Defence Budget

China on Thursday hiked its defence budget to USD 275 billion, about USD 25 billion more than last year as it ramped the modernisation of armed forces to catch up with the US military. Roughly 1.9 trillion yuan (about USD 275 billion) will be allocated to national defence, Chinese Premier Li Qiang announced in his work report presented to the National People's Congress (NPC) on Thursday. The report said China's defence spending remains comparatively modest across key relative indicators, including its share of GDP, per capita defence expenditure, and defence expenditure per military personnel, it said. Last year China announced a 7.2-per cent increase for its national defence budget to USD 249 billion for 2025 which is a USD 17 billion rise compared to 2024. China's defence spending, only second to that of the US, has been growing over the years putting enormous pressure on India and other neighbouring countries to scale up their defence budgets in the face of economic challenges.

Operation Sindoor shapes FY27 defence Budget as India lifts spending to 2% of GDP, boosts capital outlay and modernisation to prepare for a potential two-front conflict

The share of domestic firms in the value of capital procurement was 87% in FY25. This level will never fall below 75%

The government's allocation touches 2 per cent of the GDP months after Operation Sindoor and with an eye on modernisation

Defence's share of GDP declined from 2.25 per cent in FY20 to 1.91 per cent in FY25, a level that was maintained in FY26 as well

Key sectors such as defence and railways saw large FY27 allocations in the Budget documents, even though they found little or no mention in Sitharaman's Budget 2026 speech

As the Union Budget 2026 approaches, all eyes are on India’s defence budget and security spending. This video breaks down the Defence Budget using charts and data, explaining defence

Even as it faces active terror threats, the Indian Army's share of defence capital spending has fallen sharply, lagging behind the Air Force and Navy

India may seek a 20% rise in defence modernisation spending next year as the MoD pushes for faster upgrades, stronger exports, and stricter accountability across domestic and foreign defence suppliers

China, which views democratically-governed Taiwan as its own territory, has ramped up military and political pressure over the past five years to assert its claims, which Taipei strongly rejects

Germany's finance minister on Tuesday vowed to lift the country's defense spending to 3.5 per cent of gross domestic product in 2029 as he presented the new government's spending plans. Chancellor Friedrich Merz's coalition pushed plans through parliament to enable higher defence spending by loosening strict rules on incurring debt even before it took office last month. It acted ahead of the NATO summit starting Tuesday that aims to raise allies' defence spending target from 2 per cent of GDP to 3.5 per cent, plus another 1.5 per cent for potentially defense-related infrastructure. Finance Minister Lars Klingbeil said Germany's defence spending will hit 2.4 per cent of GDP this year, and we will raise defence spending step by step so that we will reach a NATO quota of 3.5 per cent in 2029. Klingbeil, who is also the vice chancellor, said he will be very vigilant that the money is spent efficiently, for example by aiming for greater cooperation at European level on procurement, ...

Japan and other US allies have been engaged in difficult trade talks with the United States over President Trump's worldwide tariff offensive

Experts say increasing the defence budget as a share of GDP even by a single basis point could significantly increase access to funds

The report notes that achieving the vision of India as a developed nation by 2047, particularly through a strengthened defence sector, faces several roadblocks and challenges

China's most advanced aircraft carrier Fujian, equipped with electromagnetic catapults, has completed its eighth sea trial

A Kargil-style squeeze on public finances is unlikely in 2025, but rising defence demands may challenge Nirmala Sitharaman's consolidation strategy