 "India to be fourth biggest defence spender by 2020: IHS")
IHS Jane's Defence Budgets projects that India's defence spend will reach Rs 359,700 crore ($65.4 billion) in 2020 despite cuts announced by India's defence minister in January 2013 caused by the challenging economic and fiscal climate. This obstacle is expected to wane over the next three years, with IHS expecting India's GDP growth to recover to around 8% by 2015, allowing India to increase defence spend to recover from 2015 to 2020.
Craig Caffrey, Senior Asia-Pacific Analyst, IHS Jane's Defence Budgets, said, "The economic growth that fuelled increasing defence spend in recent years faltered in 2012 and that's what forced the government to re-visit its spending assumptions. Defence spend as a percentage of GDP is actually projected to continue to fall through to 2020, but that will still allow for significant real growth in dollar terms. We anticipate that India's defence spend will overtake France in 2016, the UK in 2018, and Japan in 2020. By the end of the decade, India is expected to be spending up to RS 95700 crore ($17.4 billion) specifically on the procurement of defence equipment each year."
Based on current projections, IHS Jane's Defence Budgets expects the Indian defence budget, including related pensions obligations, to reach Rs 305,800 crore ($55.6 billion) over the five years to 2017, with the procurement budget increasing to Rs 81,950 crore ($14.9 billion).
James Hardy, Asia-Pacific Editor, IHS Jane's Defence Weekly said, "India continues to be a major market for the international defence industry, with major investments in all three services and its strategic missile forces. While short-term budget cuts will have an effect on these procurements, India's geostrategic position and the parlous state of much of its inventory means that it will continue to invest in new fighter aircraft, attack helicopters, howitzers, submarines and aircraft carriers, to name but a few of its many programmes."