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India becomes biggest foreign buyer of US weapons

India imported $1.9 billion of military kit from the U.S. last year, making it the biggest foreign buyer of U.S. weapons, according to research from IHS Jane's.

The U.S., which remained the largest exporter of military equipment, displaced Russia as India's biggest arms supplier. In total, the U.S. exported $25.2 billion of military equipment in 2013, compared with $24.9 billion the previous year.

(Read more: India central bank: Emerging markets 'on their own')

India, with total defense imports of $5.9 billion, became the most enthusiastic buyer from the U.S., knocking Saudi Arabia out of the top spot with purchases that included Boeing's C-17A strategic transport aircraft and P-8I Maritime Patrol Aircraft.

"We are seeing trade patterns fundamentally change for the dominant players," said Ben Moores, senior analyst at the security consultancy and the author of the report. "India is outpacing everyone."

A demonstrator exercises his right to openly carry a rifle during a pro-gun rally on January 19, 2013 in Olympia, Washington.
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A demonstrator exercises his right to openly carry a rifle during a pro-gun rally on January 19, 2013 in Olympia, Washington.

India overtook China to become the biggest arms importer in 2010, according to the Stockholm International Peace Research Institute, which monitors the global arms trade.

Until now, however, most of India's contracted arms purchases have been from Russia, partly because it has needed to replace or upgrade equipment bought from its former ally the Soviet Union.

India has struggled to create indigenous manufacturing of high-tech weapons systems, and depends on imports in its efforts to catch up with the better-equipped Chinese armed forces.

(Read more: What India needs to do to stamp out poverty)

"It is a big capability gap that's opened between the Indians and the Chinese," said Mr Moores. "India is buying a lot of high-end equipment from the Americans to address that gap."

In 2009 India imported $237 million in military equipment from the U.S. but this jumped to $1.9 billion last year, as almost half of its $13.4 billion defense procurement budget went overseas. India accounted for nearly 10 percent of the $63 billion international defense market, outstripping much of the Middle East and China.

Arms trade statistics can be volatile because of deliveries of high-value items such as aircraft. But the latest U.S.-India data, which measures deliveries rather than sales contracts, is significant because other western arms exporters have been unable to clinch deals with New Delhi in the face of periodic corruption scandals, slowing Indian growth and budget constraints.

France's Dassault, for example, is still waiting for India to finalize a preliminary agreement to buy Rafale fighter jets that could be worth up to $20 billion.

AK Antony, India's defence minister, this month said his ministry had used up most of its budget for the year ending in March and would make no large acquisitions until the next financial year.

"There is no money left," he said. "All major projects have to wait until April 1."

(Read more: India's finance minister unveils tax cuts in budget)

The Middle East, meanwhile, continued to import military equipment at a rapid pace, and now represents one-third of the global arms market.

Saudi Arabia, Oman and UAE together imported more than western Europe as a whole, buying $9.3 billion-worth of equipment compared with $8.7 billion for the latter.

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Saudi Arabia imported more than $5.4 billion worth of equipment, more than double the $2.2 billion it bought in 2009. By 2015 its imports are expected to increase to $7.8 billion. The United Arab Emirates' import program is expected to more than double. By 2015 imports are forecast to total $3.1 billion, up from a total of $1.4 billion. American companies accounted for half of all defense exports to the region.

South Korea is set to break into the top 10 global national military exporters for the first time in the next 18 months and is forecast to overtake China by 2015. It exported $600 million of equipment this year but by 2015 it will be exporting $1.5 billion a year in defense equipment and will supplant some of the large Western companies in the process, IHS Jane's said.

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