India is expected to increase annual defense expenditure by at least 10 percent to pay for a modernization program, military experts said.
India, one of the world's biggest arms importers, is looking to wrap up a long running deal this year to buy six submarines from France and advanced rocket launcher systems from Russia, despite the lessening of tensions with nuclear rival Pakistan.
New Delhi has also sought bids for 126 new combat aircraft for its accident-prone air force, and this week, it hosted a US team making a presentation on the expensive Patriot anti-missile system - a move that has triggered alarm bells in Pakistan.
``We are in the middle of a modernization program, and you would expect the government to sustain it,'' said Uday Bhaskar, who heads the government-funded Institute for Defense Studies and Analyses. ``There would be a modest increase in the budget.''
Finance Minister Palaniappan Chidambaram, who will present the budget for 2005-06 Monday, set defense expenditure at 770 billion rupees (HK$137.37 billion) last year - a rise of nearly 17 percent compared with the previous year.
India's defense bill, which is running at more than 10 times the amount it spends on health and education, has been rising since the previous Hindu nationalist-led coalition embarked on a huge program to re-equip the world's fourth-largest military.
Before leaving office, the Bharatiya Janata Party-led coalition, which carried out nuclear explosions in 1998, clinched a string of big-ticket arms deals aimed at rebuilding the 1.3-million-strong military after years of neglect.
It ordered Phalcon airborne radar systems from Israel in a deal estimated at US$1.1 billion (HK$8.6 billion) that would enable the air force to pry deep into Pakistani air space.
New Delhi also signed a US$1.5 billion deal with Russia for an old aircraft carrier to ensure the navy was a key player in the Indian Ocean with an edge over China.
It also ordered 66 trainer aircraft from Britain after 15 years of on-off negotiations.
``Some of the money has been paid for in these contracts, much more has to be paid as we take deliveries,'' a Defense Ministry official said, adding that some would be reflected in the budget.
Indian defense planners have begun reducing dependence on Cold War ally Russia for weapons and turned to Israel, South Africa and, in the last couple of years, the United States. ``We are trying to change the mix, to stop the Russians from taking us for a ride,'' strategic affairs analyst Jasjit Singh said.
More than 70 percent of India's military hardware is of Soviet origin.