India is developing a military appetite to match its growing economic power.

According to military analysts, India over the next five years is expected to spend as much as $40 billion on weapons procurement alone, more than its entire annual armaments budget today — upgrading systems as diverse as jet fighters, artillery, submarines and tanks in its largely Soviet-era arsenal. As a result, India will become one of the largest military markets in the world.

For American contractors, which had been shut out of India for decades, the surge in demand comes just as relations between Washington and New Delhi reach a new level of warmth.

In terms of “potential for growth, India is our top market,” said Richard G Kirkland, Lockheed Martin’s president for South Asia.

But whether US companies can turn that potential into profits will depend on more than warm relations between officials in their capitals; it will depend on how they finesse the particular challenges of the new marke — especially, competition from their Russian counterparts.

The stakes of the contest were underscored this week when the Indian defence ministry called for bids to fill an order for 126 fighter jets, a contract that could be worth $10.2 billion.

Determined to build a domestic arms industry, India is requiring foreign suppliers to make a sizable portion of any military goods in this country. In the case of the jet fighter contract, the successful bidder must produce goods worth half the contract’s value in India. So, the American companies have been busily pairing up with locals.

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