India–US relations appear to have lost some momentum in recent times, with what was once a strengthening partnership now seeming relatively subdued. Current global priorities—particularly conflicts in regions like Europe and the Middle East—have shifted strategic attention elsewhere, limiting sustained high-level engagement between the two countries. While China remains a key concern for both nations, the earlier, more explicit strategy of containment appears to have evolved into a more complex, cautious, and interest-driven approach. Additionally, perceptions that the administration is attempting to claim disproportionate credit for positive developments in the relationship may have contributed to diplomatic friction and reduced mutual enthusiasm.
Conclusion: The unprecedented 15-percent increase in the MoD’s 2026-27 budget, coming soon after Operation Sindoor, appears to be a statement of India’s defence intent. However, some of the sheen in the budget is diluted due to the appearance of a new budget head (‘spectrum charges’) to pay for the telecommunications department’s past and recurring expenditures. The new budget head has not only inflated the overall budget, particularly the revenue expenditure of the defence services, but also has a calming effect on capital expenditure, which has grown at 22 percent—much lower than the 30 percent recommended by the 16th Finance Commission to enable the defence forces to achieve “multi-domain operational capability”. The budget also falls short of expectations on the defence innovation front. The modest growth in the DRDO’s allocation and its reduced share in the defence services budget, combined with the reduction of funds for the ‘Make’ projects, are not in sync with the self-reliance drive, which needs a sustained budget boost
South East and East Asian analysts remain cautious about the tangible outcomes of the third phase of India–South Korea defence cooperation, largely due to the risk of Chinese geopolitical pressure influencing supply chains and strategic decisions.
It’s worth noting that both Japan and South Korea began structured military cooperation with India only in the early 2000s. Since then, India has made meaningful progress with South Korea, particularly in defence manufacturing and co-production. However, similar outcomes have not materialised with Japan, despite strong strategic alignment.
This contrast becomes more interesting when viewed alongside trade data. India maintains robust economic relationships with both Japan and South Korea—often larger than with traditional defence partners like France or Russia or Israel. Yet, this economic depth has not translated proportionately into defence collaboration, especially in Japan’s case.
Indian businesses or institutions also doesn't seem to be keen to be making cooperative arrangements with establishments in these two nations despite now decades of mutually beneficial and profitable business and economic relationship. What's missing and what can be done?
India's naval diplomacy in action as reported by CNA
According to the Stockholm International Peace Research Institute (SIPRI), India has the world’s fifth-largest defence budget at approximately $92 billion. In comparison, China ranks second globally, with defence spending nearly three times that of India. Meanwhile, Pakistan is positioned much lower at 31st, with a defence budget roughly one-ninth the size of India’s.