India has climbed to become the world’s fifth-largest military spender, with its defence expenditure reaching $92.1 billion in 2025. The increase marks an 8.9 per cent rise from the previous year and reflects a broader global trend of rising military budgets.

The latest data comes from the Stockholm International Peace Research Institute, which released its annual report on global military spending. The report highlights a continued escalation in defence investments across nations, driven by geopolitical tensions and regional conflicts.

Regional Tensions Push Spending Higher

A key factor behind the increase in South Asia was a short but intense conflict between India and Pakistan in May 2025. The clash involved the use of combat aircraft, drones, and missile systems, prompting both countries to reassess and strengthen their military capabilities.

India’s higher spending was mirrored by Pakistan, which raised its defence budget by 11 per cent to $11.9 billion. According to the report, Pakistan’s increase was linked to new procurement orders for aircraft and missiles from China, along with payments related to earlier defence contracts nearing completion.

Global Military Spending Hits Record Levels

Worldwide military expenditure reached an all-time high of $2.89 trillion in 2025, marking the 11th consecutive year of growth. The report shows that defence spending rose by 2.9 per cent compared to the previous year, underlining a sustained global focus on military preparedness.

The five largest spenders in 2025 were the United States, China, Russia, Germany, and India. Together, these countries accounted for 58 per cent of total global military expenditure, amounting to $1,686 billion.

The global military burden also increased, with defence spending accounting for 2.5 per cent of global GDP, the highest level since 2009. On average, governments allocated 6.9 per cent of their national budgets to the military, which translates to approximately $352 per person worldwide.

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Shifting Patterns in the United States and Europe

In contrast to the global upward trend, the United States recorded a 7.5 per cent decline in military spending, bringing its total to $954 billion in 2025. This reduction was largely due to the absence of new financial aid packages for Ukraine, following $127 billion in support approved over the previous three years.

However, the dip may not signal a long-term shift. Early indications suggest that approved funding for 2026 could push US defence spending beyond $1 trillion again.

Europe, on the other hand, witnessed a sharp increase. Military expenditure across the region rose by 14 per cent to $864 billion, driven largely by the ongoing war in Ukraine and accelerated rearmament among NATO member states. This marks the fastest growth in Central and Western Europe since the Cold War era.

Asia Continues Defence Modernisation

Across Asia and Oceania, military spending rose by 8.1 per cent to $681 billion. China, the world’s second-largest military spender, increased its defence budget by 7.4 per cent to $336 billion. This marks the 31st consecutive year of growth in Chinese military expenditure.

The report notes that China’s ongoing efforts to modernise its armed forces have continued despite internal campaigns aimed at curbing corruption in military procurement.

Mixed Trends Across West Asia

Spending patterns in West Asia showed a more varied picture. Israel’s military expenditure declined by 4.9 per cent to $48.3 billion as the war in Gaza began to wind down. Iran also reported a decrease in spending for the second consecutive year, with its defence budget falling to $7.4 billion.

These declines highlight how shifts in active conflict zones can directly influence national defence budgets.

Outlook Points to Continued Growth

The broader trajectory suggests that global military spending is likely to keep rising. Ongoing geopolitical tensions, regional conflicts, and long-term defence strategies are expected to sustain the upward momentum in the coming years.

With multiple regions investing heavily in military capabilities, the global defence landscape continues to evolve, reflecting an era marked by heightened uncertainty and strategic competition.

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