×

India's Military Spending

The recent Scorpene Submarine leak brought into focus not only the increasing vulnerability of sensitive defense data to leaks but also the fact that military hardware is very pricey. The Scorpene deal amounted to $3 Billion for 6 submarines ($500 million per boat) and India strikes such deals regularly. This got us thinking, just how much does India spend on the military? How does this compare with other countries and with other major spending categories such as education and healthcare?

As you can see in the chart, India spent north of $50 Billion in 2015 on the military. This is approximately 2.4% of India's GDP. In absolute terms, military spending has more than doubled over the last 10 years. However, if you look at spending as a % of GDP, it has stayed remarkably constant compared to 10 years ago. In fact it spiked in 2009 and has slightly declined since. How does this compare to military spending around the world? In absolute terms, India has the 6th highest military budget in the world behind the US, China, Saudi Arabia, Russia, and the UK. At $215 Billion in 2015, China spends more than 4 times as much as India. As a % of GDP, India's 2.4% is slightly above the world average of 2.3%. No major nation comes even close to Saudi Arabia's 13.5% of GDP spent on military!

While military spending is 2.4% of GDP, public healthcare spending was a mere 1.4% of GDP in 2014 and public education spending was 14.1% of GDP in 2012. Spending in both these sectors is trending higher. This is a good sign. The Narendra Modi led BJP government has been in power a little over 2 years now and has put together only one national budget thus far. It will be interesting to see if this seemingly hawkish government maintains the status quo or dramatically increases military spending in the near future.