India Establishes Non-lapsable Fund for Defense Modernization

By siliconindia  |  Tuesday, 12 December 2023, 08:39:46 AM IST

India Establishes Non-lapsable Fund for Defense Modernization
India has declared the establishment of a non-lapsable fund to enhance investments in the nation's defense modernization. This initiative follows the government's allocation of $19.4 billion (Rs1.6 trillion) for the armed forces' modernization in the February 2023 Union Budget, reflecting a 57% increase compared to the 2019/20 fiscal year.
As part of the outlined initiatives, the Indian Ministry of Defence (MoD) is set to incorporate main battle tanks, air defense gun systems, missiles, naval vessels, submarines, multi-role aircraft, transport helicopters, and attack helicopters into its current fleet.
It also plans to upgrade its C4I2SR (command, control, communications, computers, intelligence, information, surveillance, and reconnaissance) systems, maritime surveillance, and anti-submarine warfare capabilities. While the Indian Army’s long-delayed Future Infantry Combat Vehicle (FICV) programme is expected to be expedited, the MoD is also anticipated to speed up the Army’s Tactical Communication System programme.
Looking ahead, GlobalData intelligence anticipates Indian defence spending to increase from $80.5bn to $97.7bn between 2024 and 2028, reflecting a compound annual growth rate (CAGR) of 5%. This contrasts with the slow CAGR of 3.6% since 2019 largely due to economic constraints. The country’s decision to assign more funds to modernisation reflects the global trend of defence expansion as a means of security in an unstable geopolitical landscape.
Embracing the principles of realpolitik, the India-US Defense Acceleration Ecosystem (Indus-X) was introduced in late June of this year. In a collaborative effort, the two potential allies are establishing an "innovation bridge" to link defense start-ups in the United States and India, leveraging dual-use technologies from commercial sectors to drive innovation in military solutions.

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