This revolution is certain to acquire global dimensions, because India is in the Top 10 in arms spending -- in the five-year period from 2007 to 2012 the New Delhi government will buy $30 billion worth of weapons.

The revolution is rooted in India's reluctance to depend on foreign weapons. It wants not only to be militarily sufficient but to become a world center for the production and exports of arms spare parts.

Indian private companies, which have not been prominent in the defense industry, will play a key role in pursuing this goal. Only recently, they did not get any government defense orders, but now they will be encouraged to make friends with foreign partners in order to carry them out.

The new line is reflected in DefExpo's official goal -- to become a site where foreign producers can make contacts with Indian industrialists with a view to setting up joint ventures.

Indian private companies have become much stronger in the last 17 years since the Indian market was opened to foreigners. They are irritated that a lion's share of government orders is awarded to foreigners and state-run companies.

The Indian defense industry does not always fulfill its goals, and the government has promised to give a bigger share of multibillion-dollar defense orders to domestic private companies. Their advent to the strategic defense industry, which accounts for about 2.5 percent of GDP, should resolve two tasks -- encourage competition with state-owned companies and increase its adoption capacity -- new orders of foreign weapons will bring in huge investment.

The Indian government's requirement is that foreign companies invest at least 30 percent of the contract's value in the local defense industry. This applies to all deals worth more than 3 billion rupees (about $770 million). This figure has been raised to 50 percent on the eve of a mega tender for the supply of the Indian air force with 126 fighters to the tune of more than $10 billion.

One third of $30 billion is $10 billion. This is the amount of investment that India will have to assimilate in the next few years. Indian Defense Ministry officials admit that state-owned companies will not be able to swallow that much.

For the time being, private companies are kept at a certain distance -- they have no chance of receiving a defense order if the share of foreign capital exceeds 26 percent. However, that situation may change in the future.

(Yevgeny Bezeka is RIA Novosti's correspondent in India. This article is reprinted by permission of RIA Novosti. The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

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