ABSTRACT
India is Armenia’s top arms supplier as of October 2024 [1]. The two have fostered the closest relations than ever before, only catalyzed by the recent wars over the contested Karabakh region. Often invisible, India introduces itself as a new player in the region, aligned with Armenia and determined to raise its partnership with the South Caucasian country to the next level. The less-known arms deal between India and Armenia struck during the two previous years reflects how the trans-regional arms trade may evoke power competition. The waning Russian grip over the South Caucasus constitutes one of them, while the Indo-Pakistani proxy conflict represents the other, with the arms deals at the very center of international and trans-regional power politics. This article examines the Indo-Armenian arms deal in light of recent wars between Armenia and Azerbaijan, which made the former’s defense needs more obvious than ever by underscoring India’s surging defense market in search of potential customers. The reasons for this unusual partnership being mutually beneficial and its potential outcomes in the near future are also discussed.
India’s Booming Defense Industry Meets Armenia’s Needs
According to the Indian Defense Ministry, defense exports have grown by 31% in the past decade [2]. These numbers reflect the success of India’s domestic arms manufacturing sector, with the top three producers being Hindustan Aeronautics (HAL), Bharat Electronics (BEL), and Magazon Docks. HAL has operated in India the longest, providing mainly for the aerospace industry, with the main domestic buyers being the ISRO, India’s equivalent for the National Space Administration, and the Indian Air Force. The company specializes in military aviation as a part of its defense branch through such projects as the development of the national multirole aircraft HAL Tejas introduced back in 2015 [3]. It also collaborates with other agents of the Indian military-industrial complex via technology sharing and active partnerships with the public military research bureaus of the Indian Defense Ministry, such as the Aeronautical Defense Agency. At the same time,Bharat Electronics is involved in the production and development of advanced electronic compounds used by land and air-based military assets. BEL is mostly known for its joint projects with Bharat Dynamics, focusing on the production of a sophisticated Akash missile system [4]. Specializing on radar, surveillance, guidance, and navigation components, Bharat Electronics maintains active participation in domestic arms manufacturing together with its national counterparts. The last-mentioned company, Magazon Docks, deals with military shipbuilding, playing a crucial role in the Indian Navy’s procurement of warships, submarines, and offshore platforms for civilian use [5]. All three companies combined have a sale totaling 6.3 billion dollars and are among the first 100 top arms-producing companies announced by the Stockholm International Peace Research Institute [2]. Yet, they represent only a fraction of India’s arms manufacturing, whereas other important corporations also have stakes in the defense sector.
What makes the Indian military-industrial complex and defense corporations operating under it more peculiar than their counterparts is the involvement of government agencies in research and development processes. In the US, for instance, where large defense companies, such as Raytheon, are involved in both the development and production processes of military hardware, direct government engagement is of a lower extent. At the same time, in India, the defense ministry has critical stakes in the initial research and development of military equipment, an example of which is the Arjun main battle tank currently in service of the Indian Army. The blueprinting and development steps of Arjun were undertaken by a unit under the Department of Defense Research and Development of the Indian Defense Ministry, while the manufacturing process was assigned to state-owned Armored Vehicles Nigam Limited. Marriage between the state and publicly owned defense companies appears to favor the former, as the defense ministry is directly engaged in the development of weapon systems that are seen as necessary to be obtained at the national level.
Nonetheless, the soaring exports of Indian weapons systems abroad do not automatically reflect a surplus of domestically produced defense hardware. In contrast to its export levels, India remains one of the world’s biggest arms importers, accounting for almost 10% of total global arms imports [6]. In recent years, several agendas have been set to empower national arms manufacturing, often with limited or even reversed outcomes. The Indian military-industrial complex suffers from persistently low production capacity and high competition from foreign vendors [7], confining local arm producers. To address the short-run drawbacks of reliance on foreign arms, India sought to diversify its suppliers to preserve autonomous foreign policy by gradually localizing its military production.
