India is poised to further expand its defence budget over the next decade to sustain readiness for a potential two-front conflict with regional adversaries China and Pakistan, while enhancing its regional and global stature. Total defence spending, inclusive of pensions, is projected to reach $415.9 billion from 2025 to 2029, marking a compound annual growth rate (CAGR) of 3.7%, forecasts GlobalData, a data and analytics company.
GlobalData’s latest report, “India Defense Market Size, Trends, Budget Allocation, Regulations, Acquisitions, Competitive Landscape and Forecast to 2029,” reveals that India’s expenditure on defense acquisition recorded cumulative spending of $93.6 billion over the period 2020-24.
Akash Pratim Debbarma, Aerospace & Defense Analyst at GlobalData, comments: “The increase in India’s acquisition budget is largely attributed to the procurement of both indigenous and imported military platforms such as Nuclear-Powered Attack Submarines, Nilgiri-class frigates, Rafale multirole aircraft, Tejas Mark 1A multirole aircraft, Prachand Helicopters and Zorawar main battle tanks among many others. India’s strong economic growth over the last decade has also contributed in driving the country’s spending capacity in defence.”
India’s need to modernise its defence inventory while reducing dependence on imports has provided a significant impetus to its domestic defence industry and driven investments into R&D.
Debbarma adds: “Many domestic companies from the private sector have jumped in to cater to the growing demand from Indian Armed Forces. Prominent private companies that are presently serving the ongoing orders from Indian Armed Forces include Tata Advanced Systems, Bharat Forge, L&T Defense, and Adani Defence and Aerospace.”
GlobalData forecasts India to spend about $93.5 billion for the procurement of indigenous military platforms over the period 2024-29.
Considering the challenge posed by the expanding influence of China’s People’s Liberation Army Navy (PLAN) in the Indian Ocean Region, India has also decided to enhance and expand its naval defence capabilities. Specific emphasis is being placed on developing the blue-water proficiencies of the Indian Navy.
India has recently allocated funds to build six nuclear-powered attack submarines (SSN), signalling its commitment to safeguard its territorial waters from undersea threats and protect its in-service fleet of nuclear-powered attack submarines (SSBN) to ensure sustenance of the country’s nuclear triad. These SSNs will also deter China’s forays into India’s area of influence in the Indo-Pacific.
Debbarma concludes: “Ahead of the 16th BRICS summit in October 2024, India and China reached an agreement on patrolling rights and initiated border disengagement, viewed as a constructive step toward normalising relations between the two Asian powers. However, skepticism towards China especially after the deadly skirmishes of Galwan Valley in May 2020, will compel India to maintain the preparedness levels of its armed services, which in turn will drive the country’s defence budget over the next decade.”
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