DefenceDefence Industry

India Boosts Defence Budget To $72.6 Billion Amid China Worries

Story Highlights
  • India would spend 242 billion rupees ($3 billion) on naval fleet construction and 571.4 billion rupees ($7 billion) on air force procurements, including more aircraft.
  • China's 1.45 trillion yuan ($230 billion) defence budget for 2022, which New Delhi views as a danger to India and Japan, is higher than India's 2% GDP defence spending.

To increase its defence capabilities along its sensitive border with China, India proposed on Wednesday a defence budget of 5.94 trillion rupees ($72.6 billion), an increase of 13% from the initial estimates for the previous period.

In April, Finance Minister Nirmala Sitharaman announced over $550 billion in federal expenditures for 2023-24, including 1.63 trillion rupees for defence capital outlays, which includes new weapons, aircraft, warships, and other military hardware.

In 2023-24, 2.77 trillion rupees would be spent on military salaries and benefits, 1.38 trillion on pensions for retiring soldiers, and other items.

China’s 1.45 trillion yuan ($230 billion) defence budget for 2022, which New Delhi views as a danger to India and Japan, is higher than India’s 2% GDP defence spending.

“The overall rise in the armed forces’ budget is as anticipated, but possibly lower than what they sought for to build up operational capabilities,” said former Defence Ministry finance adviser for acquisitions Amit Cowshish.

According to the new budget, India would spend 242 billion rupees ($3 billion) on naval fleet construction and 571.4 billion rupees ($7 billion) on air force procurements, including more aircraft.

Since 1950, India and China have disputed a 3,500-kilometre (2,100-mile) border. It sparked a 1962 war.

In 2020, the armies of the Asian giants clashed in Ladakh, in the western Himalayas, killing at least 24 soldiers. Military and diplomatic discussions eased tensions.

Sitharaman increased the defence budget for the current financial year ending in March to 5.85 trillion rupees from 5.25 trillion.

In recent years, Prime Minister Narendra Modi has increased expenditures to modernise the military and emphasised his government’s commitment to increasing domestic production to support forces posted along two disputed borders.

The defence budget increase was “fair but not sufficient,” according to Jawaharlal Nehru University’s Laxman Behera.

“The government has sought to allot fair amounts for defence forces while balancing other objectives during the pre-election budget,” he added, adding that India required more funds due to increased tension with China along disputed boundaries.

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