How India emerges as a formidable player in defense

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India is already the important weapons importer of the world, but that does not prevent the country from strengthening its defense capabilities. Nueva Delhi plans to spend around $ 200 billion on The next 10 years by transforming and modernizing its army.

This raises an important question: why is India hurried to duplicate weapons and combat planes? One would think that he is Pakistan, the country’s neighbor and the rival of a lifetime. However, foreign policy analysts say that the trigger is east of India, specifically, China.

Maya geopolitical tensions, skirmishes on the border between India-China and the high presence of Beijing in the Indian Ocean have contributed to the search for India to reinforce its defense. India and China are also locked in a technological rivalry that experts, according to experts, have contributed to the growing tensions between the two asian Asian nations.

“China’s expansionist policies and military accumulation along the border are still a serious challenge,” Pravin Krishna, a professor of international economy at Johns Hopkins University, told CNBC.

The high presence of Beijing around the subcontinent waters is the most pressing concern.

“China has declared that the Indian Ocean is not the Ocean of India,” he told CNBC at Pal de Pamit Chaudhuri, head of practice of southern Eurasia Group.

Chaudhari added that according to the intelligence of the Indian Navy, China is building carrier, two of which will be deployed in the Indian Ocean. Beijing also has a complete naval base in Djibouti, a country in the east of the African continent, where it carries out Navy drills.

Renewed relationships between the United States

In this context, the Prime Minister of India, Narendra Modi, met with the president of the United States, Donald Trump, in the White House Two weeks ago where the two leaders confirmed the efforts to strengthen the defense ties of the United States-India.

Modi also signed India until Buy more US defense equipment.including additional heavy armored vehicles, drones and combat planes.

“It is extraordinary that, less than a month after the new Trump administration, the United States and India can announce such a broad set of actions in the defense sector,” said former United States ambassador to India Kenneth I. Juster to CNBC in an email.

The acquisition of US defense teams is also a way in which New Delhi can reduce the growing commercial deficit between the United States and India, seen as a key to maintaining good relations with Trump.

Boeing He has captured most of American foreign military sales to India since 2017, according to Cowen Washington Research Group, a research arm in the TD Cowen investment bank. Trump too offered India access to Supersonic Lockheed Martin F-35’s combat aircraft of Lockheed Martin.

India is not technically eligible for F-35 since the country is not a formal military ally of the United States and is currently a buyer of Russian teams.

If Trump makes an exception, analysts say it would be a great victory for India, although others are difficult to see that this happens. According to Reuters, India’s Foreign Secretary, Vikram Misri He told reporters earlier this month That the American offer to sell F-35s was in a “proposal stage”, adding that the acquisition process had not begun.

“We believe there will be some challenges to complete the sale given the use of Russian military systems in India,” said Roman Schweizer, an aerospace and defense policy analyst at Cowen Washington Research Group, CNBC by email.

Playing up to date with China

Regardless of the result of the F-35 agreement, India’s defense expense is expected to remain robust. In general, JPMorgan He estimates that the capital expenses of India in defense will grow by 8% each year between 2024 and 2026.

“The growth in the Indian defense capex is driven by its own geopolitical and security considerations,” Atul Tiwari, infrastructure, industrial and utilities in JPMorgan, to customers in a note on Monday, wrote to customers.

However, experts argue that India still has a long way to go to catch up with her main rival, China. According to official numbers, China’s military and defense budget is currently three times the size of India and grows at a fast pace, according to Eurasia.

Capacity limitations in the US could also complicate India’s plans to double the United States defense team.

“The limited investment in manufacturing … means that the United States Industrial Defense Base faces extended capacity and deadlines of delivery. New York -based emerging market, said CNBC.

Lead to self -sufficiency

Hariharan added that over time, the pressure will grow in India to be more self -sufficient because it already faces internal tensions between the desire to buy weapons from the United States and the policies of “doing in India” of the government that prioritize national production. Hindustan aeronauticsBharat Electronics and Zen Technologies have become three of the biggest players in the growing defense sector of India, according to a JPMorgan note.

India has become increasingly aware of what is better to buy in foreign nations, and what equipment should be made at home.

In 2023, General Electric signed an association for co-manufacture Reaction engines with Hindust aeronautics of India. The agreement, which received the approval of the United States Congress, implied the transfer of technology to India.

The sources close to the Indian government shared that the technology transfer was an issue discussed between Modi and Trump during the recent trip of the Indian leader.

“If India can find other ways to obtain technology transfer and co -produce equipment within the country … the delivery times will accelerate,” said the source that asked not to be appointed because they were not authorized to talk about the matter.

Krishna, from Johns Hopkins University, added that over time, the desire of India is to move away from its dependence on foreign weapons and invest a lot in indigenous abilities.

India’s ambition to expand its defense capabilities and protect their nation populated with new threats could make it a more attractive partner for American and Russian companies: a dance among the competing world powers that India will have to elegantly balance.

The European Union wants India to decrease its tariffs. As part of the discussions on the Indian Free Trade Agreement, The block wants Delhi to reduce his “very high rates” In goods such as wines, spirits and cars, said a senior EU official. However, the EU has notably said that tariffs do not need to be “one for one”, since different countries experience abundant in their levels of development and face unique challenges in their economies. Ursula von der Leyen, president of the EU, will be in India from February 27 to 28 and will meet with the country’s prime minister, Narendra Modi.

Negotiations on the India-UK Free Trade Agreement are progressing well. There is only one Few remaining pending problems before the FTA could endThe Secretary of Business and Commerce of the United Kingdom, Jonathan Reynolds, said exclusively to CNBC-TV18. However, Reynolds was not to offer a specific timeline for the agreement, which according to him would be an integral agreement that covers not only goods and services, but also lower barriers for companies to operate in both countries.

Tesla courtship of India may not be soft. According to the reports, Tesla has been exploring the locations of the exhibition hall in India to start selling vehicles in the country, after a meeting between India, Prime Minister Narendra Modi and the CEO of Tesla, Elon Musk, in early February. However, the EV company has even to announce any plan to establish factories in India Despite the impulse of Modi, as its introduction of a new EV Rate policy.

Deepseek is causing an exit from Indian actions. The profitable model of the Chinese artificial intelligence company has raised the feeling in the Chinese market, with a meter of the shares on land and high seas of the country that rise more than 26% since its minimum of January. The money has to come from somewhere: most of the time, it is DESTICTED FROM ITS COMPETIATOR OF INDIA Emerging Markets. The subcontinent deceleration economy is also contributing to the strong correction of its stock market in recent months.

Indian actions continued in negative territory this week. From 12:30 pm local time on February 27, the reference point Ingenious 50 The index reduced 0.09,%, while the broader SENSEX index was flat.

The 10 -year -old Indian government bond increased slightly to 6,701%.

In CNBC TV this week, Aditya Suresh, director of the investigation of Variable of India in Macquarie Capital, said that Funds dedicated to India are quoted more defensivelyfocusing on the information technology sector and selecting pharmaceutical companies and finance, which have “assessment support”. On the other hand, there are risks in the discretionary space of the consumer and in the industrial segment due to high profit expectations.

Meanwhile, after the launch of Deepseek, the The approach to the artificial intelligence space has changed to software offersAccording to Kunal Vora, director of BNP Paribas and Chief of Equity Research of India. “Indian companies can play a very important role there,” Vora said, particularly because Indian rupee is depreciating, which would make it cheaper for buyers abroad.