India’s Fifth Largest Military Spending Rank by SIPRI – A Reality Check

The latest report on global military spending published by the Stockholm International Peace Research Institute (SIPRI) on 02 May has placed India as the fifth largest defence spender in the World in 2017. SIPRI attributes increase in the global military expenditure in recent years to, “substantial growth in spending by countries in Asia and Oceania and the Middle East, such as China, India and Saudi Arabia”. This Asian triumvirate is amongst the top five which also includes the United States quite clearly topping the chart and Russia.

Listing of the United States, China, Russia and India is not surprising and reflects the reality of status – political and economic in the geo-politics of today. While India is not a permanent member of the UN Security Council, Delhi is a key stakeholder in peace and stability reflected in the contribution to UN Peacekeeping and the role of regional “net security provider” ascribed over the years.

States with large military spending could be divided into three main groups. The first is the United States and China which have budgets running in hundreds of billions of dollars each year. The second is countries like India, Russia, Saudi Arabia, Japan, France, Germany and South Korea with spending between $ 40 billion to $ 60 billion plus. The third group is the median powers like Italy, Australia and Brazil capping budgets around $ 30 billion. Against this backdrop a review of India’s defence spending estimated at $ 63.9 Billion for 2017¹ may be called for as the comparative hierarchy of ‘fifth largest expenditure’ does not provide the correct perspective.

The amount a nation spends on the armed forces is determined by national aspirations, threat perceptions and affordability. As a status quo power, India’s aspirations are restricted to building global peace and harmony through soft tools rather than military force. Thus India’s defence spending is primarily dictated by the latter two factors - threat perceptions and affordability.

Regarding threat environment facing the country, it is well accepted that India faces what its military leaders have several times called a “Two Front,” scenario that is potential concomitant adversarial engagement with China and Pakistan on the Northern and Western borders respectively. Both are also nuclear armed states. A Two and a Half Front may be a more realistic, appraisal of the “Half Front” being the challenge of terrorism and insurgency.

Importantly, China’s increasing investment in modernisation of the People’s Liberation Army is reflected in the $ 228 Billion for defence in 2017, part of which is aspirational to take up global leadership as was revealed in numerous statements made during the 19th Communist Party Congress in October 2017. Reflecting this ambition, China’s defence budget grew by 12 % in 2017 as against India’s by 5.5 percent, as per the SIPRI.

Threat comprises of intention and capability, while the intent may change overnight, military capabilities building takes decades. Thus substantial investment in the military is axiomatic for India. In terms of affordability, India faces the eternal dilemma of developing countries: guns versus butter. Given the state of human development Indian leadership has consistently prioritised the same over military expenditure. Thus subsidy is generally the most significant head of the government budget in India. As a result, the strategic community in India has consistently complained of scarcity of resources for defence capability and capacity building. So much so the Parliamentary Standing Committee on Defence has time and again castigated the Ministry of Finance for not providing enough budgetary resources to the military, and the Ministry of Defence for failing to pursue the demands of the armed forces.

A comparative analysis of statistics also reflects low spending on defence by India which is estimated at 1.58% of the GDP for 2018-19.² The SIPRI global average for 2017 is 2.2 %. This would imply a 29 % deficit in the Indian spending compared to what militaries are budgeting worldwide. Regarding military expenditure as a percentage of overall government expenses, India is once again very modest at 12.20 % in 2017-18. As seen from the facts quoted, the ranking of fifth largest military expenditure in the SIPRI annual global spending review does not reflect splurging by India on defence but rather below par allocations.

The other critique of Indian defence budget is skewed allocations between manpower and capital acquisitions. To meet the Half Front – counter-terrorism and insurgency challenge - there is a need for large numbers, boots on the ground so to say. Added to this is a large tract of mountainous terrain in the North. It is a well-known axiom that mountains eat away troops. Reduction in manpower would, therefore, be unrealistic. Efficiency in defence spending is however grossly inadequate and it should require focus through grounding in financial planning, defence acquisitions and budget management.

As for meeting the threats, Kautilya, the wise Indian sage reflecting on constituents of power in 321 BC, identifies ‘military might’ as one amongst three attributes – the others being ‘counsel and correct judgement’ and ‘enthusiasm and energy’. India appears to be relying on the judgement of the national leadership and vigour of its armed forces to withstand security challenges, spending what is optimally affordable on its military.

Endnotes

1 SIPRI defence expenditure is based on calendar year, whereas India’s budget year is from April to March.

2 Estimates based on expenditure on armed forces budget. See Rajat Pandit. Budget 2018: Govt hikes defence budget by 7.81%, but it's just 1.58% of GDP & lowest since 1962. Available at https://timesofindia.indiatimes.com/india/budget-2018-govt-hikes-defence-budget-by-7-81/articleshow/62740525.cms [3]

(The paper does not necessarily represent the organisational stance. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct).