The most eye-catching aspects of the recently released Indian defense budget are top-line growth and diminished spending for procurement. Top-line defense spending grew by 12 percent in fiscal year 2017 compared to the previous budget, making India one of the fastest-growing major defense markets in the world. However, the vast majority of that growth was generated by an increase in personnel costs, and an even bigger increase in pensions. Procurement spending actually declined. This trend of rising personnel costs and shrinking capital funds will decelerate India’s military modernization efforts.
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