The 2022 war in Ukraine, in this context, brought an opportunity for India to divert its shipments from Russia to elsewhere and paved the way for a global increase in arms demand, which was felt by New Delhi as well. At the same time, the country found itself cornered when its historical and greatest arms exporter, Russia, decided to reduce its exports amid pressing military concerns along Ukraine’s frontlines. A reduction of the Russian arms supply to India at a time when global arms demands were soaring forced the latter to look for alternative deals, particularly with Western powers. News about the negotiations over 25 French-built Rafaele fighter jets for India’s aircraft carrier fleet came out in June 2024 [8], indicating the French as India’s top arms provider at the expense of the traditional partner Russia. The diversification of foreign arms suppliers is coupled with the enhancement of domestic arms manufacturers’ ability to produce under licensed contracts from foreign firms. The instance of such hit the headlights [9] when India announced talks with Russia to jointly produce Indian-built Su-35 fighter jets with Hindustan Aeronautics, despite attempts to pivot away from the Russian weapon systems. Nevertheless, this step appears crucial for hastening the indigenization of military hardware manufacturing. While key domains such as aerospace and missile technologies remain open for joint production projects and knowledge sharing, mainly with Russia, the Indian state is taking active steps to gradually transform its military-industrial complex into a self-sustainable one.
On the other side of the equation, we find Armenia in the quest for a foreign weapons provider. The Caucasian nation has been under heightened caution for more than two years since the eruption of the Second Nagorno-Karabakh War in 2020. Two subsequent military activities against neighboring Azerbaijan revealed Armenia’s weaknesses in this field, and the soaring need to catch up with its adversary. Under the augmented threat to security, Armenia announced its increase in defense expenditures by 20% the next year, with the share of the defense budget now corresponding to 6% of Armenia’s GDP, attributed to the leveling up of Indo-Armenian relations.
Although the two countries maintained warm relations since the breakaway of Armenia from the disintegrating USSR in 1991, the military aspect of bilateral cooperation between the two partners was lacking. A great portion of the increase in Armenia’s projected defense spending for the next year will go to various Indian-built weapon systems, including the sophisticated Akash surface-to-air missile system. Built indigenously in India with the assistance of various defense companies, the Akash SAM system was originally designed for multifront aerial defense and is capable of neutralizing maneuvering aerial targets within a range of 35 km [10]. Akash warheads can carry both conventional and nuclear payloads, granting them versatility and adaptability to changing battlefield conditions. Once deployed, the Akash SAM can target incoming enemy aircraft or ballistic missile projectiles, which adds to their importance in India’s homeland defense apparatus. Therefore, Akash SAM is one of the most technologically advanced defense products designed and manufactured domestically by India. Given the specifics of the weapons system, India was not keen on exporting such military hardware to potential customers upon its implementation in the Indian Armed Forces in 2015. Yet, the decision to expand arms exports brought Akash SAM into the spotlights, resulting in a deal struck with the Philippines, marking Akash’s first export sale in 2022 [11].
In October of the same year, news appeared on the Armenian interest in the Akash SAM systems [12]. The alleged appeal for the Indian-made weapons system from the Armenian side came two years after the latter’s defeat in the Second Nagorno-Karabakh War, which ended with Azerbaijan establishing its authority over a large chunk of the disputed territory. With its stockpiles exhausted and equipment proving ineffective compared to Azerbaijani weaponry, the decision to look for alternative arms suppliers seemed reasonable if not necessary. Traditionally, the Armenian armed forces have been considered key recipients of Russian military hardware, similar to other Caucasian post-Soviet countries. However, its eastern neighbor and post-Cold War adversary, Azerbaijan, despite having inherited a large portion of Soviet-era military equipment and bought newer Russian equipment in the past [13], is also actively seeking alternative sources of weapons, such as Turkey.
