.jpg "The Loss of India: The war in Ukraine is depriving Russia of its largest arms market, which it will be unable to replace")
The Loss of India: The war in Ukraine is depriving Russia of its largest arms market, which it will be unable to replace
The war in Ukraine and the associated breakdown of economic relations with the West will lead to the loss of a number of export niches on the world market that Russia inherited from the USSR and successfully maintained in the post-Soviet period. One such niche is defence supplies to India, which has relied almost entirely on Soviet and Russian arms since the 1960s. New Delhi began to diversify its arms imports a decade ago. Two factors contributed to this: the sanctions imposed on Russia after the annexation of Crimea, and the fact that the Russian military-industrial complex has failed to modernise its line of weapons. Deliveries of more advanced and technologically advanced samples ended up being of poor quality. Following the full-scale invasion of Ukraine, the disruption of deliveries became crippling as the Russian military-industrial complex switched to servicing the front, and new, broader sanctions against Moscow made any further military cooperation futile.
The withdrawal of any Russian arms that Moscow is still capable of providing to New Delhi will take place gradually, as India finds replacements for them. However, it is already clear that Russia's place is being taken by France, which is not only capable of replacing Russian supplies but also shares strategic interests with New Delhi in the Indian Ocean. While Russia, increasingly dependent on China, is proving to be an unacceptable partner for rival India on such a sensitive issue. Although the scale of this loss is not comparable to the loss of the European market for Russian gas exports, these revenues are extremely important for Moscow because they constitute a significant part of Russia's non-resource exports, which are not dependent on the volatility of the oil and gas market. In addition, the loss of such a large and important market segment will affect all Russian arms exports and will permanently relegate Russia to the second division of the world's arms exporters.
Half a century of arms friendship: from ups to downs
According to Indian Defence News, in recent years, Russian arms exports to India have fallen sharply: the share of Russian weapons in Indian imports has halved from 76% in 2009-2013 to 36% in 2019-2023, the first decline since the 1960s. According to experts at the American Air University (AU), India's dependence on arms exports from the USSR began to develop in the late 1950s under the influence of the anti-colonial views of then Indian Prime Minister Jawaharlal Nehru and against the backdrop of the emerging US-Pakistan alliance, as well as amid deteriorating relations between New Delhi and Beijing, with which the USSR had been in conflict since the 1960s.
The volume of military-technical co-operation between the countries had been growing ever since, but Russian arms exports to India reached their peak in the 21st century. While in 1991-2001 Russia supplied India with $7.7 billion worth of arms, in 2001-2010 this was worth $17.3 billion, and in 2011-2021 it reached $22.8 billion, says the Indian research centre Observer Research Foundation. This is almost twice as much as India imported from the US, UK, Israel and France combined ($13.5 billion) during the same decade. The share of Russian-origin weapons in the Indian Army, according to experts' estimates, has grown to 85%. More than 90% of armoured vehicles, 69% of combat aircraft of the Air Force and Navy, 44% of submarines and naval warships in Indian service are Russian, according to The Foreign Policy.
New Delhi decided to reconsider military-technical cooperation with Moscow after the occupation of Crimea and the outbreak of war in Donbas in 2014, according to War on the Rocks. As a result of sanctions, Russia has lost access to foreign technology and parts produced in Ukraine, including helicopter and gas turbine engines. This led to delays in major projects, including the Krivak-class frigates being built for India, which used gas turbine engines from Ukraine's Zorya-Mashproekt plant. After the occupation of Crimea, Zorya-Mashproekt refused to fulfil the contract, and the unfinished frigates were handed over to India, which was forced to directly enter into an agreement with the plant for their installation.
New Delhi has also become displeased with the decline in the quality of Russian armaments, which experts attribute to insufficient investment in R&D by Russian military-industrial complex enterprises due to financial difficulties. In 2018, India withdrew from a joint project with Russia to develop the Su-57 fifth-generation fighter: according to transcripts of meetings between representatives of the country's Air Force and Defence Ministry leaked to the Indian media, experts called the aircraft too expensive, poorly designed and equipped with unreliable engines. New Delhi lost $295 million to the project. In 2010, India purchased 45 MiG-29K fighters worth more than $2 billion from the Russian Federation, but according to the Indian press, the audit revealed numerous faults in the purchased aircraft and problems with their operation. Between 2018 and 2022, five of these machines crashed during non-combat sorties.
The war and its aftermath
The war in Ukraine and the subsequent severing of Russia's economic ties with the West have not only worsened the terms of trade with Russia, but also led to a complete collapse of trust in Russian arms. This has forced India to reassess whether Russian-made arms can be considered an affordable alternative to more expensive Western-made weapons. Swasthi Rao, an expert at the Institute for Defence Studies and Analyses, told Politico that India was surprised by the ease with which Patriot systems intercepted hypersonic Kinzhal missiles, as well as the high level of vulnerability of Russian ships and aircraft.
Furthermore, the tough sanctions on Russia, as well as the need to prioritise sending manufactured weapons to the frontline, has meant that Moscow has been unable to fulfil some of its contractual obligations to India. The Indo-Russian Rifles Private Limited (IRRPL), a joint venture inaugurated in India with the Russian Federation in 2021 to produce Kalashnikov AK-203 assault rifles with 100% localisation of production, failed to deliver the first batch of about 5000 rifles to the Indian army by March 2024, as reported by the independent Indian publication The Wire. India's Ministry of Defence was forced to approve the purchase of an additional 73,000 Sig Sauer SIG716 Patrol rifles from the US for 8.4 billion rupees (more than $100 million).
