How India has become 4th largest defence spender in the world

The world is seeing two wars — the Russia-Ukraine war and the Israel-Hamas conflict. There’s also the concern that China will launch an offensive against Taiwan. It is amid this volatility and conflict that India has slowly but steadily been increasing its defence spending, making it one of the world’s top five military spenders today.

There is a marked difference from India’s earlier years, which hardly saw any development in the defence. One can say that the sector has seen significant growth in the latter part of the 20th Century, and rapid progress in the last 15-odd years.

In this explainer, we take you through India’s growing defence spending — budgetary allocations and more — and how India compares to the world.

What’s India’s defence spending?

In 2022, Swedish think tank Stockholm International Peace Research Institute (SIPRI) in its annual report stated that India was the fourth biggest military spender — only behind the United States ($877 billion), China ($292 billion) and Russia ($86.4 billion).

As per data, India’s military expenditure was a whopping $81.4 billion (Rs 6.7 lakh crore), up from $76.6 billion in the previous year — a six per cent rise. A comparison to the 2013 figures and it reveals that it’s a 47 per cent rise.

The report added that around 23 per cent of the total spending by India was towards funding equipment and infrastructure. However, a major part of the spending was on expenditures like salaries and pensions.

Even a look at India’s defence budgets over the years show a rise in allocation of funds. In this year’s interim Budget, the defence allocation was the highest — Rs 6.2 lakh crore. Of that, a total of Rs 1.72 lakh crore was set aside for the military for capital expenditure that largely includes purchasing new weapons, aircraft, warships and other military hardware.

And this allocation of funds has been significantly growing over the years. In 2023, the Government had allocated Rs 5.93 lakh crore, which accounted for over 13 per cent of the total expenditure of the Centre — the largest across all ministries.

In 2022, the defence budget was Rs 5.25 lakh crore. This was an increase from the Rs 4.78 lakh crore in 2021. And in 2020, India’s defence sector was allocated Rs 4.71 lakh (Rs 4,71,378 crore), which constituted 15.5 per cent of the Centre’s Budget and 2.1 per cent of India’s estimated GDP.

Where is India’s defence budget spent?

While India’s allocation for the defence sector has been rising, it’s also important to see where this money goes.

A big chunk of the allocated funds go towards defence pensions and salaries; in 2024-2025, the amount earmarked for this was Rs 1.41 lakh crore. In fact, an Indian Express report stated that the military’s modernisation budget for 2024-25 saw a meagre hike of only 6.17 per cent.

Another significant component of India’s defence spending is imports. In 2023, data showed that India procured military hardware worth Rs 1.93 lakh crore from abroad in the past five years which included helicopters, aircraft radars, rockets, guns, assault rifles, missiles and ammunition. Notably, SIPRI had declared India to be the world’s top importer of military hardware in 2018 to 2022. “With an 11 per cent share of total global arms imports, India was the world’s biggest importer of major arms in 2018–22, a position it has held for the period 1993–2022,” it said.

However, the report added that India’s defence imports were falling — from 62 per cent to 45 per cent between 2017 and 2022. In fact, India’s been more focused in the past two-three years

Why is India’s defence spending rising?

But what has prompted this rise in India’s military spending? As former Chief of the Army General MM Naravane (retired) wrote in The Print, “A country decides how much is enough depending on the threats it faces, both external and internal. Defence expenditure can be likened to an insurance premium. The greater the risks to be covered, the greater the premium. Similarly, the greater the number of threats a nation faces, the more it will have to allocate in terms of the defence budget.”

And India faces a double threat — China and Pakistan. Islamabad remains a constant threat to New Delhi; it continues to fuel unrest in Kashmir through terrorism.

And China is also fermenting trouble for India. Since 2020 following the Galwan clash in which 20 Indian soldiers died, Indo-Sino tensions have been on the rise. Moreover, China has been expanding in the north; in Tibet, it has — as per an IDR report — constructed 14 air bases and an oil pipeline from Gormo to Lhasa. The construction of a 1,118 km long rail link from Gormo to Lhasa is also underway. In addition, it is believed to have deployed some two-dozen ballistic missiles including nuclear-capable ICBMs in Tibet.

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What about other countries?

India’s increased defence spending is on trend with other countries. In 2022, data showed that total global military expenditure increased 3.7 per cent in real terms to reach $2.24 trillion.

The world’s 10 largest military spenders are the US, China, Russia, India, Saudi Arabia, UK, Germany, France, South Korea and Japan . Ukraine was placed at 11th rank with $44 billion and Pakistan at 24th spot with $10.3 billion.

Interestingly, US and China combined accounted for 52 per cent of the world’s military spending in 2022. SIPRI had then said: “The continuous rise in global military expenditure in recent years is a sign that we are living in an increasingly insecure world. States are bolstering military strength in response to a deteriorating security environment, which they do not foresee improving in the near future.”

According to the International Institute for Strategic Studies (ISS), in 2023, total global defence expenditure reached $2.2 trillion, with the think tank saying that this was being driven by the ongoing Russian war in Ukraine, and the exacerbating relationship between the US and China.

For instance, Taiwan has boosted its defence budget by about $3 billion, or 20 per cent. In fact, The Philippines was the only country to reduce its military budget in 2023. However, it has expanded its cooperation with the US military.

As General Naravane writes, “Increased allocations for defence should be seen through the prism of peace and development, with expenditure considered as an investment that yields handsome returns. Peace is a prerequisite for development, and it can only prevail if we remain prepared for war.”

With inputs from agencies

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