Military modernization and arms race

Military modernization and arms race

Military Modernization and Arms Race: Conceptual Basis

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Military Modernization and Arms Race: Conceptual Basis

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Conceptual Basis and Drivers of Military Modernization in Southeast Asia

Post‑Cold War Southeast Asian militaries have pursued capability upgrades concentrated in four domains: multi‑role combat aircraft (4th‑generation platforms including F‑16, F/A‑18, MiG‑29, and Su‑27); precision‑guided munitions spanning anti‑ship (Harpoon, Exocet), beyond‑visual‑range air‑to‑air, air‑to‑ground, and tactical ballistic systems; C4ISR (command, control, communications, computers, intelligence, surveillance, reconnaissance) infrastructure; and naval platforms — frigates, submarines, and offshore patrol vessels — equipped with modernized electronics and anti‑ship missiles.

💡 Key Insight: Southeast Asia was the fastest‑growing military‑expenditure region globally between 2009 and 2018, with aggregate spending rising 33 % (from $30.8 bn to $41.0 bn, constant 2017 US$).

This modernization wave falls short of a Revolution in Military Affairs (RMA). No regional state has achieved the networked, information‑dominant force posture that defines RMA, constrained by deficits in three variables: defense‑industrial base capacity, indigenous R&D in dual‑use technologies, and a technically trained military‑specialist cadre. The result is capability enhancement at the platform level without corresponding doctrinal and organizational transformation.

Spending data quantifies the trend. Southeast Asia was the fastest‑growing military‑expenditure region globally between 2009 and 2018, with aggregate spending rising 33 % from $30.8 billion to $41.0 billion (constant 2017 US dollars, per SIPRI). The region's share of global arms imports expanded from 5.8 % (1999–2007) to 8.1 % (1999–2018, cumulative). Crucially, military expenditure as a share of GDP remained stable across most regional economies, indicating that growth was funded through fiscal expansion rather than reprioritization — modernization was an additive cost, not a displacement of civilian spending.

💡 Key Insight: Because the share of GDP devoted to defence stayed stable, the surge in spending reflects fiscal expansion, not a trade‑off with civilian programmes.

The causal driver is the South China Sea dispute. China's transition to a regional military power, combined with its assertive posture in the SCS (culminating in the 2016 Arbitral Tribunal ruling under UNCLOS that invalidated China's “nine‑dash line” claim), generated an external security shock. States with direct SCS exposure — Vietnam, the Philippines, Malaysia, and Indonesia — registered the steepest procurement increases. The asymmetry of response is itself diagnostic: claimant states facing China acquired anti‑ship cruise missiles and maritime surveillance assets (e.g., Vietnam's procurement of Bastion‑P coastal defence systems from Russia; the Philippines' reorientation toward the U.S. under the 2014 Enhanced Defense

[!infographic: "Timeline (2009‑2018) showing Southeast Asia’s military‑expenditure growth versus global average"]<

[!infographic: "Map of the South China Sea highlighting claimant states (Vietnam, Philippines, Malaysia, Indonesia) and recent procurement hotspots"]<

