders, these numbers are not going to slow down,” suggesting that Saudi Arabia’s spending is being spurred by quickly developing regional trends. The Middle-East as a region is currently a global hotspot for fast rising military spending. IHS notes that the “Middle East is the biggest regional market and there are $110 billion in opportunities in the coming decade.”

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