Introduction
A significant increase in India’s defense spending has been observed since 2020. Previously, this continuous rise in the defense budget was attributed to military modernization and to India’s emergence as the largest military power in the region. Despite India’s numerical and technological advancement in the military capabilities, Pakistan posed a strong deterrence against the former in the 4-day conflict in May 2025. This crisis exposed significant vulnerabilities within the Indian military -rhetorically considered the fourth most powerful in the world.[1] It raised a question on the conventional superiority of Indian forces, as Pakistan, despite being a much smaller military, was able to inflict considerable damage on the Indian military forces. This situation erected a credibility dilemma for the Indian military and compelled its policymakers to decide a significant increase in the country’s defense spending. Defense budget for the Fiscal Year 2026-27 indicates a 15.19% rise -one of the largest annual proportions in recent years.[2]
This significant rise in the budget is not only for military modernization or to counter the dual threat of China and Pakistan. Rather, it is a strategic move to restore deterrence credibility, dominance, and political legitimacy compromised during the May 2025 confrontation. This issue brief discusses the strategic logic behind this rise in India’s defense budget and its potential implications for Pakistan.
