India raised spending on its military by 7.8 percent to 21.3 billion dollars for the next fiscal year starting April, the government said in its budget announcement Wednesday. India's military has planned a massive upgrade of its mainly 1990s-era weapons systems, mostly from Cold War ally the former Soviet Union and subsequently Russia. The plans include the purchase of 126 new combat aircraft to replace an ageing fleet of MiG-21s.
The budget for the fiscal year starting April 1 comes as India and South Asian military rival Pakistan remain engaged in a peace process which began in January 2004 that has defused tension over disputed Kashmir, the cause of two of their three wars.
India's million-plus army, the world's fourth largest, received the lion's share of the funds.
But new arms purchases have fuelled offshore attention with US-based Lockheed-Martin's F-16 competing for the 126 multi-role fighter planes along with US rival Boeing's F-18, the Rafale made by French Dassault, the Eurofighter and the Russian-built MiG-35 and MiG-29.
The United States emerged as a potential military supplier to India after the two countries signed a landmark deal on civilian energy cooperation last year that lifted decades of arms and technology sale sanctions on New Delhi.
Under the deal, India has pledged to separate its civilian and military nuclear facilities and place the former under UN inspection. India tested nuclear weapons in May 1998, a move immediately followed by rival Pakistan.
India is Asia's biggest arms buyer and has spent billions of dollars in the past few years on purchases of planes, radar and ships from Britain, Israel, France and Russia among others.
