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Indonesia buys UK submarine rescue vessel in $100 million deal

JAKARTA (Reuters) - Indonesia's defence ministry said on Wednesday it has signed an agreement to buy a submarine rescue vessel for $100 million from a British company, the latest move to modernise the Southeast Asian country's ageing military equipment.

The deal between a company appointed as the defence ministry's partner, PT BTI Indo Tekno, vessel producer Submarine Manufacturing & Products Ltd and Houlder Ltd was signed on Tuesday on the sidelines of a defence expo in London.

It's the latest in a series of big-ticket military purchases that have raised eyebrows in Indonesia, among them 42 Dassault Rafale fighter jets for $8.1 billion, 12 new drones from Turkish Aerospace worth $300 million, and 12 used Mirage 2000-5 fighter jets worth $800 million.

President Joko Widodo in July warned his cabinet to maintain a "healthy" budget as he highlighted outsized spending by the country's security agencies, including the defence ministry. Indonesia has earmarked 134.3 trillion rupiah ($8.74 billion) this year for defence, the biggest allocation in its state budget.

The British-made submarine is designed for swift rescue operations, can fit 50 people and is transportable by aircraft. It will be delivered with its mothership, the defence ministry said.

Indonesia was left without a rescue vessel when its one of its five submarines sank during a torpedo drill in the Bali Sea in 2021, killing 53 crew members on board.

"This is the part of Defence Minister Prabowo Subianto's mission to increase the capability of Indonesian navy," the defence ministry said in a statement.

For the past decade, Indonesia's defence spending per capita and as a percentage of gross domestic product has been the lowest among Southeast Asia's six emerging market economies, according to data from the Stockholm International Peace Research Institute (SIPRI) think tank.

($1 = 15,365.0000 rupiah)

(Reporting by Ananda Teresia, Editing by Kanupriya Kapoor)