April 20, 2017

Indian Navy Expected to Push for Second Aircraft Carrier Funding

The Navy is said to be willing to submit a re-prioritized procurement plan to the government to make funds available for the construction of India's second aircraft carrier. This could mean holding back on other big-ticket purchases in favor of the carrier.

"There is a lot of positivity, both from the government side as well as the Navy. I am sure within two-to-three months; we should be able to take it up, second aircraft carrier plan, with the ministry to get the funds. It is a very big-ticket item, it will have to be at the expense of things, we need to take these calls before we can go about doing it," Controller of Warship Production and Acquisition, Vice Admiral DM Deshpande said.

Finance / Defence Minister Mr. Arun Jaitley has already hinted that the Ministry will be ready within two to three months to release funds for the construction of India's next generation aircraft carrier. The proposed aircraft carrier could be one of the largest in the world.

Indian armed forces are managing procurement at low-level budgetary allocations against the projected demand for the services. “The budgetary allocations for capital acquisition have declined for the three services not only since 2015-16.

Similarly, against a projection of $21.96 billion for the capital budget in 2017-18, only $13 billion have been allocated from annual budget 2017-18 for various Services (Army, Navy, Joint staff, Air force, DGOF, R&D and DGQA). This decline in the allocation for the capital acquisition will definitely affect several procurement proposals and contracts which are to be finalized in 2017-18,” observed a parliamentary panel report on defense.

The procurement plan for capital modernization schemes may have to be reviewed and re-prioritized based on available funds, sources in the Defense Ministry said. Indian Navy has set a target to finalize the deal worth $9 billion deal including minesweepers vessels, Landing Platform Dock by end of this year while it has recently signed a deal worth $2 billion for Barak 8 missile from Israel.

The Navy will commission the country’s first indigenous 40,000-ton aircraft carrier Vikrant, currently being constructed at Kochi, by end-2018. The project has been delayed for many years and it revised the estimated cost to $2.9 billion. After decommissioning of aircraft carrier Virat, the Indian Navy is dependent on the recently acquired INS Vikramaditya (the former Admiral Gorshkov of the Russian Navy).


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