The diversification of Azerbaijani arms imports granted the country a wider range of equipment, which is allegedly more up-to-date than Armenian weaponry. The acquisition of more sophisticated weapon systems from elsewhere than Russia has given Azerbaijan substantial leverage in the battlefield. One successful example is armed UAVs or unmanned aerial vehicles, simply referred to as drones, which were purchased by Azerbaijan from Turkey and Israel. The employment of the Turkish Bayraktar TB-2s [14] and Israeli UAVs during the 2020 war underscored the weak points of Armenian air defenses, while providing Azerbaijani forces the upper hand in further exhausting Armenian air defense batteries and conducting behind-the-lines strikes against logistical hubs. In the case of the UAV, the Armenian air defense units almost entirely comprised of Soviet-era or slightly newer Russian equipment. The only formidable air defense unit was the “Tor” M2KM missile system, which could pose a threat to Bayraktar TB-2s. This upgraded variant of a Soviet-era air defence unit effective against drones was the effective range of its missiles and the accuracy of pinpointing a drone-sized enemy projectile. Although considered superior to other active air defense units, the S-300s in the Armenian armed forces did not prove effective against UAVs, given that S-300s are designed to shut down larger targets at higher altitudes, such as aircraft, thus making them useless for air defense against drones.
Following the war, the most profound weakness of the Armenian military was in the domain of air defence. The Indian-made Akash SAM overtook similar defence products of the same caliber and hit the top of the list as Armenia’s preferred procurement of weapons. Although the technological details of the Akash system that the country sought to purchase two years ago were not made public for the reasons of military classification, it should be noted that the Akash SAM is currently undertaking upgrades. One of the most recent advancements is Akash-NG [15], a variant designated for downing small-scale aerial units, such as UAVs, almost perfectly fitting Armenia’s air defense needs. The first payload of Akash batteries was set for delivery to Armenia this year.
Apart from the Akash SAM, the military deal between India and Armenia comprises also other aerial defense aspects, namely the acquisition of “Zen” drone warfare system for the Armenian armed forces. Being rather a passive anti-drone system, not employing drones with projectiles, the “Zen” system provides surveillance by neutralizing drones through jamming [16].
Regarding land warfare, the Pinaka multi-barrel rocket launcher appears in the Armenian procurement list. Given Azerbaijan’s heavily funded and better-equipped rocket artillery equipment, including an array of Turkish and Israeli weaponry [17], Armenia’s move appears to be an attempt to fill the gap in artillery firepower. The Pinaka system stood out particularly during the Kargil War of 1999, when the Pinaka artillery barrage proved effective in neutralizing Pakistani positions. What is more, Armenia sought the Indian 155mm Advanced Towed Artillery System (ATAGS), which was added to the purchase list a year after the Akash SAMs in 2022 [18]. Altogether, the sum of a wide-range weapons systems comprising the most recent Indian weaponry is supposed to meet a considerable portion of Armenia’s defense needs, filling gaps, and eliminating weaknesses revealed by recent conflicts.
The South Caucasian Military Balance of Power
The military balance of power in the South Caucasus has been a matter of concern since the eruption of the Second Nagorno-Karabakh War in September 2022. The war and the recent Azerbaijani blitzkrieg into Karabakh in September 2023 demonstrated the superior firepower and fighting capability of the Azerbaijani army, thus accentuating the Armenian armed forces’ inferiority. The shifting military balance in the South Caucasus towards favoring Azerbaijan is also being monitored by Iran, seeing a more capable Azerbaijan as a threat given its domestic dialogue with the Azeri minority living primarily in the northwest of the country and a potential land bridge between Azerbaijan and its guardian Turkey.
