2 Feb 2026·Source: The Hindu

5 min

EconomyInternational RelationsPolity & GovernanceEDITORIAL

India's Defence Spending: Balancing Security Needs and Economic Realities

India needs to increase defence spending to counter evolving security threats.

Photo by SaiKrishna Saketh Yellapragada

Editorial Analysis

India needs to significantly increase its defence spending to counter evolving security threats, particularly from China. The current allocation is insufficient and must be raised to 5-7% of GDP for a credible deterrence.

Main Arguments:

India's defence budget, while seemingly significant at nearly 3% of GDP, is insufficient given the evolving security landscape and the resources committed by potential adversaries.
Countries like the U.K. and the U.S. have historically spent a higher percentage of their GDP on defence, highlighting the need for India to increase its allocation.
China's defence budget is much higher than officially announced, requiring India to significantly increase its spending to maintain a credible deterrence.

Counter Arguments:

Critics may argue that India does not have the capacity to absorb a higher defence budget, but this can be addressed by overhauling the existing system and adopting innovative strategies.
Some may suggest that India should focus on other areas like economic development, but the author argues that security is a prerequisite for economic progress.

Conclusion

India needs to increase its defence spending to at least 5% of its GDP in the short to medium term and 6% to 7% in the long term to maintain a strong military and deter potential adversaries.

Policy Implications

The government should prioritize increasing the defence budget, streamlining the Ministry of Defence, adopting unconventional methods of gaining technology, and forging collaborations to build a credible defence capability.

The article argues that India's defence budget, while seemingly impressive at nearly 3% of GDP, is insufficient given the evolving security landscape. It suggests that India's security outlays must be assessed in the context of resources committed by nations that pose a threat, such as China and Pakistan. Even countries like the U.K. and the U.S. have historically spent a higher percentage of their GDP on defence. China's defence budget, though officially announced as $246 billion in 2025, is widely believed to be much higher. The Heritage Foundation estimated China's 2017 defence budget at $562 billion, compared to India's $68 billion. To maintain a strong military, India needs to increase its defence spending to at least 5% of its GDP in the short to medium term and 6% to 7% in the long term. The author emphasizes that a credible deterrence against an increasingly aggressive China cannot be built on hopes and requires a larger budget with innovative strategies.

Key Facts

India's defence expenditure: ~3% of GDP

China's estimated 2017 defence budget: $562 billion

India's estimated 2017 defence budget: $68 billion

UPSC Exam Angles

GS Paper 3 (Economy): Defence budget allocation and its impact on economic growth.

GS Paper 2 (International Relations): India's defence cooperation agreements and strategic partnerships.

GS Paper 3 (Security): Internal and external security challenges and defence preparedness.

Visual Insights

More Information

Background

The concept of defence spending is deeply rooted in the history of nation-states. The need for a standing army and military expenditure arose with the emergence of defined territories and the need to protect them. Early forms of defence spending can be traced back to ancient civilizations, where resources were allocated for fortifications, weapons, and training of soldiers. This expenditure was often a significant portion of the state's revenue, reflecting the importance of security. Over time, the nature of defence spending has evolved significantly. The Industrial Revolution brought about advancements in military technology, leading to increased expenditure on research and development, as well as the procurement of sophisticated weaponry. The two World Wars further accelerated this trend, with nations investing heavily in their military capabilities. The Cold War era saw a massive arms race between the United States and the Soviet Union, resulting in unprecedented levels of defence spending. In India, defence spending has been influenced by its historical context and geopolitical realities. After independence, India faced numerous security challenges, including conflicts with Pakistan and China. This led to a sustained focus on building a strong military and allocating resources for defence. The Ministry of Defence is the primary body responsible for managing India's defence budget and overseeing the armed forces. The Comptroller and Auditor General of India (CAG) audits defence expenditures to ensure transparency and accountability. Comparing India's defence spending with other countries provides valuable insights. Nations like the United States, China, and Russia consistently rank among the top defence spenders globally. These countries allocate a significant portion of their GDP to defence, reflecting their strategic priorities and security concerns. Analyzing these trends helps understand the relative position of India in the global defence landscape.

