NEWS ANALYSIS

NEWS ANALYSISPresented By:Satyam Raghuvanshi (139)CHINA 3rd LARGEST DEFENCE EXPORTERChina also has fewer political complexes than rivals which means it will sell to anyone.Rapid expansion inBeijings military budgetin recent years and advanced technology have made Chinese weapons more competitive allowing China to sell more.In terms of defence imports-in view of US rising interference and regional tension, China has increased its defence import by 10% which is mainly contributed by Russia.

2013 (US $ billion)2014 (US $ billion)USA (16.43)USA (19.95)Russia (15.32)Russia (17.37)Germany (3.97)China (3.21)France (3.40)Germany (3.08)China (2.83)France (2.76)Stockholm International Peace Research Institute (SIPRI)TOP 5 DEFENCE EXPORTERSCOUNTRIESTOTAL DEFENCE EXPORT VALUE(US $ billion)PERCENTAGE OF GLOBAL ARM EXPORTSMAJOR IMPORTING COUNTRIESUSA19.95 31Saudi Arabia, UAE, Australia, IndiaRussia17.37 27India, China, AlgeriaChina3.215Pakistan, Bangladesh, MyanmarGermany3.084.8Greece, Israel, USAFrance2.764.3Singapore, Morocco, ChinaLARGEST ARMS INDUSTRY COMPANIESRankCompanyCountryArms sales (US$ billion) (2013/2014)1BoeingUnited States28.592Lockheed MartinUnited States25.27 3RaytheonUnited States23.70SAUDI ARABIA BIGGEST DEFENCE IMPORTERAs per American research company IHS (Information Handling Services) Saudi Arabia has toppled India to become the worlds top defence importer in 2014.

20132014India ($5.9 billion)Saudi Arabia ($6.4 billion)Saudi Arabia ($5.4 billion)India ($5.57 billion)UAE ($2.2 billion)China ($2.6 billion)Taiwan ($1.7 billion)UAE ($2.21 billion)China ($1.5 billion)Taiwan ($2.16 billion)WORLDS BIGGEST ARM IMPORTERS

During last 5 years period India imported arm exports worth $16.72 billion. This roughly constitute to 15% of worlds total defence import followed by China (5%) and Pakistan (4%).

SAUDI ARABIA Saudi Arabia: Record figure has been driven by unparalleled demand from the emerging economies for military aircraft and an escalation of regional tensions in the Middle East.

Top 10 countries as per defence budget 2015 (in US $) INDIAContinued abject failure to build a robust defence industrial base.Indian forces are still grappling with critical shortages in fighter jets, submarines, helicopters, howitzers, night-fighting capabilities and the like.Lack of participation from private industries.As compared to other countries India spends very less on its yearly defence budget.Decrease spending of defence budget.The Rupees steady slide against the US dollar to Rs 62 to a dollar has eroded its purchasing power considerably. Annual inflation in the international prices of weapons, ammunition and defense equipment is generally between 12 to 15 per cent.YEARRANKSPENDING% of GDP20128$47.7 billion2.520139$47.4 billion2.520148$45.2 billion1.8120159$38 billion1.75SURGE IN POWER SECTOR DEVELOPMENTSGovernment plans to setup 25 solar power parks in Gujarat, AP, UP, Meghalaya, Rajasthan.US firms to build 20, 000 MW solar capacity in India.Karnataka, AP keen to host Russian nuclear reactors.Power grid plans to invest Rs 30,000 crore in transmission.Tamil Naidu eyes over 20, 000 MW of power generation target.

INDIAS ELECTRICITY PRODUCTIONTheelectricity sector in Indiahad an installed capacity of 258.701GWas of end January 2015.

WORLD POWER PRODUCTIONIndia became the world's third largest producer of electricity in the year 2013 with 4.8% global share in electricity generation.

COUNTRYELECTRICITY PRODUCTION (GW)China564.95United States426.04India258.70Japan108.81Russia106.93INDIAS POWER SUPPLY POSITION

CHALLENGES If current average transmission and distribution average losses remain same (32%), India needs to add about135 GWof power generation capacity, before 2017, to satisfy the projected demand after losses. Of the 1.4 billion people of the world who have no access to electricity, India accounts for over 300 million.The International Energy Agency estimates India will add between 600 GW to 1,200 GW of additional new power generation capacity before 2050. The technologies and fuel sources India adopts, as it adds this electricity generation capacity, may make significant impact to global resource usage and environmental issues.PROBLEMSSubsidies provided by government have depleted the cash reserves of state-run electricity-distribution system. This has financially crippled the distribution network, and its ability to pay for power to meet the demand.Non- payment of electricity bills.Shortage of fuelsTheft of powerHigh number of ecological, environmental and rehabilitation obligations.Traditional fuel combustion (800 million people still use it) is the primary source of indoor air pollution in India, causes between 300,000 to 400,000 deaths per year and other chronic health issues.India's nuclear power generation potential has been stymied by political activism since the Fukushima disaster in Japan.GOVERNMENT EFFORTSUMPP projects- According to thePower Finance Corporation, 16 UMPPs are envisioned. The proposed doubling of green cess on coal from Rs 100 per tonne to Rs 200.Target of 1,75,000MW renewable energy capacity by 2022. Solar power is to have the lion's share of the renewable energy target at 1,00,000MW, followed by 60,000MW of wind energy, 10,000MW biomass and 5,000MW of small hydro projects of up to 25MW each.

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