‘Military expenditures of India third highest in world after US, China’



MoS Defense, Ajay Bhatt, quotes SIPRI data in Lok Sabha reply

Military expenditures of India were the third highest in the world in 2021, US and China being the top two. Minister of State for Defense, Ajay Bhatt, made this revelation on July 29 while answering to a question during the monsoon session of the Parliament in New Delhi.

In reply to a question posed by a member of parliament (MP) of the All India Trinamool Congress, Nusrat Jahan Ruhi, Bhatt stated: “Ministry of Defense does not maintain expenditure data of other countries. However, as per data available on Stockholm International Peace Research Institute (SIPRI)’s website, India’s Military spending for the year 2021 is ranked as third highest in the world.”

Bhatt quoted SIPRI’s data to say that in 2021 the military expenditure of US was $ 800,672.20 million; China’s defense expenses were worth $ 293,351.90 million and India was ranked third with $ 76,598 million.

Bhatt, in his reply in the Parliament, added that during 2017-21, the percentage of Foreign Procurement (both Revenue and Capital) made for the purchase of Stores/Defence Equipment has been in the range of 33.97% – 41.60%.”

On defense manufacturing projects taken up under India’s ‘Make in India’ campaign, Bhatt stated: “The Ministry of Defense for industry-led Design & Development under Make I, Make II, SPV Model and iDEX routes has approved 18 major platforms. The share of domestic procurement in total procurement has been on an uptrend. In 2018-19, domestic procurement stood at 54% of the total procurement, this figure jumped to 59% in 2019-20 and to 64% in 2020-21. This year it is targeted to further increase the share of domestic procurement to 68%.”

“An innovation ecosystem for Defense titled Innovations for Defense Excellence (iDEX) has been launched in April 2018 to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, Start-ups, Individual Innovators, R&D institutes and Academia, and provide them grants/funding and other support to carry out R&D which has potential for future adoption for Indian defense and aerospace needs. So far, 125 problems have been opened, 136 start-ups have been engaged, 95 contracts have been signed,” the minister added.

‘iDEX Prime’ framework under iDEX has been launched in 2022 to support start-ups with Grant-in-Aid up to Rs. 10 crore to enable the development of high-end solutions.

The government of India has also approved a scheme with an outlay of Rs. 498.78 crores (2021-22 to 2025-26) to push innovation and support start-ups in the defense and aerospace sector. “This will enable more than 300 start-ups to participate in the new design and development projects and also support 20 partner incubators,” he said.

Bhatt added, “As part of the efforts to achieve self-reliance in defense manufacturing and minimize imports by the DPSUs, a positive indigenization list has been notified by the department. The list contains 2,500 imported items that have already been indigenized and 351 high-value imported items which will be indigenized in next 3 years. Out of 351 items, 147 items have already been indigenized.”

SIPRI Data Deciphered

Here are some highlights of the information on military expenditures provided by SIPRI:

The SIPRI data that was published in April reveals that total global military expenditure increased by 0.7 per cent in real terms in 2021, to reach $2113 billion. According to the new data on global military spending published by SIPRI, “The five largest spenders in 2021 were the United States, China, India, the United Kingdom and Russia, together accounting for 62 percent of expenditure.”

A statement issued by SIPRI to media stated: “World military spending continued to grow in 2021, reaching an all-time high of $2.1 trillion. This was the seventh consecutive year that spending increased.”

“Even amid the economic fallout of the Covid-19 pandemic, world military spending hit record levels,” said Dr Diego Lopes da Silva, Senior Researcher with SIPRI’s Military Expenditure and Arms Production Program. “There was a slowdown in the rate of real-terms growth due to inflation. In nominal terms, however, military spending grew by 6.1 percent.”

US-focused its energies on military research and development in 2021. The SIPRI communique highlighted that the US military spending amounted to $801 billion in 2021, a drop of 1.4 percent as compared to 2020. The US military burden decreased slightly from 3.7 percent of GDP in 2020 to 3.5 percent in 2021.

