It was a tough week for Indian shares as the BSE Sensex fell nearly 3 percent and the Nifty lost 3.3 percent as U.S. Fed chief Bernanke’s suggestion that stimulus measures may be scaled back at one of their next few meetings dented sentiment. Here's a look at the top Sensex losers and gainers. Full Article
For months, markets have been dancing to central bankers' tune, but that may now be changing, writes James Saft. Full Article
Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
India's military build up may be too little too late?
NEW DELHI |
NEW DELHI (Reuters) - India's 1.3 million-strong armed forces, hobbled by outdated equipment and slow decision-making, are undergoing an overhaul as defence priorities shift to China from traditional rival Pakistan.
And like a refit of the imposing but dilapidated defence ministry on Delhi's grand South Block, it's a plodding process.
Defence chiefs are hurrying to modernise ageing weaponry as China reinforces a 3,500-km (2,200-mile) shared but disputed border through the Himalayas.
It took 11 years to select France's Rafale as the favoured candidate for a $15 billion splurge on 126 new combat jets to replace a Soviet-era fleet of MiGs dubbed "flying coffins" for their high crash rate.
At the same time, feeling encircled as China projects its fast-growing naval power from Hormuz to Malacca, India is rushing to firm up friendships the length and breadth of the Indian Ocean.
India is the world's largest arms importer with plans to spend $100 billion on weapons over the next decade.
"The Indian military is strengthening its forces in preparation to fight a limited conflict along the disputed border, and is working to balance Chinese power projection in the Indian Ocean," U.S. Director of National Intelligence James R. Clapper told the U.S. Senate this week.
That "balance" includes a strategic alliance with Washington that in turn has stoked Chinese fears of containment. It is due to test-fire its nuclear capable Agni V rocket in the next few weeks, with a strike range reaching deep into China.
In 2009, the air force reopened a high-altitude, landing strip in Ladakh last used during a 1962 border war with China. Along with other Himalayan bases, it is now upgrading the strip for fighter operations.
About 500 Indian MiG-21s have plunged to the ground since the 1960s, yet the jet is still in use, raising the question of whether painfully slow defence procurement procedures can come up with new hardware faster than old equipment is sent to the scrap heap.
According to Indian media, Russia delivered the nuclear submarine INS Chakra on a 10-year lease at the end of last month, eight years after India first asked for it.
A shortfall of about 200 planes means the air force is operating at its lowest level in decades - just 33 squadrons against a goal of 45. By the time all the Rafales are delivered, more MiGs will have been decommissioned.
"It's taken too long," said Jasjit Singh, a retired commander and director of the think tank Centre for Air Power Studies. "Can we live with a certain shortfall in the force, and for how long?"
India is developing a fifth-generation fighter with Russia and aims to fly it in 2015, as well as a fleet of 272 Sukhois, half of which have already been built.
From a defence perspective, India has traditionally had the upper hand over China's numerically superior air force, but rapid modernisation over the border may have flipped the balance.
Both forces are now smaller than 20 years ago, but China's has a fast-growing core of 350 advanced combat jets, including its own Sukhois. It also has a stealth fighter programme.
India's military modernisation plans are focused on the navy and air force, more than the army, which has traditionally squared off with Pakistan. But with Pakistan's air force also modernising fast, India risks losing its edge on two fronts.
In the 1980s, a scandal engulfed the government of then-prime minister Rajiv Gandhi over millions of dollars in kickbacks on artillery contracts for Sweden's Bofors.
Weapons purchases have since been a tortuous process, with rules rewritten several times to avoid graft.
"There has been a tremendous shortage of artillery systems acquisition after the Bofors scandal," said Rahul Roy Chaudhury, a South Asia expert at London's IISS security think tank.
Defence Minister A.K. Antony is known to be very cautious, with no desire to be caught up in corruption scandals that have in recent years returned to haunt the government.
On Tuesday, he made clear no deal would quickly be signed for the Rafale or any other fighters.
"MEETING OF MINDS"
The relationship between India and China is complex, involving as much cooperation as competition. But while the generals and admirals rarely say as much publicly, India fears a repeat of a brief, humiliating 1962 border war and wants to be prepared for surprises.
Seafaring officers from 14 countries from New Zealand to the Seychelles have gathered on remote Indian islands in the Bay of Bengal this week for exercises and a "meeting of minds" about maritime security.
It is one of the largest such gatherings of maritime allies that India has organised, but China and Pakistan were conspicuously not on the guest list.
Predictably, since China is also a major trading partner, India's assistant chief of naval staff, Admiral Monty Khanna, was at pains to play down China's absence.
"There are many nations that have not been invited," Khanna said in New Delhi, adding China would not be discussed at the meeting. "India and China might share a land border but we are quite distant by sea," he said.
Distant they may be, but increasingly the world's fastest-growing major economies find themselves jostling as they compete for resources, sea lanes and allies. A lack of friendly engagement increases the risk of misunderstandings.
This week's exercises are being held on the Andaman Islands, where India is spending $2 billion to set up a military command and from where the contested and congested South China Sea is only a short hop away.
Last year, India's INS Airavat, an amphibious assault vessel that sailed from the Andamans was challenged in the South China Sea by a radio caller identifying himself as an official of the Chinese navy. Both sides later played down the incident.
"The Indian navy is coy about formally engaging with the Chinese navy because it feels that, if it does, it legitimises the Chinese naval presence in the Indian Ocean," said Roy Chaudhury.
"There needs to be much more communication, especially navy to navy, because they are bumping into each other more and more."
(Additional reporting by Arup Roychoudhury in NEW DELHI and Sanjib Kumar in PORT BLAIR; Editing by John Chalmers and Ron Popeski)
- Tweet this
- Share this
- Digg this