American strategists are taken with the idea of India’s strategic potential: a large democracy with a blue-water navy and the world’s third-largest armed forces that happens to be jammed between an imploding Pakistan and an expansionist China. But a deeply dysfunctional Indian defense community has frustrated efforts to turn that potential into reality. Will the election of Prime Minister Narendra Modi last month with the strongest mandate of any Indian leader in 30 years jumpstart much-needed reforms? The answer will help determine whether India begins to fulfill its vaunted potential as a U.S. strategic partner in Asia and beyond.

On the face of it, Modi’s election augurs well for India’s defense preparedness. On the campaign trail, Modi promised a strong India able to stand up to its adversaries. He deplored what he called the then-ruling Congress party’s lack of respect for soldiers, and promised to devote his government to long-overdue military modernization.

But the list of problems he faces is a long one. The Indian defense budget has declined to less than 2 percent of the country’s GDP, the lowest in five decades. This might be tolerable if the country’s security environment had gotten appreciably better in recent years—but it hasn’t. Though India hasn’t witnessed a major terrorist strike since the carnage in Mumbai in 2008, Pakistan remains a threat, and the prospect of terrorist attacks has not gone away. As the United States draws down its troops in the region, Afghan instability is likely to be of increasing concern, and India faces on land and at sea a rapidly rising military power in China, with which the country shares a disputed 2,500-mile border.

The challenges, however, run much deeper than a lack of resources. The procurement system is broken, corruption a constant problem, and tensions between the various military services and the civilian defense bureaucracy are serious and longstanding. Politically appointed defense ministers have had little time for—and, more important, little interest in—straightening out all that ails the Indian defense effort.

The last defense minister, A. K. Antony, was so worried that corruption associated with military procurement would tarnish his image that he brought India’s acquisition process to a virtual halt. At the slightest hint of scandal, purchases would be stalled and companies blacklisted until investigations could be completed. The result: tens of billions of dollars in new equipment not acquired, with existing platforms growing outdated and more expensive to maintain.

Indians themselves point to the history of multiple on-again, off-again attempts to procure aerial refuelers, transport aircraft, and light utility helicopters. For example, even though India’s air force is replete with older (in some cases, relatively ancient) fighter aircraft like the MiG-21, there seems little urgency in replacing them. After a drawn-out bidding process, the government finally opted in 2012 to buy 126 of Dassault’s Rafale aircraft for $11 billion, but it still hasn’t finalized the contract. As a result, the full complement of Rafales probably will not enter the Indian Air Force’s inventory until well into the next decade.

Similarly, before the turn of the century, plans were approved for India to acquire 24 new diesel-electric attack submarines, both to increase the size of the submarine fleet and to replace an aging fleet. Yet it’s possible that over the next year only 9 of the current fleet of 14 attack submarines will be operational, with the rest needing overhauls—a reality reinforced by repeated accidents onboard Indian Navy submarines, including the total loss, with crew, of a Russian-made submarine last August. Yet plans to build the new submarines have been delayed time and again. Inevitably, delays mean higher costs, and, with a budget dominated by personnel expenses, this means even fewer rupees to buy needed equipment.

Already, the army is facing shortages in ammunition, field artillery, night-vision capabilities, specialized counterterrorism equipment, and antitank weapons.

Though India prides itself on its strategic autonomy, it is actually the world’s largest importer of defense equipment. Buying from abroad is an absolute necessity, given the sclerotic condition of India’s own defense industry. What India does procure domestically is overwhelmingly tied to state-owned companies and government ordnance factories. As for defense R&D, virtually all of India’s expenditures go to the state-run Defence Research and Development Organization. With little private sector involvement and a cap of 26 percent for any foreign direct investment, India has not been able to take advantage of the type of technology and expertise that Western defense giants might bring to the table. Instead, India’s military acquires homegrown tanks, armored vehicles, and helicopters that it doesn’t want or fighter aircraft, such as the Tejas, a multirole light fighter, only now being built after 30 years in development.

Compounding these difficulties is the fact that India’s defense ministry is highly rigid and largely staffed by civil servant generalists. Further, lacking the equivalent of a chief of the defense staff to force interservice cooperation, India’s military is unable to take advantage of whatever efficiencies in planning or acquisitions might in theory be possible. The convoluted state of India’s defense establishment and decision-making process amounts to an open invitation for middlemen to ply their trade and, in turn, stoke the perennial corruption.

None of this will be news to Modi’s new government. Over the years there have been a number of high-profile looks at fixing India’s defense establishment. At best, only minor progress has been made, with reform plans lagging for various reasons, the most important being a lack of interest on the part of the prime minister and a defense minister utterly unsuited to the job.

Will it be different this time around? Certainly, the Modi defense agenda is an ambitious one—some would say Herculean. Among the goals that have been bruited about: raising foreign direct investment caps in defense manufacturing; opening up procurement to the private sector; boosting military spending; creating a chief-of-defense-like post and new tri-service commands for space, cyberwarfare, and Special Operations Forces; completing India’s nuclear triad with the faster introduction of the indigenously produced, nuclear-powered Arihant-class SSBN; and uprooting the entrenched defense bureaucracy while at the same time professionalizing the higher levels of the defense ministry’s management.

Right now, the new prime minister has the public backing and majority support in parliament to move this agenda forward. Moreover, unlike some of his left-of-center predecessors, Modi appears not to believe that India has to choose between guns and butter: His campaign emphasized both economic growth and a strong defense.

But as the list suggests, many of the problems can’t be fixed with immediate infusions of money or even changes in laws. Those may help, but modifications in the culture of institutions and management require a capacity for sustained commitment that is increasingly rare in modern democracies. The natural tendency will be to adopt changes that are easy to see and produce quick results. But unless root-and-branch reforms are tackled as well, the odds of the system falling back into its old ways are high. In short, when it comes to India reaching its strategic potential, Prime Minister Modi and his government have much to do—and, uniquely, the political capital to do it.

Sadanand Dhume is a resident fellow in Asian studies at the American Enterprise Institute, and Gary Schmitt is director of the Marilyn Ware Center for Security Studies at the American Enterprise Institute.

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