US funding for military research and development (R&D) rose by 24 percent between 2012 and 2021, while arms procurement funding fell by 6.4 percent over the same period. In 2021 spending on both decreased. However, the drop in R&D spending (–1.2 percent) was smaller than that in arms procurement spending (–5.4 percent).

“The increase in R&D spending over the decade 2012–21 suggests that the United States is focusing more on next-generation technologies,” said Alexandra Marksteiner, Researcher with SIPRI’s Military Expenditure and Arms Production Program. “The US Government has repeatedly stressed the need to preserve the US military’s technological edge over strategic competitors.”

In the run-up to the war, Russia had increased its military budget. SIPRI stated: “Russia increased its military expenditure by 2.9 percent in 2021, to $65.9 billion, at a time when it was building up its forces along the Ukrainian border. This was the third consecutive year of growth and Russia’s military spending reached 4.1 percent of GDP in 2021.

“High oil and gas revenues helped Russia to boost its military spending in 2021. Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014,” said Lucie Béraud-Sudreau, Director of SIPRI’s Military Expenditure and Arms Production Program.

The ‘national defense’ budget line, which accounts for around three-quarters of Russia’s total military spending and includes funding for operational costs as well as arms procurement, was revised upwards over the course of the year. The final figure was $48.4 billion, 14 percent higher than had been budgeted at the end of 2020.

As it strengthened its defense against Russia, Ukraine’s military spending rose by 72 percent since the annexation of Crimea in 2014. Spending fell in 2021, to $5.9 billion, but still accounted for 3.2 percent of the country’s GDP.

Shifting focus to Asia and Oceania, SIPRI’s statement highlighted China, the world’s second-largest spender. China had allocated an estimated $293 billion to its military in 2021, an increase of 4.7 percent compared with 2020. China’s military spending has grown for 27 consecutive years. The 2021 Chinese budget was the first under the 14th Five-Year Plan, which runs until 2025.

The Japanese Government added $7.0 billion to military spending. As a result, spending rose by 7.3 percent, to $54.1 billion in 2021, the highest annual increase since 1972. Australian military spending also increased in 2021: by 4.0 percent, to reach $31.8 billion.

“China’s growing assertiveness in and around the South and the East China seas have become a major driver of military spending in countries such as Australia and Japan,” said SIPRI Senior Researcher Dr Nan Tian. “An example is the AUKUS trilateral security agreement between Australia, the United Kingdom and the United States that foresees the supply of eight nuclear-powered submarines to Australia at an estimated cost of up to $128 billion.”

Other notable world developments highlighted by SIPRI:

India’s military spending of $76.6 billion ranked third highest in the world. This was up by 0.9 percent from 2020 and by 33 percent from 2012. In a push to strengthen the indigenous arms industry, 64 percent of capital outlays in the military budget of 2021 were earmarked for acquisitions of domestically produced arms.

In 2021 Iran’s military budget increased for the first time in four years, to $24.6 billion. Funding for the Islamic Revolutionary Guard Corps continued to grow in 2021—by 14 percent compared with 2020—and accounted for 34 percent of Iran’s total military spending.

Eight European North Atlantic Treaty Organization (NATO) members reached the Alliance’s target of spending 2 per cent or more of GDP on their armed forces in 2021. This is one fewer than in 2020 but up from two in 2014.

Nigeria raised its military spending by 56 percent in 2021, to reach $4.5 billion. The rise came in response to numerous security challenges such as violent extremism and separatist insurgencies.

Germany—the third largest spender in Central and Western Europe—spent $56.0 billion on its military in 2021, or 1.3 percent of its GDP. Military spending was 1.4 percent lower compared with 2020 due to inflation.

In 2021 Qatar’s military spending was $11.6 billion, making it the fifth largest spender in the Middle East. Qatar’s military spending in 2021 was 434 percent higher than in 2010, when the country last released spending data before 2021.