Indian Navy Suffers Budget Crisis As It Plans to Expand Operations

Indian Navy’s planned acquisition of a third Indigenous Aircraft Carrier (IAC-2) is at risk of running aground. On December 3, during the annual navy press conference held in New Delhi, Chief of Naval Staff, Admiral Karambir Singh, iterated the Navy’s determination to acquire IAC-2. But the first Chief of Defence Staff, Gen. Bipin Rawat, one of whose primary tasks is to prioritise acquisitions in the three armed forces, has cited budget constraints, reports the Hindustan Times.

At his first media interaction in February, after taking over as CDS in December 2019, Gen. Rawat had asked the navy to re-evaluate priorities and hinted that if they pushed for the IAC-2, they would have to forgo the nuclear powered attack submarines (SSNs), another service priority. “[IAC-2] is a major investment. What is it that the navy [itself] will not be able to get (if it pushes for IAC-2) and what will the effect be on the army? You cannot just have one service moving ahead,” he had said. A third carrier, Rawat explained, had hidden costs, it would mean sanctions for 2,500 more crew members and their salaries, buying fighter jets (each at a cost of over Rs 1,000 crore) and buying destroyer escorts for the carrier.

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The navy rejects the binary argument and maintains that it needs both carriers and nuclear submarines. SSNs, in fact, operate as the underwater strike element of a carrier battlegroup, around which the navy’s strategy is currently centred.

The service is preparing its pitch to obtain an Acceptance of Necessity (AoN) from the government for the IAC-2 in 2021. This will be difficult if the CDS continues to oppose it and since there is no evidence of him having changed his mind, the stand-off continues.

Interestingly, the case for six indigenously-built Project 76 SSNs, displacing over 6,000 tonnes each and costing over Rs 14,000 crore each, is also pending with the government. Armed with torpedoes and cruise missiles that can strike targets on land and at sea, SSNs are powered by nuclear reactors, assuring them of tremendous speed and almost unlimited underwater endurance.

The navy currently has just one, the INS Chakra loaned from Russia, but needs at least six. Unlike the Arihant-class strategic submarines, which are separately funded by the government, the SSNs will have to be paid for from the navy’s funds, according to Times of India.

The IAC-2, though, is “non-negotiable” and the navy top brass says it will work hard to convince the CDS of the merit of the proposal. The carrier will be conventionally powered, displace over 65,000 tonnes and be equipped with the US-built Electro Magnetic Launch System (EMALS), cleared for sale to India, which means it can launch heavier multirole aircraft like the F/A-18 or the Rafale and exercise ‘sea control’ over vast swathes of ocean with its 55 aircraft and helicopters. The navy currently operates one aircraft carrier, the Russian-built INS Vikramaditya. Its second carrier, the indigenously built ‘Vikrant’, will shortly begin sea trials before being inducted in late 2021.

Carriers are reappearing in Asia thanks to the astonishing rise of China’s navy, now the world’s largest. The People’s Liberation Army (PLA) Navy’s plans to double its two-carrier fleet this decade and field six by the 2030s has sparked off concerns among other countries, including India. The 11-carrier US Navy, too, is looking at smaller carriers to expand its fleet. The Japanese are repurposing their helicopter carriers to operate fixed-wing fighter aircraft and the South Koreans plan to acquire one.

But why does the Indian Navy need a third aircraft carrier? To ensure two are always available for service, one for each coast, while the third is being repaired. It will take close to a decade to build and is expected to be in service only around 2033-35. The navy’s view is that they have done the math and they can pay for both the submarines and the carriers. The navy accounts for the smallest share of the defence budget, roughly 15 per cent. It was allocated Rs 61,890 crore in this year’s budget, of which roughly Rs 25,000 crore will be spent on capital acquisitions. Even so, funding for these projects is spread over a decade and paid for in annual instalments.

The expenditure for the SSNs and the IAC-2, says a senior navy official, will never exceed their yearly capital budget. “If a service is given a budget, then they should also be allowed to decide on force planning,” the official adds.

With two big-ticket projects coming up before the government for approval, 2021 could be a crucial year for naval planners on making their case for more funds. Early next year, it will issue Requests for Proposals (RFPs) for six Project 75I conventional submarines, or solicit commercial bids from two Indian firms, who will have to partner with one of the five shortlisted foreign submarine builders.

If the service is unable to obtain an AoN for the IAC-2, their proposal will most likely lie dormant and be resurrected by the service when budgetary times are more favourable.

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