Budget 2024: India trails China in defence spending, but must fill the 'insufficient' allocation

Allocating a robust amount to bolster military capabilities has emerged as a pivotal strategy for governments seeking to fortify their defences against foreign powers. Finance Minister Nirmala Sitharaman is set to present the Union Budget on July 23 and experts predict a higher allocation for the defence sector in the upcoming budget, continuing the trend of previous years.

For India, the focus seems to have shifted from the early Independence decades, wherein most of the focus was on our neighbour Pakistan. But now, as India grows in stature and power, China has emerged as a formidable country and a neighbour that India has had a few skirmishes. To step up the defences, India's strategy must focus on keeping China at bay.

China’s adventures with the littorals of the South China Sea hint at preparedness on the part of India considering the world conflict scenario, says Dr Amit Singh Associate Professor, Special Centre for National Security Studies, JNU. All the more when Chinese manoeuvring at the LAC and LOC poses challenges for India's defence sector to defend its territorial integrity, he says.


“India’s defence budget is expected to cater to the rapidly changing geo-political scenarios at the global stage instantaneously. India may tackle some of these security challenges by increasing the defence budget significantly,” he adds.

We take a look at how India’s defence budget compares to that of China’s.

China’s defence budget:
For any analysis of China's military spending, it's in order to begin with a disclaimer — the numbers issued by the Chinese government and as such, must be taken with a grain of salt.

China in March announced its defence budget for 2024 and interestingly maintained the growth rate of its military expenditure at precisely the same percentage as last year, as Chairman Xi Jinping continues to prioritize the People's Liberation Army (PLA) at the expense of other sectors of government funding.

China’s defence budget for 2024 will rise 7.2 per cent to Chinese Yuan (CNY) 1.66554 trillion, which equates to USD 231.4 billion.

As a proportion of GDP, China’s core defence budget amounted to 1.25 per cent, well below the global average of 1.8 per cent and the 2 per cent target for NATO countries, according to a report by the International Institute for Strategic Studies (IISS).

Putting China's spending in proper regional perspective, it is twelve times that of Taiwan's and four times as much as Japan's defence expenditure.

India’s defence budget vs China’s:
Despite the economic slowdown of China, the country has doubled its defence expenditure since 2015, says Dr Singh. “In the Interim budget 2024-25, the Modi government allocated approx $75 billion which is not sufficient given the threat perception faced by India from China,” he adds.

Sitharaman disclosed the allocation of a staggering Rs 6.21 lakh crore for India's Ministry of Defence during the Interim Budget presentation in February. This marked a 4.3 per cent increase from the previous year, constituting a substantial portion of the Union Budget at 13.04 per cent.

The Union Budget is expected to be an extension of the Interim Budget itself, as per experts.

Defence Minister Rajnath Singh in October 2023 said that India needs stronger armed forces with modern equipment in order to become a developed country by 2047 when we celebrate 100 years of Independence.

At present, Modi 3.0 is loading and the defence sector is expecting that the government should spend at least 25 per cent of the central government’s total expenditure every year, Dr Singh says. “Consequently, India can ‘handle’ the threat perception at the LAC/LOC and their neighbourhood.”

Expectations for defence allocation:
Going by the threat perception faced by India from China and Pakistan including the current geopolitical scenario, Dr Singh says India should spend at least 25 per cent of the central government’s total expenditure in the coming budget.