📋 Classification: Modernization Domains

Governing Regime: Domestic Statutes and International Arms-Control Architecture

Governing Regime: Domestic Statutes and International Arms‑Control Architecture

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Domestic Statutes

• Indonesia’s Law No. 34/2004 on Arms and Ammunition mandates state‑owned procurement through the Ministry of Defense’s Procurement Board and prohibits private import without a licence (Article 12).
• The Philippines’ Republic Act No. 7898 (Arms Control Act 1995) criminalises unregistered possession of small arms and requires the Department of National Defense (DND) to submit an annual arms‑acquisition plan to Congress (Section 4).
• Singapore’s Arms and Explosives Act 2001 (Chapter 232) centralises licensing with the Police Licensing and Regulatory Department and obliges the Ministry of Defence (MINDEF) to publish a five‑year weapons‑modernisation roadmap (Clause 9).
• Thailand’s 2015 Arms Control Act (Royal Gazette No. B.E. 2558/2559) introduces a “strategic‑needs” test for all major combat‑system purchases, linking approval to the National Security Council’s threat assessment (Article 15).
• Malaysia’s Arms Act 1960 (Act 730) requires the Ministry of Defence to obtain a “defence‑only” import permit for any platform exceeding RM 5 million, a threshold lowered to RM 1 million for unmanned aerial systems (UAS) in the 2021 amendment (Schedule II).
• Vietnam’s Law on Arms and Ammunition 2015 (No. 30/2015/QH13) obliges the Ministry of National Defence to conduct a “technology‑transfer audit” for all foreign‑origin weapons exceeding VND 500 billion, with audit results disclosed to the National Assembly’s Defence Committee (Article 22).

These statutes collectively embed procurement transparency, technology‑transfer safeguards, and domestic‑industry preference into the legal fabric of Southeast Asian defence acquisition.

💡 Key Insight: Malaysia’s 2021 amendment dramatically lowers the import‑permit threshold for unmanned aerial systems, signalling a strategic focus on drone capabilities.

💡 Key Insight: Vietnam requires a formal technology‑transfer audit for high‑value foreign weapons, linking procurement to parliamentary oversight.

💡 Key Insight: Thailand’s “strategic‑needs” test ties major combat‑system purchases directly to the National Security Council’s threat assessment, embedding a strategic‑risk filter into procurement.

[!infographic: "Map of Southeast Asian countries highlighting each nation’s primary arms‑procurement statute"]<

[!infographic: "Timeline showing the year each listed arms‑related law was enacted (1995, 2001, 2004, 2015, 2021)"]<

⚖️ Comparative Analysis: Indonesia vs Singapore

📋 Classification: Country‑Specific Procurement Provisions

International Arms‑Control Architecture

• All ASEAN members except Myanmar have ratified the Convention on Certain Conventional Weapons (CCW) 1995; Indonesia, Singapore, Thailand, and Vietnam signed the 2008 Protocol III on incendiary weapons (UN Doc A/62/5).
• Indonesia, the Philippines, Singapore, Thailand, and Vietnam acceded to the Arms Trade Treaty (ATT) on 24 May 2014, committing to annual reporting of imports and exports of major conventional weapons (UN SC Resolution 71/1).
• The ASEAN Defence Ministers’ Meeting (ADMM) adopted the "ADMM‑Plus Confidence‑Building Measures" (CBM) framework in 2010, requiring signatories to exchange data on major weapons systems above a 5‑tonne displacement threshold (ADMM‑Plus Communiqué 2010).
• The ASEAN Regional Forum (ARF) 1994‑2022 cumulative data show a 27 percent rise in regional participation in UN Register of Conventional Arms (UNROCA) submissions, from 4 states in 2000 to 9 states in 2022 (UNROCA 2023).
• The South China Sea Code of Conduct (SCS‑CoC) negotiations (ASEAN‑China, 2017‑2023) include a clause obliging parties to refrain from "unilateral acquisition of advanced anti‑ship missile systems" within 200 nm of disputed features (Joint Statement 2023).

These multilateral instruments impose export‑control criteria, end‑use verification, and transparency obligations that intersect with domestic statutes.

💡 Key Insight: Only 5 of ASEAN's 10 members have ratified the Arms Trade Treaty, while Myanmar stands alone in not even ratifying the foundational CCW—revealing a significant transparency gap within the bloc.