India purchased five S-400 Triumf S-400 air defence systems from Russia under a $5.5 billion contract signed in 2018, but two of these are yet to be delivered. According to some Indian generals, the loss of the S-400s in Crimea due to Ukrainian strikes has reduced India's chances of finalising the deal, The Wire writes. India expects Russia to deliver four more stealth frigates, two of which should have been handed over by 2024 (the delivery did not take place) and two more to be built at India's Goa Shipyard Limited using Russian licences and technology. A $3.3 billion deal scheduled for 2025, involving a ten-year lease of a Russian Project 971 Shchuka-B nuclear submarine to India, is close to being cancelled as a result of Western sanctions. New Delhi has voluntarily abandoned plans to purchase 48 Mi-17V-5 military transport helicopters and has also suspended negotiations with Moscow on acquiring 10 Ka-31 early warning and control helicopters due to payment issues and concerns about Russia's ability to deliver, notes Foreign Affairs.
A separate difficulty for New Delhi is making payments on contracts already signed. To circumvent SWIFT restrictions, Russia and India agreed to restore trade in rupees and rubles, but this has left billions of rupees stuck in Russian exporters' Indian bank accounts. In 2023, India had accumulated debts to Russia worth about $3 billion for military equipment and spare parts for supplied operational equipment, leading Moscow to suspend defence lending to New Delhi, according to The Wire's sources in India's defence sector.
Moreover, Politico notes that India is being pushed to discontinue cooperation with Russia due to Moscow's growing isolation and New Delhi's reluctance to spoil relations with Washington. Nandan Unnikrishnan, an expert at the Observer Research Foundation, ruled out the possibility of new major military contracts with Russia, and one of the high-ranking generals of the Indian army anonymously told The Wire that military-trade relations between India and Russia ‘are in their final phase’. According to the publication, India is not considering Russian offers at all as part of its recently planned large-scale programme to upgrade and procure multi-role fighter jets.
Change of division
As noted by War on the Rocks, the war in Ukraine has left India facing a strategic choice of three alternatives: remain dependent on Russian weapons, seek new arms suppliers, or develop its own production. In the long run, New Delhi appears to have opted for a combination of the latter two options. India spent nearly $14 billion on military purchases last year, with 75% of that spending made on the domestic market, reflecting the country's desire to become self-sufficient in arms development and production, according to SIPRI’s annual review of military spending. India remains the 4th largest defence spender in the world ($83.6 billion, which is an annual increase of 4.2% and 44% over the past decade).
Paris is gradually taking Moscow's place as the leading arms exporter to the Indian market. According to the Observer Research Foundation, French defence exports to India exceeded $2.1 billion by 2021, while Russian defence exports were less than $1.4 billion, i.e. one and a half times lower than the annual average for the previous ten years. According to SIPRI, France's defence exports to India grew almost six times (by 489%) in 2018-2022 compared to the period 2013-2017. According to Shiv Bhagwan Saharan, an expert at Jawaharlal Nehru University's School of International Studies, France, which retains a large number of overseas territories in the Indian and Pacific Oceans, sees India, which has the most powerful navy in the region, as a key partner. In addition, Politico notes that France's transfer of arms and military technology to India is not burdened by serious bureaucratic difficulties (unlike, for example, US defence exports). Following Indian Prime Minister Narendra Modi's visit to Paris last year, India and France have developed the comprehensive Horizon 2047 strategic partnership roadmap, pledging to expand defence cooperation. In January 2024, following French President Emmanuel Macron's visit to New Delhi, the two sides agreed to implement a ‘Defence Industry Action Plan’ that prioritises joint design efforts.
In the short to medium term, India will rely heavily on weapons procured from Russia, according to a report by the US Congressional Research Service. The Indian Army's tank fleet consists predominantly of Russian-made T-72M1 (66%) and T-90S (30%) vehicles, the Indian Navy's only aircraft carrier is the Russian-purchased and refurbished Vikramaditya, 71% of the Indian Air Force's attack aircraft fleet is made up of Russian-made aircraft, and all of its six refuelling aircraft are Russian-made Il-78s. A complete breakdown in military cooperation at such a level of dependence would put New Delhi in a vulnerable position, the report states. However, India's strategic course towards freezing military cooperation with Russia is also evident to Moscow. The visit of the country's foreign minister Subramanyam Jaishankar to Moscow in December 2023 brought no news about planned deals, or the timing of the implementation of agreements already reached and the resolution of non-payments, The Wire has noted. Russian minister Sergei Lavrov said Russia ‘respects’ India's desire to diversify its arms imports.
As Re:Russia has previously written, the war in Ukraine has led Russia to irreversibly lose its niche in the international arms market: in the last five years, Russian exports have been half of what they were in 2014-2018, and 2023 sales were half the level of 2022. This will be a significant loss for the Russian economy due to the fact that arms exports are a notable part of Russia's non-resource exports, and they are not dependent on the conditions of the commodity market and therefore play an important role in periods of declining commodity prices. In addition, the loss of the large and significant Indian market will be the final milestone in changing Russia's position in the global arms market, moving it from among the elite of the world's defence exporters to the second division. In the near future, Russia’s niche will be filled by France, Italy and Turkey.