Archive · 17 Sep 2026
India’s Defence Spending Trails China Despite Asia’s Second Rank
India spends the second-most on defence in Asia, excluding Japan.
However, China spends more than three times as much in total.
India also uses a smaller share of its budget to buy new weapons and equipment.
Much of India’s money goes toward salaries, pensions, operations and maintenance.
This means India spends less on each soldier than China and has fewer major military assets.
India still imports many weapons, but those imports have been declining as local production grows.
Equipment used during Operation Sindoor helped show that some Indian-made systems can work in combat.
The government is directing more defence purchases toward Indian companies.
Jefferies expects domestic defence spending to grow faster than total defence capital spending in the coming years.
India is Asia’s second-largest defence spender excluding Japan, but its budget is less than one-third of China’s.
India allocates about 25% of its defence budget to capital spending, compared with an estimated 40–60% in China and the United States.
India spends less than half as much per soldier as China and has fewer submarines, aircraft and tanks.
India’s defence imports declined from 2014 to 2025 as overall spending rose, reflecting its push for domestic production.
Jefferies expects India’s overall defence capital spending to grow 10% annually through 2030, with domestic spending growing 16% annually.
- Who
- India, China and the United States are compared in a Jefferies defence-spending analysis.
- What
- The analysis examines India’s defence budget, military capabilities, arms imports and domestic manufacturing outlook.
- When
- The comparisons cover recent spending and inventories, with import trends through 2025 and projections for financial years 2026–2030.
- Where
- The comparison focuses on India’s position in Asia and its capabilities relative to China and the United States.
- Why
- India’s larger GDP share of defence spending has not fully translated into equipment and military capability because its total budget and capital-spending share are lower.
- India’s Asian rank
- Second-largest defence spender in Asia, excluding Japan.
- India versus China
- India’s overall defence budget is less than one-third of China’s.
- Capital spending
- About 25% of India’s defence budget, compared with an estimated 40–60% in China and the United States.
- Spending per soldier
- India spends less than half as much per soldier as China.
- Military assets
- India has about 18 submarines, 2,183 aircraft and 3,913 tanks.
- Arms imports
- India accounted for about 9% of global defence imports in 2025 and remained one of the top two importers.
- Capital-spending outlook
- India’s overall defence capital spending is projected to grow 10% annually through 2030, while domestic spending is projected to grow 16% annually.
- Domestic procurement
- 75% of the capital procurement budget is earmarked for domestic sourcing.