LUCKNOW, India -- Military equipment makers are eager to expand in India, the world's second-largest arms importer. Their enthusiasm was evident at a recent trade show, where memorandums of understanding worth $8 billion were signed, a fourfold increase from just two years ago.

The Stockholm International Peace Research Institute, a Swedish think tank, estimates that India alone accounted for 9.5% of global weapons imports for the five years through 2018, behind only Saudi Arabia. India's defense budget for the fiscal year 2019-20 ending March stood at $70 billion, up 5.2% from a year earlier.

India will spend top dollar when U.S. President Donald Trump comes for a state visit next week. Its purchases may include $1.8 billion for a ballistic missile shield for the Indian capital and $2.4 billion for 24 Seahawk "multi-mission" helicopters and six Apache attack helicopters. The Indian appetite for defense equipment looks likely to feed the global arms trade for many years.

India is also trying to move from off-the-shelf imports of weapons to making them at home as part of Prime Minister Narendra Modi's "Make-in-India" campaign. Modi took this ambition one step further when he announced at the trade show that India will aim for $5 billion in exports annually within five years, a big leap from the $1.3 billion it sold in the year ended March 2019.

The biennial trade show, Defense Expo 2020, earlier in February hosted delegates from 70 countries and 1,000 companies, including 172 foreign manufacturers of military gear.

"India is one of the world's top markets for defense products. The growth will now come from developing an ecosystem for Make-in-India in the defense sector," said Alexander Ziegler, senior executive vice president of Paris-based Safran, which makes the engines for French Rafale fighter jets. "We see robust growth across the spectrum, going forward," Ziegler said.

In fact, contrary to the hopes of the defense industry, India's military spending has not grown significantly recently due to a lack of funds. Although India's military budget is still rising, the pace of growth is slower than before. The country's defense budget is now equal to just 1.5% of gross domestic product, the lowest proportion since the war with China in 1962.

The slowdown in spending growth has forced the military to strike some items off its wish list. The navy has cut its order for minesweepers from 12 to eight, and for Russian Kamov anti-submarine warfare helicopters to six from 10. It also curtailed its order for U.S. Boeing P-8I reconnaissance planes to six from the original 10.

But arms makers continue to believe in the medium- to long-term prospects for the Indian market, given the country's growing economy and the threats it perceives from neighboring Pakistan and China. Artillery exchanges are a daily affair across the "line of control" with Pakistan, and India has an unresolved border dispute with China that occasionally flares up into a military standoff.

The most important memorandums signed during the expo were with Russia, which supplies 65% of India's defense equipment. The deals were estimated at $2.5 billion and included 14 agreements under the Make-in-India initiative.

Russia remains India's largest overseas arms supplier, selling it an array of defense equipment, including the MiG-21 fighter jet. © Reuters

Local production agreements related to spare parts and entire weapons systems for T-72 and T-90 tanks, the mainstay of the Indian Army, radar systems and anti-submarine warfare rocket launchers. Companies including India's state-owned Bharat Heavy Electricals, weapons maker Bharat Dynamics and Russian machine builder UralVagonZavod were involved in signing the memorandums.

New priorities, such as unmanned weapon systems, are also opening up vast opportunities for vendors.

India's state-owned Hindustan Aeronautics signed a memorandum with Israel Aerospace Industries for the manufacture of armed drones. India's Kalyani Strategic Systems is setting up a facility in the southern city of Hyderabad to maintain advanced air-defense systems.

"The nature of demand is changing," said Roni Konfidan, marketing manager at Israel's Uvision, which makes drones. "We believe that despite tepid growth in its defense budget, in the long run India presents a much larger opportunity when compared to many other counties."