India's recent Union Budget for FY2025-26 has allocated ₹6.81 lakh crore (approximately $79 billion) for defence, marking a 9.53% increase from the previous fiscal year. This budget emphasizes military modernization, with ₹1.8 lakh crore specifically earmarked for new acquisitions, including fighter jets, naval ships, and advanced weapon systems. Notably, this allocation represents 1.9% of India's projected GDP for 2024-25, which is lower than the recommended minimum of 2.5% to effectively address strategic threats from neighbouring countries like China and Pakistan.

Comparison With China And Pakistan

China: The estimated defence budget ranges between $232 billion to $309 billion, significantly outpacing India's allocation. China's defence spending is officially around 1.5% of its GDP, but actual figures may be higher due to substantial investments in dual-use technologies and military infrastructure that are not fully accounted for in the official budget. China's military modernization focuses on expanding its naval capabilities and advancing technologies like hypersonic weapons and AI warfare systems.

India’s Defence Budget Growth

1. Recent Increases: India's defence budget for FY2025-26 is set at ₹6.81 lakh crore (approximately $79 billion), reflecting a 9.53% increase from the previous year, which is the highest growth rate in recent years. This increase is aimed at enhancing military modernization and self-reliance in defence production.
   
2. Long-term Trends: Over the last decade, India has seen a steady increase in its defence spending, with allocations often rising between 7% to 13% annually. However, these increases have not consistently kept pace with inflation or the rapid growth of China's military budget.

3. GDP Share: India's defence spending has generally constituted about 1.9% to 2% of its GDP, which is higher than China's official figures of approximately 1.5%, although the actual figure may be higher due to undisclosed expenditures.

Comparative Analysis

Scale of Budget: While India’s recent increases are significant for its context, they remain dwarfed by China's expansive military budget. For example, in 2023-24, India's budget was approximately $72 billion, compared to China's $225 billion, showcasing a persistent gap that has not narrowed over time.

Strategic Implications: The disparity in defence budgets raises concerns regarding India's ability to maintain deterrence against China and Pakistan effectively. Despite increasing allocations, India must optimize its resources and focus on indigenous production to enhance its military capabilities within this competitive landscape.

Comparison With Pakistan

In stark contrast, Pakistan's defence budget for the same period is significantly lower. This disparity highlights the vast difference in military spending between the two nations: India's budget is $79 billion with 1.4 million personnel while Pakistan's budget allocation is just $7.64 billion with 650,000 personnel.

Military Strength: Personnel: India boasts approximately 800,000 more active military personnel than Pakistan.
Air Force Capability: India ranks fourth globally with 2,296 aircraft, compared to Pakistan's 1,434 aircraft.

India's increased defence spending is part of a broader strategy to bolster military capabilities in response to perceived threats from both China and Pakistan. The focus on indigenous defence manufacturing under initiatives like Atmanirbhar Bharat aims to reduce reliance on foreign arms while enhancing operational readiness and technological advancements. 

India's defence budget increase, while significant, still highlights a disparity in scale compared to its regional rivals. The allocation is aimed at strengthening border security and promoting self-reliance in defence production under initiatives like Aatmanirbhar Bharat. However, experts argue that India needs to enhance its military spending efficiency and prioritize domestic manufacturing to reduce reliance on foreign arms imports, which currently account for a significant portion of its military capabilities.

While India's recent budgetary increase demonstrates a commitment to military readiness and modernization, it faces challenges in matching the scale of defence spending seen in China and the strategic complexities posed by both China and Pakistan.

Agencies