In 1962, as Indian troops scrambled to hold their positions against a well-prepared Chinese army in the Himalayas, one stark reality became clear, India had underestimated its neighbour’s military might. In battles like the Battle of Rezang La, Indian soldiers faced massive disadvantages due to three key factors: the high mountain crests prevented artillery support, they lacked proper acclimatisation to the extreme winter conditions, and they were equipped with outdated .303 bolt-action rifles from World War II.
The war ended in humiliation for India, and a realisation dawned that defence preparedness could never be an afterthought again. Fast forward to today, and the stakes are even higher. China is a global superpower, expanding its military at breakneck speed, while India is also striving to keep pace.
Despite shared histories of ancient empires and independence struggles, the two Asian giants are on vastly different trajectories when it comes to military spending. As tensions continue to simmer along the Line of Actual Control (LAC) and in the Indo-Pacific, how do their defence budgets compare, and what does it mean for the future of regional security?
The Numbers: How India and China Stack Up
For the fiscal year 2025-26, India has allocated Rs. 6.81 lakh crore ($81 billion) for defence, marking a 9.5% increase over the previous years. This continues a decade-long trend, with India’s defence budget nearly tripling from Rs. 2.53 lakh crore in 2014. However, despite these increases, India’s military spending remains far below China’s enormous $249 billion (¥1.78 trillion) budget for 2025, which itself represents a 7.2% increase from the previous year.
But these official figures don’t tell the full story. Experts estimate that China’s actual military spending is 40-50% higher than reported, as Beijing allocates funds under different categories to mask its true defence expenditure. That would put China’s real defence budget at around $350 billion, i.e. over four times India’s defence spending.
Where Does the Money Go?
India’s Defence Budget Breakdown (FY 2025-26):
- Capital Expenditure (new acquisitions): Rs 1.92 lakh crore ($23 billion)
- Revenue Expenditure (salaries, pensions, maintenance): Rs 4.88 lakh crore ($58 billion)
- Pensions: Rs 1.60 lakh crore ($19 billion)
- Air Force Allocation: Rs 48,614 crore ($5.8 billion)
- Navy Fleet Allocation: Rs 24,390 crore ($2.9 billion)
Meanwhile, China’s defence budget focuses on:
- Modernising the 2-million-strong People’s Liberation Army (PLA)
- Expanding its naval presence (China now boasts the world’s largest navy, with over 370 warships and submarines)
- Developing next-generation fighter jets, including the J-20 and the upcoming J-35
- Strengthening nuclear deterrence, with over 600 operational warheads, projected to surpass 1,000 by 2035
- Enhancing cyber and space warfare capabilities
China’s Military Expansion: The Global Power Play
China’s defence spending is not focused a lot on India, it is about challenging U.S. dominance in the Indo-Pacific and ensuring military superiority over Taiwan, Japan, and other regional powers. With over 600 warheads and rapid stockpile expansion, China is building the world’s third-largest nuclear force, far outpacing India’s estimated 160-170 warheads.
Beijing has established a military base in Djibouti and is increasing its influence in the Indian Ocean through infrastructure projects in Sri Lanka, Pakistan, and Africa. At the heart of China’s strategy is its “anti-access/area denial” (A2/AD) doctrine, aimed at preventing foreign intervention in Taiwan and asserting dominance in the South and East China Seas.
Air Power
China’s People’s Liberation Army Air Force (PLAAF) is the third-largest air force in the world, with an estimated 3,400 combat aircraft, including over 1,500 fighter jets. India’s Indian Air Force (IAF), in comparison, operates around 1,645 aircraft, with roughly 650 fighter jets.
However, beyond sheer numbers, the quality of fighter jets matters. Here’s how India and China’s frontline aircraft compare:
Fifth-Generation Stealth Fighters
| Jet | Country | Stealth Capabilities | Max Speed | Combat Range | Weapons |
|---|---|---|---|---|---|
| J-20 (Mighty Dragon) | China | Yes | Mach 2.0 | 2,000 km | PL-15 long-range missiles |
| Su-57 (Potential Indian Variant) | Russia (proposed for India) | Yes | Mach 2.0 | 1,500 km | R-77 & R-37 missiles |
| F-35 (Offered to India) | U.S. | Yes | Mach 1.6 | 2,200 km | AIM-120 & AIM-9X missiles |
- China’s J-20 “Mighty Dragon” is already operational and has been deployed at airbases near the LAC, making it a direct concern for India.
- India currently lacks a fifth-generation fighter, though it is developing the Advanced Medium Combat Aircraft (AMCA) domestically.
Fourth-Generation Fighter Jets
India currently relies on a mix of Russian and European fourth-generation jets, whereas China has indigenised much of its fleet.
| Jet | Country | Max Speed | Combat Range | Weapons |
|---|---|---|---|---|
| Sukhoi Su-30MKI | India | Mach 2.0 | 3,000 km | BrahMos, Astra missiles |
| Rafale | India (France) | Mach 1.8 | 1,850 km | Meteor, Scalp missiles |
| J-16 | China | Mach 2.0 | 3,900 km | PL-15 missiles |
| J-10C | China | Mach 1.8 | 2,500 km | PL-10 missiles |
- The Rafale gives India an edge with Meteor BVRAAM (Beyond Visual Range Air-to-Air Missiles), which can strike at 150+ km, whereas China’s PL-15 missile reaches similar ranges.