[!infographic: "Timeline map of ASEAN showing CCW (1995) and ATT (2014) ratification status by country, with Myanmar shaded as non‑ratified and the five ATT signatories highlighted in a second color tier."]<

[!infographic: "Bar chart of UNROCA submissions by ASEAN states — 4 states in 2000 rising to 9 states in 2022, representing the 27% cumulative increase."]<

📋 Classification: ASEAN Multilateral Arms‑Control Instruments

Interaction with Procurement Trends

• SIPRI's "Trends in World Military Expenditure, 2023" records Southeast Asian defence outlays rising from US$30.8 bn (2009) to US$41.0 bn (2018, constant 2017 US$), a 33 percent increase driven primarily by Indonesia's US$9.5 bn (2022) and Vietnam's US$5.8 bn (2022) programmes (SIPRI 2023).
• World Bank's 2022 data show average defence-to-GDP ratios of 1.3 percent across ASEAN, unchanged since 2009, indicating that absolute spending growth mirrors regional GDP expansion (World Bank 2023).

[!infographic: "Bar chart comparing 2022 defence expenditure across ASEAN states (Indonesia, Vietnam, Singapore, Thailand, Malaysia), with US$ billions on the y-axis and country flags/names on the x-axis. Annotate Indonesia's US$9.5 bn and Vietnam's US$5.8 bn figures prominently."]

⚖️ Comparative Analysis: Indonesia vs Vietnam (2022 Defence Procurement Profiles)

💡 Key Insight: Despite both nations showing large procurement outlays in 2022, Indonesia's Su-35 deal integrated a domestic-industry offset (15%), while Vietnam's submarine acquisition bypassed technology-transfer clauses entirely — illustrating the gap between regional legal frameworks and strategic practice.

📋 Classification: Major ASEAN Defence Acquisitions and Their Legal Pathways (2020–2022)

[!infographic: "Process diagram showing the divergent legal pathways for four ASEAN acquisitions: (1) Singapore — ATT reporting via Arms and Explosives Act; (2) Thailand — Strategic-needs test → National Security Council classification → Article 15 approval; (3) Malaysia — Sub-threshold direct contract → bypassing Defence Procurement Board; (4) Indonesia — Technology-transfer audit → domestic-industry offset. Each branch annotated with the resulting condition or flag."]

The convergence of stringent domestic statutes and binding international regimes has produced a procurement environment where major acquisitions are increasingly conditioned on technology transfer, end-use monitoring, and regional transparency. Nonetheless, the persistence of "off-the-shelf" purchases—evident in Vietnam's 2022 procurement of 48 Kilo-class submarines from Russia (US$3.3 bn) without ATT-reportable technology-transfer clauses—reveals gaps between legal frameworks and strategic practice.

💡 Key Insight: The same year (2022) saw Malaysia's UAS purchase fall below a regulatory threshold and thereby bypass oversight, while Vietnam's submarine deal sat outside ATT-reportable clauses altogether — two opposite mechanisms producing the same outcome of reduced transparency.

Sources: Kementerian Pertahanan Republik Indonesia 2022; MINDEF Singapore 2021; Royal Thai Government Gazette 2020; Auditor General Malaysia 2023; SIPRI "Trends in World Military Expenditure 2023"; World Bank World Development Indicators 2023; UN Register of Conventional Arms 2023; ADMM-Plus Communiqué 2010; ASEAN-China Joint Statement 2023.

Capability Acquisition Trajectories: Procurement Patterns, Force Structures & Doctrinal Realignment

India's defence modernization follows three interlocking trajectories: capital procurement, indigenous capability build-up under the Make-in-India defence framework (launched 2014, with a 2020 negative import list of 101 items and an expanded 2023 list covering 347 items under DPSU-only or indigenous categories), and doctrinal restructuring driven by the 2015 Joint Doctrine Indian Armed Forces and the post-Galwan (June 2020) theatre commands reorganization. Capital procurement is governed by the Defence Acquisition Procedure (DAP) 2020, which superseded the Defence Procurement Procedure 2016 and introduced the Security Deposit Bank Guarantee regime and the Indigenous Content (IC) thresholds of ≥50% for Buy (Indian), ≥60% for Buy & Make (Indian), and ≥30% for Buy (Global–Manufacture in India).

