India Defense Budget Drops As Government Focuses On Jobs

Indian Army soldiers during a parade in New Delhi.

(Bloomberg) -- India left its defense budget for the current fiscal year largely unchanged, while still spending more on military equipment in the face of rising geopolitical turmoil in the region.

The government allocated 6.24 trillion rupees ($74.3 billion) for defense in the year through March 2025, largely unchanged from a revised budget of 6.21 trillion rupees in the previous financial year. The figures include spending on salaries, pensions and military equipment, making the defense expenditure the largest category in the government's budget.

While India is among the world's top five defense spenders, most of the funds go toward paying the salaries for its over 1.4million-strong military as well as pensions for retired soldiers. Last year, the South Asian country spent 1.42 trillion rupees — more than a quarter of the defense budget — on pensions, according to the country's parliament. India will spend a similar amount this year.

Despite the curb on the overall defense budget, the military will spend more on new equipment: 1.72 trillion rupees in the current fiscal year compared with a revised 1.57 trillion last year.

The spending curb comes at a time of geopolitical turmoil and as India's relations with two of its neighbors — Pakistan and China — remain fraught. The military has long list of new equipment it wants to buy, including long range unmanned aerial vehicles from the US, fighter jets for navy, submarines to replace aging Soviet-era boats.

India's defense expenditure is less than a third of China's defense spending, which is estimated to be $231.36 billion, according to figures from the state-owned Global Times.

“Allocation for new systems and platforms falls short especially because western and northern borders are still unstable and the Indo-Pacific is militarizing,” said Laxman Kumar Behera, who teaches at Jawaharlal Nehru University's Special Centre for National Security Studies in New Delhi. India should consider a road map for defense modernization like it has for other sectors to lock in a certain amount annually in the budget, he added.

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