India today said its defence expenditure will increase “in proportion” with its economic growth rate, which is expected to be 8-10 per cent for the next two decades.
“India’s defence expenditure is 2.5 per cent of its GDP and the economy is expected to grow at eight to ten per cent for the next two decades. The expenditure on defence in absolute terms is also bound to increase in equal proportion,” Defence Minister A K Antony said while inaugurating the sixth edition of the biennial Defexpo 2010 here.
India is expected to spend around $50 billion in the next 20 years for acquiring weapons for its armed forces. Antony said the increasing expenditure on defence will help the Indian industry to play a more “meaningful role” in the defence sector in the country.
Antony said the ministry will soon publish the ‘technology perspective and capability roadmap’ for the next 15 years, which will highlight the requirements of the armed forces in future and help the defence industry to prepare themselves as per the requirements. He said the offsets clause in the DPP resulted in development of India as a global outsourcing hub for global defence manufacturers.
Under the offsets clause, for any defence deal worth over Rs 300 crore, the foreign vendors have to invest 30 per cent of the total worth back into the Indian defence Industry.