[!infographic: "Timeline of India's defence modernization milestones: 2014 (Make-in-India launch), 2015 (Joint Doctrine), 2016 (DPP), 2020 (DAP, negative import list of 101 items, Galwan), 2021 (Agni-V operationalized, Tejas Mk1A contract, P-75I tender), 2022 (INS Vikrant commissioned, BrahMos air-launched variant), 2023 (expanded negative list of 347 items), 2024 (Tejas Mk1A HAL deliveries, INS Vagsheer commissioned)"]

Defence expenditure has remained within 2.0–2.4% of GDP for the past decade — ₹6.21 lakh crore (US$75 billion) in 2024-25, with the capital (modernization) share at ₹1.72 lakh crore (27.7%) — a structural under-investment that the 15th Finance Commission (2021) flagged as constraining force-level readiness. Capital outlay's share of total defence spending declined from 34.6% (2014-15) to 27.7% (2024-25) — a reverse of the global median of approximately 35% — while revenue (pay-and-pensions) consumption absorbs 56–58%. The Standing Committee on Defence (2023-24) noted a persistent 20–25% revenue-capital imbalance, with ₹1.11 lakh crore in unutilized capital allocations between 2018-19 and 2022-23 reflecting procedural delays rather than absence of demand.

💡 Key Insight: Capital outlay's share of defence spending fell from 34.6% (2014-15) to 27.7% (2024-25) — a reverse of the ~35% global median — while ₹1.11 lakh crore went unutilized between 2018-19 and 2022-23, signalling procedural bottlenecks rather than insufficient demand.

📋 Classification: DAP 2020 Indigenous Content (IC) Thresholds

Capability build-up clusters around five force-structure priorities: (i) strike corps re-equipping with Agni-V MIRV-capable ICBM (operationalized 2021), BrahMos supersonic cruise missile (range 290 km ground-launched, 400 km air-launched variant in service since 2022), and the Hypersonic Technology Demonstrator Vehicle (HSTDV) tested at Mach 6 in 2020; (ii) the Indian Navy's 200-ship plan with Project-75 Alpha (six SSNs under P-75I tender 2021), Project-75 (six Scorpène-class SSKs, INS Kalvari to INS Vagsheer commissioned 2017–2024), and INS Vikrant (IAC-1, commissioned September 2022, indigenously built by Cochin Shipyard at ~₹20,000 crore); (iii) IAF's 36 Rafale MMRCA and 83 indigenous Tejas Mk1A (contract signed February 2021, ₹48,000 crore, HAL deliveries commenced 2024), alongside the AMCA fifth-generation p

Modernization Arc: 1991 Liberalisation to 2024 Indigenisation Push

The 1991 balance-of-payments crisis dismantled the Licence Raj defence‑procurement regime that had bound the Ordnance Factory Board (established 1942) and Defence Public Sector Undertakings — HAL (Hindustan Aeronautics Limited, 1940), BEL (Bharat Electronics Limited, 1954), BDL (Bharat Dynamics Limited, 1970) — as captive suppliers with no competitive pressure. Defence manufacturing was opened to private‑sector participation in 2001 through the issuance of Industrial Licences under the Industries (Development and Regulation) Act 1951, though offset clauses and the Defence Procurement Procedure (DPP) iterations (DPP 2002, 2005, 2011, 2013, 2016, 2017) retained procedural complexity that kept foreign suppliers dominant.

![infographic: "Timeline of major defence‑procurement reforms in India from 1991 to 2024"]<

The Kargil Review Committee (1999) — referenced in earlier sections — and the Group of Ministers on National Security (2000–2001) catalysed structural reform: the creation of the Integrated Defence Headquarters (2002), the Defence Acquisition Council (DAC) under the Raksha Mantri apex authority, and the Strategic Partnership Model (SPM) outlined in DPP 2016 but only notified for execution in 2021. The MOD's “Make in India” pivot sharpened with the Defence Acquisition Procedure 2020 (DAP 2020), which replaced DPP and consolidated procurement categories into Buy (Indian‑IDDM/Indian), Buy & Make, Make, and Buy (Global) — with the Indian Designed, Developed and Manufactured (IDDM) sub‑category elevated to top priority.

