India Defence Budget 2025: How It Compares to China and the US
India Defence Budget 2025: India has increased its defence budget by 9.53% for the financial year 2025-26, taking the total allocation to ₹6.81 lakh crore. While this marks a significant step toward military modernization and self-reliance, the amount is still considerably lower than that of global giants China and the United States.
The United States leads the world with a staggering $849.8 billion defence budget, ensuring its dominance in military technology and global operations. Meanwhile, China, India’s biggest strategic rival, is estimated to spend $232-309 billion—a number that continues to rise as Beijing strengthens its military presence in the Indo-Pacific.
This stark contrast in military spending raises an important question: How does India’s defence allocation measure up against these global superpowers, and what challenges does it face in maintaining deterrence?
A Disparity in Defence Spending
India’s defence budget increase is the highest in recent years, reflecting a strong focus on national security, border infrastructure, and indigenous defence production. However, despite the jump, it remains significantly smaller compared to China and the US.
Defence Budget Comparison (2025-26)
| Country | Total Defence Budget | % of GDP Spent on Defence |
|---|---|---|
| United States | $849.8 billion | ~3.2% |
| China | $232-309 billion (est.) | ~1.5% (official, real figures could be higher) |
| India | ₹6.81 lakh crore (~$82 billion) | 1.9-2% |
The budget difference highlights a crucial reality: India must do more with less. While the US and China have vast financial resources to sustain military expansion, India faces the challenge of balancing its defence needs with economic growth.
How Do the Three Countries Allocate Their Defence Budgets?
Each of the three nations has distinct defence priorities, shaped by their strategic interests and security concerns.
United States: Global Military Supremacy
With the world’s largest defence budget, the US focuses on maintaining global dominance through advanced military technology, nuclear deterrence, and strategic alliances.
- $49.1 billion allocated for nuclear triad modernization
- $48.1 billion for naval expansion, including aircraft carriers and submarines
- $61.2 billion for air superiority, focusing on next-generation fighter jets and UAVs
- Heavy investments in AI-driven warfare, cyber capabilities, and hypersonic missile development
The US military strategy revolves around power projection, strengthening alliances like NATO and AUKUS, and countering threats from China and Russia.
China: Expanding Regional and Technological Superiority
China continues its aggressive military expansion, focusing on securing the Indo-Pacific and asserting dominance in areas like Taiwan and the South China Sea.
- Heavy investment in hypersonic weapons, AI warfare, and space-based military systems
- Aircraft carrier expansion to strengthen naval power
- Cyber and electronic warfare capabilities
- Rapid military infrastructure development along the India-China border
China’s defence spending benefits from dual-use investments—integrating military advancements with civilian industries and technological ecosystems, making its true military funding difficult to quantify.
India: Strengthening Border Security and Self-Reliance
India’s defence spending follows a multi-pronged approach, balancing modernization with indigenous production to reduce dependency on imports.
- ₹1.9 lakh crore allocated for capital expenditure (new weapon acquisitions and modernization)
- Major border infrastructure expansion to counter China’s growing military presence at the LAC
- Emphasis on AatmaNirbhar Bharat (self-reliant India) to develop indigenous weapons and reduce imports
- Strengthening naval power in the Indo-Pacific, including submarines and aircraft carriers
- Expanding missile capabilities, including the Agni and BrahMos series
Despite these efforts, India still lags behind China and the US in military funding and technological advancements.
Challenges for India: Doing More with Less
1. Managing Resource Constraints
Unlike the US and China, India has to balance economic growth with defence spending. The budget increase is notable, but funds must be used efficiently to maximize capability without overburdening fiscal resources.
2. Reducing Dependence on Imports
India remains one of the world’s largest arms importers, relying on countries like Russia, France, and the US for advanced military technology. While Make in India initiatives have led to significant progress, delays in domestic production and capability gaps continue to be challenges.
3. Balancing Conventional and Next-Generation Warfare
Unlike the US, which prioritizes high-tech military supremacy, or China, which integrates economic and military growth, India must prepare for both conventional and asymmetric threats.
- High-altitude warfare capabilities to counter China’s border aggression
- Counter-terror operations along the western front (Pakistan)
- Naval expansion to strengthen control over the Indian Ocean
- Cyber and space-based defence investments to prepare for future warfare
India’s Strategic Imperative: The Path Ahead
India’s 9.53% budget hike sends a strong message about its commitment to national security. However, financial constraints and external threats mean that simply increasing defence spending is not enough. India must prioritize efficiency, innovation, and strategic investments.
Key Priorities for the Future:
✅ Accelerate domestic defence manufacturing to reduce reliance on imports
✅ Enhance joint military production with allies like the US, France, and Israel
✅ Invest in AI, cyber warfare, and space-based defence to stay ahead of emerging threats
✅ Strengthen naval deterrence, especially in the Indo-Pacific, where China’s influence is growing
While India’s defence budget remains far below China’s and the US’s, its focus on indigenization, modernization, and strategic partnerships will play a crucial role in strengthening its military capabilities.
As geopolitical tensions continue to rise in the Indo-Pacific and along India’s borders, the country’s ability to innovate and optimize its defence spending will determine its long-term military strength and global standing.
Conclusion
India’s defence budget for 2025-26 represents a critical step in its military modernization journey. However, the stark contrast in spending compared to China and the US highlights the challenges India faces in maintaining deterrence while balancing economic priorities.
With an increased focus on self-reliance, indigenous production, and strategic investments, India is on a path to becoming a stronger military power. However, how efficiently it utilizes its resources will ultimately determine its success on the global stage.
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