India's military spending has been a topic of considerable discussion, particularly as the nation navigates complex geopolitical landscapes involving adversaries like China and Pakistan. As we look towards the Budget 2025, the question arises: is it time to significantly increase India's defence budget?

Current Military Spending Landscape

India's defence budget for FY 2024-25 is set at approximately ₹6.22 lakh crore (around $74.3 billion), marking a modest increase from previous years. However, despite this growth, defence spending as a percentage of GDP has declined to about 1.9%. This trend poses challenges in meeting long-term modernization and security goals, especially given the rising tensions in the region.

Since 2020, India's defence spending has increased by approximately 50%, with a compounded annual growth rate (CAGR) of around 9.1% in capital expenditure between FY20 and FY25. The capital outlay for military modernization has risen significantly, from ₹1.11 lakh crore in FY20 to ₹1.72 lakh crore in FY25, reflecting a commitment to enhancing military capabilities. Despite these increases, experts argue that the current budget still lags behind global standards, particularly when compared to the military expenditures of nations like China and Russia.

Strategic Imperatives For Increased Spending

Geopolitical Pressures

The need for a substantial increase in defence spending is underscored by the evolving security environment. India faces potential two-front conflicts with China and Pakistan, necessitating a robust military posture. Experts suggest that an annual growth rate of 25% in defence capital acquisition may be essential to achieve self-reliance in defence production and modernize military capabilities across all domains—land, sea, and air.

Domestic Production And Self-Reliance

The "Atmanirbhar Bharat" initiative aims to boost indigenous defence production, with expectations that domestic procurement will rise significantly in the coming years. The government has set ambitious targets for defence production, aiming for an annual output of ₹3 lakh crore by FY29 and increasing exports to ₹50,000 crore. To achieve these goals, a more aggressive budget allocation is necessary.

Conclusion: The Case For Hike in Military Spending

Given the current geopolitical climate and India's strategic objectives, there is a compelling case for increasing military spending in Budget 2025:

Modernisation Needs: Continued investment is crucial for upgrading outdated equipment and technology.

Self-Reliance Goals: Enhanced budget allocations can support domestic industries and reduce reliance on foreign imports.

Geopolitical Readiness: A more formidable military presence is essential to deter threats from regional adversaries.

While India has made progress in its defence budget over recent years, a more substantial increase is warranted to ensure national security and strategic autonomy in an increasingly volatile global environment.