Latest Developments

In recent years, India has taken several initiatives to modernize its armed forces and enhance its defence capabilities. The Make in India initiative has been a key focus, aiming to promote indigenous defence production and reduce reliance on imports. This has led to increased investment in domestic defence industries and the development of advanced technologies. The government has also been actively pursuing defence cooperation agreements with various countries to enhance its strategic partnerships. However, India's defence spending continues to face challenges. The need to balance security requirements with economic constraints remains a key concern. The allocation of resources for defence must be carefully considered in the context of competing priorities, such as infrastructure development, healthcare, and education. There are ongoing debates about the optimal level of defence spending and the most effective ways to utilize available resources. Institutions like NITI Aayog play a crucial role in advising the government on defence-related economic policies. Looking ahead, India's defence spending is expected to increase in the coming years. The evolving security landscape and the growing assertiveness of China are likely to drive further investments in military capabilities. The government has set ambitious targets for indigenization and aims to become a major exporter of defence equipment. The success of these efforts will depend on effective policy implementation, technological innovation, and strategic partnerships. The long-term goal is to achieve a level of defence preparedness that ensures India's security and stability in a complex and uncertain world. This requires a comprehensive approach that encompasses not only increased defence spending but also strategic planning, technological advancements, and diplomatic engagement.

Frequently Asked Questions

1. What percentage of India's GDP is currently spent on defence, as per the topic?

As per the topic, India's defence expenditure is approximately 3% of its GDP.

2. What are the key facts about India and China's defence spending for UPSC Prelims?

Key facts include India's defence expenditure being around 3% of GDP, while China's officially announced defence budget for 2025 is $246 billion. However, the Heritage Foundation estimated China's 2017 defence budget at $562 billion, significantly higher than India's $68 billion for the same year.

Exam Tip

Remember the approximate percentages and the significant difference in spending between India and China.

3. Why is there a need for India to increase its defence spending?

India needs to increase its defence spending to counter evolving security threats and maintain a strong military, especially considering the resources committed by nations that pose a threat, such as China and Pakistan.

4. What is the historical background of defence spending?

5. What are the pros and cons of increasing India's defence spending to 5-7% of GDP?

Increasing defence spending could enhance national security and military capabilities. However, it might divert resources from other crucial sectors like healthcare, education, and infrastructure development. A balanced approach is necessary to ensure overall economic and social well-being.

6. What reforms are needed in India's defence sector to optimize spending?

Reforms could include promoting indigenous defence production through the 'Make in India' initiative, improving procurement processes, and enhancing research and development in defence technology. Efficient resource allocation and strategic planning are also crucial.

7. What are the recent developments related to India's defence capabilities?

Recent developments include initiatives to modernize the armed forces, promote indigenous defence production through the 'Make in India' initiative, and increased investment in domestic defence industries and the development of advanced technologies.

8. What is the 'Make in India' initiative's role in the defence sector?

The 'Make in India' initiative aims to promote indigenous defence production and reduce reliance on imports. This has led to increased investment in domestic defence industries and the development of advanced technologies.

9. How does the defence budget impact common citizens?

Increased defence spending can potentially divert funds from social programs, impacting areas like healthcare and education. However, a strong defence sector can also ensure national security, which is essential for economic stability and citizen well-being. A balanced approach is key.

10. What is the significance of the years 2017 and 2025 in the context of India and China's defence spending?

2017 is significant because the Heritage Foundation estimated China's defence budget at $562 billion, while India's was $68 billion. 2025 is the year China's officially announced defence budget is $246 billion. These figures highlight the disparity in defence spending between the two nations.

Practice Questions (MCQs)

1. Consider the following statements regarding India's defence spending: 1. The article suggests India needs to increase its defence spending to at least 5% of its GDP in the short to medium term. 2. China's officially announced defence budget in 2025 was $246 billion. 3. The Heritage Foundation estimated China's 2017 defence budget to be lower than India's. Which of the statements given above is/are correct?

A.1 and 2 only
B.2 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: A

Statement 1 is CORRECT: The article suggests that India needs to increase its defence spending to at least 5% of its GDP in the short to medium term. Statement 2 is CORRECT: China's officially announced defence budget in 2025 was $246 billion. Statement 3 is INCORRECT: The Heritage Foundation estimated China's 2017 defence budget at $562 billion, compared to India's $68 billion. Therefore, China's defence budget was estimated to be higher than India's.