ISSN 2330-717X

Strategic Implications Of Indian Defense Budget 2020-2021 – OpEd


The Modi government in its Union budget of India (FY 2020-2021) has allotted USD 66 billion equivalent to INR 471,378 crores for the purpose of military and defense expenditures. There has been significant increase of 13.6 % in the amount allocated for the defense pensions in the new defense budget as the amount allocated is USD 16.3 billion. The overall increase in the military allocation as compared to defense budget of 2019-2020 is INR 40,367.21 crores which indicates 9.37% growth. Out of the central government’s total expenditure for 2020-2021, the military budget is 15.49%. The marginal increase in the Indian defense budget every year depicts India’s long term dream of becoming the regional hegemon. Moreover its neighbors especially Pakistan would need to revise its defense budget to counter the strategic threat posed by continued Indian military modernization.


According to the Stockholm Peace Research Institute (SIPRI) India is among the world’s three biggest military spenders along with China and the US in the year 2019. According to SIPRI India’s military expenditure has increased 6.8% to reach USD 71.1 billion surpassing both Korea and Japan in the past few years. The fact is that the actual military expenditure of India is much more in the past ten years than is shown on the websites and in the international media. India always uses deflated figures to deceive its contemporaries and international media. India also doesn’t provide the hard copy of the memorandum to demands for grants which could provide details regarding India’s mega purchases such as Mi-17 helicopters, carbine rifles, MiG 29 upgrade, advanced jet trainers, airborne warning and control system, low level transportable radar, weapon locating radars etc. Moreover the USD 3 billion defense deal between India and US during trump’s visit to India in February 202 is also a significant step toward military modernization. According to the SIPRI report on global military expenditure, India spends 5 to 6 times more on its defense related purchases as compared to Pakistan.  The purchasing power of Indian defense forces during (FY2019-2020) was 8 times greater than Pakistan. Hence while analyzing the Indian defense budget, actual demands for grants must be considered along with explanatory memoranda.

As compared to the defense budget of 2019-2020 there is 2% increase in the capital outlay of Indian navy and 10% increase in the Indian army. Whereas there has been 2.3% decrease in the budget of Indian air force as compared to the last year. The IAF despite the decrease still remains the force with most purchasing power. IAF is expected to spend a large amount of this capital on manufacturing of Tejas Mk1A aircraft and on Rafale fighter jets which are acquired from France. However, Indian military and defence analysts perceive the increase in defence budget not enough to pay for armor, artillery and air defense systems. Indian navy will also still not be able to acquire advanced submarines. According to the Indian experts the current budget that comprises of 2.1 % of GDP is not sufficient to deter China and Pakistan. India considers the massive increase in the military pensions is the reason behind decrease in the expected GDP. India’s long term dream to increase its influence in the Indian Ocean and enhancing its offensive capabilities seems a bit distant according to the recent defense budget, however India now might spend more amount on building tri-services capabilities in outer space, cyber and special operation domain.

As large amount of India’s defense budget has gone to defense pensions, it has provided Pakistan with a great opportunity to think how to counter India’s growing military developments. Pakistan must import advanced technologies from its friendly neighbors like China and Russia. Pakistan has also been working to improve the accuracy and effectiveness of its strategic arsenals in order to overcome the conventional superiority. India always has this misconception that it is impossible for Pakistan to increase its military budget vis-à-vis India’s. It believes Pakistan cannot catch up with even half of the rise in Indian defense budget as any attempt at increasing in military spending would result in Pakistan’s economic collapse. But all these perceptions of India have been proven wrong by Pakistan in the past. Pakistan has balanced this conventional asymmetry by going nuclear and by building tactical weapons e.g. Nasr.

Hence recent military budget of India shows no change in the strategic threat spectrum from India. But the government of Pakistan needs to revise its military budget in the future. The government has to give priority to naval force modernization in order to counter Indian naval ambitions in coming future. Pakistan must also strengthen its space cooperation with China.

*The writer is working as a Research Affiliate at the Strategic Vision Institute (SVI), a non-partisan think-tank based out of Islamabad, Pakistan. 


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