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Defense budget of India (2020 - 2028, USD billion)

Industry: Aerospace, Defense and Space
Current: Macro-economic

The Defense budget of India attained a value of USD 74.03 billion in 2023
The indicator recorded a historical growth (CAGR) of 4.14% between...
GlobalData projects the indicator to grow at a CAGR of...

Defense budget of India (2020 - 2028, USD billion)

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India defense budget analysis

The Indian defense modernization programs have historically been fueled by the need to maintain a robust deterrence capability to dissuade hostile countries from threatening its sovereign territory. Indian territorial disputes with neighboring China and Pakistan have continued to spur defense spending over the historic period. Having fought armed conflicts with China in 1962 and with Pakistan in 1965, 1971, and 1999 India has been compelled to maintain a robust defense posture to discourage adversaries from engaging in military campaigns.

The Indian defense expenditure experienced a decline in 2021, due to the health crisis triggered by the outbreak of COVID-19. The sluggish growth registered over the historic period is a reflection of economic constraints which have impacted resource availability due to erosion in currency exchange rates. However, with the Indian economy showing signs of recovery the country's defense expenditure. A large part of this defense spending has been earmarked for financing revenue expenditures such as pensions, wages and salaries and due to the increasing burden of non-productive revenue spending, the Indian Ministry of Defence (MoD) has initiated several reforms to restructure military apparatus.

Indian defense expenditure is primarily driven by the need to replace the country's aging military hardware, to ensure adequate protection from potentially hostile actions by China and Pakistan, and a desire to project itself as a major power globally. Strong economic growth over the last decade has further fueled India's defense industry growth.

India is faced with an extremely challenging strategic environment, with its immediate rivals Pakistan and China developing significant military capabilities and rapidly modernizing their weapon systems. India enjoyed close defense ties with the Soviet Union, and the country continues to maintain close defense ties with the Russian Federation (Russia), the successor of the Soviet State.

Faced with hostile neighbors on its Northwestern and Northeastern borders, India has been compelled to maintain a strong defense posture. The country's defense forces are usually held in high esteem among the common citizens and defense expenditure usually receives unequivocal legislative support in the parliament. However, although India faces a series of security challenges emanating from Pakistan and China, it thus far has maintained a rather subdued defense expenditure as a percentage of its GDP.