India must build deterrence against China that makes the resource gap less decisive

Maj. Gen. (Dr) Rambir Mann (retd)

A useful way to understand India’s China problem is to begin not with a border incident, a map, or a weapons system, but with scale. SIPRI estimates China’s military expenditure in 2025 at about USD 336 billion, marking its 31st consecutive annual increase. India, by the same estimate, spent about USD 92.1 billion. The difference is not merely large; it compounds. If both countries were to increase military expenditure by the same seven per cent in a year, China would add about USD 23.5 billion in new spending. That single increment would be roughly a quarter of India’s entire annual military expenditure and more than India’s annual capital outlay for modernisation and procurement.

This arithmetic is offered to understand the logic of the argument. India is not going to close the aggregate resource gap with China by attempting to mirror Chinese scale across every domain and it should not try. The more relevant strategic question is whether India can make that gap less decisive in the specific theatres and technologies where its security will be tested. A weaker power can still deter a stronger one if it can impose costs, complicate planning, deny easy success and exploit vulnerabilities that the stronger power cannot easily remove.

The concern for India is not only that China is spending more. It is that China’s growing lead in artificial intelligence, autonomous systems, shipbuilding, space, semiconductors, industrial capacity and defence production may begin to shape Indian choices before it is ever used in war. A technological gap, once absorbed into the assumptions of political and military institutions, can quietly narrow the range of options that decision-makers believe are available to them. That is a form of pressure and coercion that operates without a formal threat, through perception rather than ultimatum. Guarding against it is therefore not just a military task—it is a political and institutional one.

China Is Not Merely Modernising Its Military

Much of the Indian discussion on Chinese military modernisation still treats it as a larger, faster and better-funded version of India’s own indigenisation effort. That is an inadequate frame. Prof. Tai Ming Cheung’s work at the University of California’s Institute on Global Conflict and Cooperation offers a more useful way of understanding the shift underway in China. He distinguishes the earlier emphasis on military-civil fusion from the broader idea now described as Integrated National Strategic Systems and Capabilities, or National Strategic Integration. The objective is not simply to pull civilian technology into defence production. It is to align critical parts of the economy, science and technology system, security apparatus, industry and military power into a coordinated national structure.

This matters because it suggests that China is not simply buying more equipment. It is preparing the state, the party and the economy for long-duration strategic competition, including the possibility of crisis or war. Xi Jinping’s repeated call for ‘extreme thinking’ asks the system to prepare for worst-case conditions rather than rely on the stabilising effects of trade and globalisation. Cheung’s May 2025 IGCC brief also points to the growing presence of officials with defence-industrial backgrounds in China’s political system. He notes that roughly 20 percent of China’s provincial-level administrations are led by officials from defence-industry backgrounds. A separate CSBA study, looking at the Politburo after the 20th Party Congress, identified four of its 24 members as belonging to what it called the defence-industry faction, about 17 percent of the body.

The precise numbers will change as personnel change, but the trend is more important than the percentage. China’s defence-industrial constituency has moved closer to the centre of power. Its mobilisation planning, strategic reserves, supply-chain security, civil-military coordination and industrial resilience are not secondary matters. They are increasingly part of how China understands national power. India must therefore avoid the comforting assumption that China is only outspending it. China is also organising better for the kind of sustained confrontation in which scale, resilience and speed of adaptation matter as much as platforms.