Amid tensions with China, India has increased its defense budget to $72.6 billion. Finance Minister Nirmala Sitharaman allocated 1.63 trillion rupees for defense capital.
India on Wednesday proposed 5.94 trillion rupees ($72.6 billion) in defense spending for the 2023-24 fiscal year, up 13% from preliminary estimates for the previous period, with the aim of adding more fighter jets and routes along its tense border with China.
Finance Minister Nirmala Sitharaman has earmarked 1.63 trillion rupees for defense capital expenditures – spending that will include new weapons, aircraft, warships and other military equipment, as she disclosed nearly $550 billion in total federal spending in the 2023-24 annual budget starting in April.
It said 2.77 trillion rupees will be allocated to army salaries and benefits in 2023-24, 1.38 trillion to pensions of retired soldiers, and other sums for miscellaneous items.
Sitharaman also revised the defense budget for the current fiscal year ending in March to 5.85 trillion rupees from the earlier estimate of 5.25 trillion rupees.
In the past few years, Prime Minister Narendra Modi has ramped up spending to modernize the military, while stressing his government’s commitment to boosting domestic production to supply forces deployed along two contentious borders.
Laxman Behera, a defense expert at the government-funded Jawaharlal Nehru University in New Delhi, said the increase in the defense budget was “reasonable but not sufficient”, given the demands of military modernization.
“The government has tried to allocate reasonable funds to the defense force while balancing other priorities during the pre-election budget,” he said, noting that India needed more money in light of growing friction with China along the disputed border.
India’s total defense budget, estimated at about 2 percent of GDP, remains short of China’s 1.45 trillion yuan ($230 billion) appropriation for 2022, which New Delhi sees as a threat to neighbors including India and Japan.
“The overall increase in the armed forces’ budget is as expected, but it is probably less than what they asked for to enhance operational capabilities,” said Amit Koshish, a former financial advisor for acquisitions at the Ministry of Defense.
The latest budget document showed that India plans to spend nearly 242 billion rupees ($3 billion) to build a navy and 571.4 billion rupees ($7 billion) to buy the air force including more planes.
The South Asian giant employs 1.38 million people in its armed forces, with significant numbers deployed along the borders with nuclear rivals China and Pakistan.
Although defense budget allocations were lower than military projections, they are likely to grow as the economy recovers from two years of pandemic restrictions, according to Al-Buhaira.
India and China share a 3,500-kilometer (2,100-mile) border that has been disputed since the 1950s. Both sides fought a war over it in 1962.
At least 24 soldiers were killed when armies of Asian giants clashed in Ladakh in the western Himalayas in 2020, but tensions eased after military and diplomatic talks.
A new clash erupted in the eastern Himalayas in December last year, but there were no reports of any deaths.
