Introduction: India’s defence budget
You must have noticed one thing about the defence budget. Articles are being continuously published on this topic that India’s defence budget, which is going to be ₹6.8 lakh crore this year, is bigger than last year. It is bigger by 9%. There has not been much of an increase. If you want to ask in dollar terms, we have now reached $78 billion. Still, in 2025, I am not frustrated—I will have to say that we are still far away from a $100 billion defence budget.
However, I will also admit here that when I look at India’s finances, look at the fiscal deficit, look at how much money is coming to the government and how much is going out, then I also have to give tax relief. I look at all this. I admit that it is difficult to find an amount of $100 billion. But still, as a defence enthusiast, as someone who loves India, we will keep repeating this point again and again: India needs to increase its defence spending.
The Ever-Present Two-Front Threat
You must have noticed one thing. Recently, many articles have been published on the fact that India’s defence budget is ₹6.8 lakh crore. But is it enough to keep pace with China and Pakistan now? Because you have to understand that India will always face the possibility of a two-front attack. I will not count Bangladesh as much right now because I do not think Bangladesh will emerge as a military threat to India in 10 years.
So, if we do not count Bangladesh, then we always have to be prepared for a two-front war. And whatever our defence budget will be—whatever money we are allocating to the Ministry of Defence and whatever money we are giving to DRDO—there will always be a question: if we compare with China and Pakistan, where do we stand? Yes, I agree that in overall development, we have gone far ahead of Pakistan. China is ahead of us. We should compare ourselves with China. But in terms of defence budget, we have to look at Pakistan as well because it is a country that wants to harm us through military means.
Budget Breakdown: What Does ₹6.8 Lakh Crore Mean?
Coming back to the defence budget, some of you may think that this entire amount of ₹6.8 lakh crore is very huge. The Defence Ministry has received a lot of money. If you convert it into dollars, it is $78 billion. Purchase everything like the F-35 fighter jet, missiles, S-500, etc.
But the problem is that all of this money is not for buying new military equipment. Because a very big chunk out of this ₹6.8 lakh crore, around ₹4.9 lakh crore, is revenue expenditure. This means that this money will be allocated to the salaries, pensions, and other expenses of the soldiers. Then we are left with ₹92,000 crore. This is your defence capital expenditure.
Whatever research has to be done, whatever money will go to DRDO, if you have to purchase a new fighter jet, if you have to make some purchases for the Navy, acquire some technology, guns, anything—this all has to come from less than ₹2 lakh crore. This limited capital explains why India has hesitated for so long on buying fifth-generation fighter jets.
Aero India and Fifth-Generation Fighter Jets
The Aero India event is going to be held in India. Now, the USA has also confirmed that most likely the fifth-generation fighter jet F-35 will participate in India’s Aero India event. Russia is also sending its Su-57. Participation of the U.S.’s F-35 has almost been confirmed. At the last moment, they took a U-turn—that’s a different matter—but for now, it seems they are coming.
I was thinking that our defense budget is not so big. The capital expenditure is not enough for us to we can purchase any of these. Because if we buy them, then it has to be a part of their program. Their spare parts and t
Their servicing will become very expensive. The matter will become very expensive.
BRO & DRDO: Budget Allocations
And then remember that this capital expenditure also includes a small amount for BRO—the true bro of India. I am talking here about the Border Roads Organisation. These people have done amazing work over the years. The roads of India near the China border were very bad. BRO has been a true bro. They have constructed a lot of roads day and night, in difficult circumstances. Thanks to them, we have better infrastructure on our borders.
So, BRO’s budget is around ₹7,150 crore, which is 99.7% more than last year. DRDO has received ₹23,000 crore here. For comparison, in the previous year, DRDO had received around ₹23,000 crore. So DRDO has received a little more money here.
However, I have to say that either we will have to upgrade DRDO altogether as an organization, or they should be given a lot more. Honestly, if you ask me, what DRDO is doing with such a small budget is still pretty good. If you compare DRDO‘s budget with its Western or Chinese counterparts, DRDO’s budget is much lower. And look at these constraints—unfortunately, when the overall government is not getting so much money.
We have also allocated various R&D projects worth around ₹14,900 crore. In this way, our total defence budget is expected to work.
China’s Defense Budget: Clouded in Secrecy
Now, let us compare it with what China and Pakistan are doing. What is China’s defence budget today? It is a very difficult question. You know, the Americans have been talking about this question for many years. Actually, for many months, they have been debating and publishing articles. They have a think tank that publishes a report stating that the actual defence budget of China, which they officially tell the world is around $225 billion, is around $700 billion.
Countering this, many people say that in the USA, too, sensationalism sells a lot. Excessive fear about China sells a lot. So, many people claim that China’s defence budget has not reached $700 billion. Even now, their budget is around $450 billion or $300 billion.
So, you will find many estimates. Americans are confused about this and debate among themselves. I can show you many security review documents regarding this. For example, Texas National Security Review and other forums. I have read many debates there. You will see estimators like “China defense spending: how to get it wrong and right.”
Americans are doing deep studies to understand how strong China is. Some believe it has genuinely reached close to $700 billion. The U.S. defence budget is already over $900 billion and may soon reach $1 trillion.
So, how much should we consider as China’s actual defence budget? It’s a difficult question. Most American analysts assume a safe figure of around $400–450 billion. As for the $700 billion claim, China hasn’t reached that yet. Even if we assume $450 billion, China is still far ahead of India.
Path to $100 Billion: What Are the Options?
To bridge this gap, India must raise its defence budget to $100 billion. The question is: how?
- Should we disinvest government companies?
- Should we do public-private partnerships in mining and critical sectors?
- Should we borrow?
One option is to focus on defence exports. If our exports keep increasing consistently, we will create financial room, even if we take loans in the short term. As exports grow, the interest on those loans can be covered by sales revenue. This is a feasible approach.
Pakistan: A Reduced Threat—for Now
Now, from China, we come to Pakistan. Thankfully, Pakistan has mismanaged its economy, and as a result, its defence budget is not that high. Pakistan’s defence budget for FY 2024–25 is just $7.64 billion, which is very low. India does not face any direct threat from this and can easily handle Pakistan.
Additionally, Pakistan is facing internal instability. Today’s news says 18 paramilitary personnel were killed in an ambush in Balochistan. Around 60–70 people attacked them. Tensions are also rising on the Afghanistan border.
So, thankfully, for now, in the two-front war, China remains a strong front, but Pakistan appears weak economically and internally. If Pakistan had managed its economy better and maintained a $25–30 billion defence budget, India could have faced serious problems.
The Strategic Dilemma
Just assume that some power above—maybe Lady Luck—is currently supporting India. Thankfully, there is not much threat from Pakistan. But at the same time, looking at these numbers, we have to decide soon:
- Are we going to increase our defence expenditure?
- If not, are we going to look at multi-country security pacts as an option?
Either way, India will have to make a big defence decision in the next five years.
Conclusion
India’s defence budget, while expanding, remains insufficient for the scale of threats it faces from China and Pakistan. To maintain peace and power projection in Asia, India must rethink its defence financing strategy.
Whether through exports, partnerships, or strategic alliances, the road to a $100 billion defence budget needs to be a national priority.
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