- India’s Su-30MKI is versatile but faces maintenance issues, whereas China’s J-16 is a direct competitor with better avionics and electronic warfare capabilities.
Naval Strength
China is rapidly expanding its naval power, while India is playing catch-up in the Indian Ocean Region (IOR).
| Metric | India | China |
|---|---|---|
| Total Warships | 130+ | 370+ |
| Aircraft Carriers | 2 operational (Vikrant, Vikramaditya) | 3 (Liaoning, Shandong, Fujian) |
| Submarines | 17 (incl. nuclear) | 70+ |
| Destroyers | 11 | 50+ |
| Frigates | 13 | 40+ |
- China outnumbers India nearly 3:1 in total naval strength.
- India has two aircraft carriers, while China has already built three and plans to field six by 2030.
- China is expanding its influence in the Indian Ocean, financing ports in Pakistan (Gwadar), Sri Lanka (Hambantota), and Djibouti.
Missile Capabilities
India and China both have extensive ballistic and cruise missile arsenals.
Ballistic Missiles
| Missile | Country | Range | Nuclear Capable? |
|---|---|---|---|
| Agni-V | India | 5,500 km | Yes |
| DF-41 | China | 12,000 km | Yes |
| DF-26 (Carrier Killer) | China | 4,000 km | Yes |
- China’s DF-41 is one of the longest-range missiles in the world, covering the entire U.S. mainland.
- India’s Agni-V is formidable but has a lower range compared to China’s ICBMs (Intercontinental Ballistic Missiles).
Cruise Missiles
| Missile | Country | Range | Speed |
|---|---|---|---|
| BrahMos | India | 450 km | Mach 3.0 |
| CJ-10 | China | 1,500 km | Subsonic |
- India’s BrahMos (Mach 3.0 speed) gives it a major advantage in short-range precision strikes.
- China’s CJ-10 can reach further, but at subsonic speeds, making it easier to intercept.
India’s Challenges: Modernisation vs. Budget Constraints
India’s defence spending, while substantial, faces big challenges that hinder its modernisation efforts. A major concern is heavy personnel costs, with nearly 75% of the budget allocated to salaries and pensions, leaving only about 25% for new acquisitions and technological upgrades. This financial strain impacts critical areas, particularly the Indian Air Force, which currently operates only 30 fighter squadrons against the sanctioned 42.5, relying on ageing MiG-21s and facing delays in the production of indigenous Tejas fighters.
The Indian Navy also struggles to keep pace with China’s rapidly expanding maritime power. With only 130 combat vessels, it faces setbacks in aircraft carrier production and overall fleet modernisation. Meanwhile, India’s push for self-reliance through projects like Tejas Mk2, the AMCA, and indigenous submarines is progressing slower than expected. Dependence on foreign suppliers, such as General Electric for jet engines, further complicates efforts. These challenges highlight the urgent need for faster execution, better budget allocation, and stronger domestic defence manufacturing to close the growing gap with China.
India should increase its defence budget to at least 2.5% of GDP, instead of just 1.9%, to ensure credible deterrence against China and Pakistan.
Comparing Defence Strategies: India vs. China
| Aspect | India | China |
| Budget (2025-26) | $81 billion | $249 billion+ (estimated real spending ~$350B) |
| GDP Allocation | 1.9% | ~2% (official), estimated real ~3-4% |
| Active Troops | 1.4 million | 2 million |
| Navy Strength | ~130 combat vessels | 370+ warships and submarines |
| Air Force Strength | 30 fighter squadrons (needs 42.5) | J-20, J-35, 6th-gen prototypes in development |
| Nuclear Warheads | ~170 | 600+ (expected to exceed 1,000 by 2035) |
Geopolitical Implications: The Bigger Picture
China’s growing defence budget, aggressive naval expansion, and deepening ties with Pakistan pose a long-term challenge to India. Beijing has been supplying Islamabad with advanced fighter jets, submarines, and missile technology, ensuring a two-front security concern for New Delhi.
India is also not without options.
- The U.S. and Western alliances: While India values strategic autonomy, its partnerships with the U.S., France, and Israel are growing stronger. Deals like General Electric’s F-414 engine co-production, the Rafale fighter jets, and S-400 missile systems from Russia are helping close capability gaps.
- Quad and Indo-Pacific Strategy: India’s involvement in QUAD (with the U.S., Japan, and Australia) signals its intent to counterbalance China’s growing influence.
- Strengthening Domestic Defence Manufacturing: Initiatives like Make in India and private-sector participation aim to reduce dependence on foreign imports. However, execution remains a challenge.
Can India Catch Up?
India’s response to China’s military expansion must focus on smart spending, rapid modernisation, and strengthening indigenous production. Simply increasing the budget is not enough, funds must be effectively allocated to ensure technological advancements and combat readiness.
- Accelerating Indigenous Development: Projects like Tejas Mk2, AMCA, and the Advanced Submarine Programme must be fast-tracked.
- Boosting Capital Expenditure: More funds should go towards acquiring next-gen fighters, naval assets, and cyber warfare capabilities.
- Expanding Defence Ties: Strengthening partnerships with France (Rafale), the U.S. (drones, engines), and Israel (missile defence) can bridge critical gaps.
- Strategic Maritime Expansion: India needs a stronger Blue Water Navy to counter China’s influence in the Indian Ocean.
The India-China defence gap is significant, but New Delhi has the advantage of strategic partnerships, indigenous potential, and a growing economy. The key question is if India can modernise fast enough to keep pace with an increasingly assertive China?