At the same time, Moscow’s grip over the South Caucasus seems to be fading. Military incursion into Ukraine reduced Russian army units deployed in the region, with military bases in Armenia being the main instruments for Russia to maintain a steady force in the region. The waning Russian influence is now replaced by that of Turkey-backed Azerbaijan, with their bilateral partnership lessening Azerbaijan’s dependence on Moscow in terms of military arm purchases and overall foreign policy. On the other hand, Armenia turns its back to Russia diplomatically with the announced intention of Yerevan to withdraw from the Moscow-led security block CSTO [19], the so-called Russian equivalent of NATO founded by the Kremlin, to have a stronger grip over post-Soviet countries. The decision behind Armenia’s parting ways with the CSTO allegedly pertains to the ineffectiveness of CSTO peacekeepers in halting the Azerbaijani assault into Karabakh last year, proving useless in the defense of a member state.
With the last reminder of an alignment with Russia now gone, Yerevan looks beyond the West to foster new partnerships to better face Azerbaijan. Apart from the deals with the French for the acquisition of certain military hardware, the US emerged as Armenia’s biggest partner. The joint US-Armenian military drill “Eagle Partner” was conducted in July this year [20], signaling a greater, if not the biggest, rift of the country from Moscow’s sphere of influence. More radically, as part of Armenia’s plan for opening to the West, Yerevan made a statement concerning the normalization of ties with Turkey and the reopening of land crossings between the two countries [21], which had been closed since 1993. Resumed talks with Turkey may grant leverage to Armenia against Azerbaijan, given that Ankara has a strong say in Azerbaijani actions regarding Karabakh as Baku’s closest ally in the international arena. At the diplomatic level, the Armenian rapprochement with the West primarily stemming from its defence needs, together with its normalized ties with Turkey, may lead to a lasting peace deal with Azerbaijan over the decades-long Karabakh dispute. Therefore, the shifting geopolitical and military balances in the region that seem unfavorable for Armenia may indeed provide an opportunity for the country to break free even more from Moscow’s grip and follow greater rapprochement with the West in return, which may result in lasting peace with its formidable adversary Azerbaijan.
Finally, India’s often-invisible hand is gaining more prominence in the South Caucasian military balance through its arms deal with Armenia. On a wider geopolitical spectrum, India’s increased collaboration with Armenia is aimed at countering the Turkey-Pakistan-Azerbaijan axis that has forged over the years. Following Pakistan’s traditionally warm relations with Turkey, Islamabad expressed solidarity [23] with Azerbaijan during the Second Nagorno-Karabakh War. Pakistan has recently stepped up its relations with Baku, and the two have signed a deal for the Azerbaijani acquisition of joint Pakistani-Chinese-built JF-17 Thunder fighter jets [22]. Pakistan appears willing to secure a sanctuary [24] along the Europe-Caucasus-South Asia trans-regional energy corridor, with Azerbaijan sitting at the crossroads of this route. The deepening of Pakistani-Azerbaijani military cooperation coupled with India’s latest supply of arms to Armenia may evolve into an arms race in the region, partially as an extension of the Indo-Pakistani rivalry in the subcontinent. Even though the prospects of such a rivalry could prove profitable for Armenia to catch up with its rival Azerbaijan in military terms, the vacuum left behind by waning Russian influence in the region can also produce escalations.
To sum up, one may say that the India-Armenia arms deal can balance military power in the South Caucasus. Just as the diversification of foreign arms flow has given leverage to Azerbaijan over Armenia in two of the recent conflicts, the Armenian strengthening of military ties with the West, acquisition of arms from India, and the prospects for normalization of relations with Turkey may equate the balance of power in the region. In the hope that the shift in geopolitical rifts will not cause another armed conflict as is often the case according to the realist school of thought, given the waning Russian influence, the two rival South Caucasian countries can now settle their disputes over the Karabakh region for a lasting peace. In that sense, the India-Armenia arms deal demonstrates that trans-national weapon trade is a formidable foreign policy tool for the selling state to exercise influence over the region and solidify its interests, as for the receiving partner it opens alternative routes for international cooperation and promises a more independent foreign policy.
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