"It is a harsh reality that defence expenditure involves huge outlays on acquisitions," Foreign Ministry Pranab Mukherjee told visiting defence officials from 40 countries including Britain, China, Germany and the US.

"There is no denying the fact that the challenge of modern warfare with the likely nuclear, biological and chemical dimensions cannot be met with outdated technologies," he said.

"These assume greater significance because of unfathomable dangers arising from proliferation of nuclear technologies over the years and the capability acquired by international terrorist organisations."

"And therefore there is no escape from modernisation of the defence forces," said Mukherjee, who until last month held the defence portfolio.

His remarks came on the eve of the resumption of peace talks with India's nuclear-capable rival Pakistan. Talks had been on hold following the July train bombings in Mumbai which killed 186 people and injured 800.

India, which has fought three wars with Pakistan since 1947 and received a bloody nose in a bitter border skirmish with China in 1962, blamed the attack on militant groups backed by Islamabad's main spy agency.

India has in the past two years spent 7.0 billion dollars on acquisitions including 1.43 billion dollars on 26 British trainer jets, 1.2 billion dollars on six French submarines and 1.5 dollars on a Russian aircraft carrier.

Its immediate shopping list includes 126 fighter jets worth 6.5 billion dollars, artillery for 1.5 billion dollars as well as plans to construct an air defence ship worth 2.2 billion dollars, according to available estimates.

India accuses Pakistan of not only being a nuclear proliferator but also of backing Islamic guerrillas fighting Indian rule in Kashmir which has claimed 44,000 lives since 1989.

India will also hold talks with Chinese President Hu Jintao who arrives November 20.

Finance Minister Palaniappan Chidambaram warned the Indian military that it must generate revenue to help India retain its eight percent economic growth.

"We now have to take hard decisions to restructure certain expenditures and we have to maximise available public resources by enlisting private resources wherever feasible," Chidambaram told the conference.

"Soft options for reducing expenditures or increasing revenues are getting exhausted," he said.

"Also, the argument that the government must support loss-making or inefficient state undertakings because of their strategic importance is difficult to sustain in an increasingly globalised world with many more efficient alternatives," Chidambaram said.

Most Indian military development projects have been delayed by eight to 10 years due to lack of expertise or resources.

However, junior defence minister Pallam Raju, who also attended the three-day conference, backed Mukherjee by saying India could not afford to lower its guard.

"India has been a big spender in this part of the globe in 2004 and 2005 and it is unlikely the scale of expenditure will see any abatement in the forseeable future given the unfolding security scenario and the related threat perception including terrorism in many forms and shapes," Raju said.

earlier related report
Close to deal with India over disputed glacier: Pakistan FM
Close to deal with India over disputed glacier: Pakistan FM New Delhi (AFP) India, Nov 13 - Pakistan's foreign minister said on Monday that a deal with India on the world's highest military battlefield was possible "within days" ahead of talks between the two rivals.

Top foreign ministry officials from the nuclear rivals are due to meet in New Delhi Tuesday and are likely to discuss the proposed demilitarisation of Siachen glacier.

"Given the political will, we have narrowed down our differences enough for us to have a decision on Siachen within a matter of days, not even weeks," Khurshid Mehmood Kasuri told private NDTV network Monday.

There was no immediate comment from the government of India, which has been holding strategic peaks on the 6,300-metre (20,700-foot) glacier since 1987 and has refused to withdraw troops.

India wants troop positions marked out in case Pakistan moves its soldiers in after a withdrawal. Islamabad, however, fears that writing down the positions would be tacit acceptance of India's claims to Siachen.

Kasuri said there were still differences between the two sides.

"There are differences. If differences weren't there we could have signed an agreement. But those differences can be bridged by political will," he said.

Kasuri's comments come a day before foreign secretaries of the two countries are to resume talks that were postponed by train bombings in India's financial hub Mumbai in which 186 people were killed and over 800 injured.

New Delhi blamed the attacks on Pakistan's military spy agency, the Inter-Services Intelligence, but Islamabad denied the charges.

The nuclear rivals have fought three wars since their independence from Britain in 1947, two of them over the disputed Kashmir region.

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