By: P K Vasudeva
The Indian defence budget stood at $11.8 billion in 2001. On February 17, 2014, the then Finance Minister P Chidambaram announced a 10 per cent increase in India's defence budget, taking it to $36.3 billion. In March 2014 China announced a 12.2 per cent increase in its defence budget, raising military spending to $132 billion.
India announced plans to boost defence spending in 2014-15 by 12 per cent over the previous year, and further opened the domestic weapons industry to foreign investment. The Modi government had long called for a militarily strong India to counter potential threats from both its neighbours – China and Pakistan. In July 2014 the new Indian military budget was set at Rs 2.29 trillion ($38.35 billion) for 2014-15, and the foreign investment limit in the domestic defence industry was raised from 26 per cent to 49 per cent.