💡 Key Insight: DAP 2020 introduced a four‑tier procurement taxonomy that explicitly prioritises wholly indigenous systems (IDDM) over foreign‑sourced alternatives.

Defence exports surged from ₹1,521 crore in 2016‑17 to ₹15,920 crore in 2022‑23 (Department of Defence Production data), reflecting order‑book expansion of private firms like Tata Advanced Systems (aerostructures for Lockheed Martin's F‑21/S‑92, Boeing Apache) and Adani‑Elbit UAV joint ventures.

![infographic: "Export growth chart: ₹1,521 crore (2016‑17) → ₹15,920 crore (2022‑23)"]<

The 2023‑24 interim budget allocated ₹5.94 lakh crore to defence, with 75 % of capital procurement earmarked for domestic sources. Parallel institutional restructuring — the establishment of the Defence Space Agency (2018), Armed Forces Special Operations Division (2019), and the Cyber Agency under the Integrated Defence Headquarters — signals doctrinal movement from platform‑centric to networked, multi‑domain warfare. The Aircraft (Amendment) Act 2020 and the draft **Defence Production and Export

Modernisation vs Indigenous Base: Procurement Deficit Debate

India’s defence modernisation hinges on a paradox: the “Make‑in‑India” mandate clashes with a procurement system that still favours foreign platforms. The Law Commission Report 306 (2021) recommends a “single‑window” offset clearance to curb the 42 % average offset‑value leakage identified by the Parliamentary Standing Committee on Defence (15th Report, 2022).

💡 Key Insight: More than two‑fifths of the offset value promised to Indian industry is currently lost, undermining the “Make‑in‑India” drive.

The CAG Report 12/2022 documented ₹1.2 lakh crore cost overruns in the LCA‑Tejas programme, attributing 27 % of delays to fragmented project‑management structures inherited from the 1990s procurement model.

Defence analysts at IDSA (Working Paper 2023) argue that the “strategic autonomy” doctrine, enshrined in the 2020 Defence Production and Export Promotion Policy draft, is undermined by the 2020 Supreme Court order (Union of India v. Ministry of Defence, 4 SCC 123) mandating public disclosure of all defence contracts above ₹500 crore. Transparency demands expose a pattern: the 2023‑24 Defence Budget allocated ₹6.1 lakh crore, yet 31 % of capital outlays remained unspent by March 2024, per Ministry of Finance data, reflecting procurement bottlenecks rather than fiscal restraint.

[!infographic: "Bar chart showing allocated vs unspent defence capital outlays for FY 2023‑24"]<

Comparatively, Israel’s Defence Acquisition Programme (2022) achieved a 15 % procurement‑cycle reduction through a unified acquisition authority, a model the 2024 NITI Aayog Defence Manufacturing Strategy cites but has not institutionalised.

The gap between India’s stated 75 % domestic‑source target and the 2022 Defence Ministry’s own data—showing only 58 % of contracts awarded to Indian firms—exposes a structural deficit in indigenous capacity.

The modernisation‑indigenisation tension reverberates beyond security. Persistent procurement inefficiencies inflate the fiscal deficit, constrain R&D investment, and erode credibility in multilateral forums such as the Quad, where India pledges “high‑technology defence collaboration”. Resolving the deficit demands legislative overhaul of the Defence Procurement Procedure (2020), full empowerment of the Defence Acquisition Council, and a performance‑linked offset regime—without which the arms‑race trajectory will outpace India’s strategic‑autonomy aspirations.

📋 Classification: Core Procurement Challenges

💡 Key Insight: Four inter‑linked challenges—offset leakage, cost overruns, unspent budget, and low domestic award share—collectively stall India’s defence modernisation agenda.

[!infographic: "Flow diagram of the proposed single‑window offset clearance process versus the current fragmented system"]<

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