Introduction
Reference article titled 'India's Defence Spending : Time For a Very Serious Re-think' by Lt Gen Raj Shukla, published by Chanakya Forum on Jan 16, 2025.
This topic has been a subject of an immensely popular debate since long. During various discussions, I have come across a few interesting comments, which would be discussed later in detail. However to begin with, we need to accept the historical realities in their correct perspective; simply painting China as the villain does not serve the purpose.
To keep harping upon increasing the defence budget is the typical fauzi way of thinking, without considering the other pressing requirements of the nation, since that is not their concern. But a Prime Minister is obliged to take a holistic view, hence finding ways and means to reduce the defence budget to the extent possible, through diplomacy, calls for a strategic vision. Proportion and prosperity are among the best secrets of domestic wisdom, and there is no surer test of strategic vision and wisdom, than arriving at a well proportioned national budget.
Justification for Increased Defence Budget
The points in support of increasing the defence budget, that have come up during various discussions are :
● Chanakya had recommended one sixth of the kingdom's revenue to be spent on defence, hence India needs to increase its defence budget to 16.66% of the GDP. What it implies is that all the governments since independence have ignored the teachings of Chanakya.
● Tibet was not under the suzenerity of China in 1913-14, so the McMahon Line should have been recognized by China. What it implies is, that China is the culprit.
● After the 1962 war, the unilateral withdrawal of China was due to unsustainability of supporting its troops during winters as passes would be blocked by snow, and not as a goodwill gesture towards India. This implies, that China cannot be trusted.
All these statements are historically incorrect, hence misleading, and to base one's arguments on such statements cannot lead us to any meaningful solution. It simply takes us at a tangent.
However, Lt Gen Raj Shukla's argument is that the net Chinese expenditure on defence is much more than that of India. While he has a point, let's not forget that China has much larger borders and coastline to defend. Areawise, China is thrice the size of India. And yet, while the defence budget of China is higher in absolute terms, the percentage of GDP allotment for the same is relatively much lower as compared to India.
Comparative Share of GDPs And Defence Spendings
The share of the world GDP among the following nations is as given below :
● USA : 25.32%.
● China : 17.86%.
● Japan : 4.21%.
● Germany : 4.05%.
● India : 3.37%.
In 2023, the percentage of defence spending of the following countries was as follows :
● Russia : 6.3% of GDP.
● United States : 3.4% of GDP.
● India : 2.4% of GDP.
● China : 1.8% of GDP
GDP is a key indicator to gauge the economic health of a nation, while per capita income is an indicator of the standard of living and economic development of a nation. India's per capita income today is $ 2,697 (IMF 2024), (ie Rs 2,33,425/-), whereas the IMF benchmark for a high income country is $23,380, (ie Rs 20,23,539/-). This figure is 15.16 times more than our present per capita income. This is the state of our financial health, when tackling poverty and unemployment has to be on our 'top priority' list. Defence, undoubtedly is equally important, but the budget allotment for the same has to be based on India's GDP, not that of China. Though China's share of world GDP percentage is 7.5 times more than that of India, yet its defence expenditure is 1.33 times lower than that of India in terms of the percentage of GDP. That is a real visionary idea.
Moreover, it would be seen that China is giving more importance to development than to an increased defence budget in proportion to its GDP, inspite of it being in direct competition with the USA and having global ambitions, whereas India's security challenges and ambitions are regional in nature. But when we compare our development with China, we the fauzis, are the first ones to condemn the government. Is that fair? We cannot neglect the aspects which we have never had a chance to deal with. As responsible citizens, we are expected to display a wider vision.
Chanakya on Defence Spending
I have read Chanakya in great detail, including 'Arth Shashtra'. In fact I had given a Division level presentation on 'Kautilya' in 1988, and I say so with a high sense of responsibility, that nowhere, repeat nowhere, did he ever mention specific percentage for defence spending in numerical terms, though he strongly advocated prioritizing defence to maintain internal and external security. Moreover, the requirements keep changing from time to time. We can't apply the template of pre-Christ or Mughal era, or even British era, when expansion of the empires used to be a top priority then.
Those were the days when Alexander could invade and Mughals and the British could loot India, hence their defence budgets used to fluctuate in the range of 25 to 50%. That was the requirement of those eras, but that's not required today, since the power dynamics have changed phenomenally, and even small countries like Bhutan, Ceylon, Japan, Maldives and Seychelles can afford to defend themselves by spending not more than 1% of GDP. Now the defence of a nation has to be ensured through alliances and strong foreign policies, in addition to a reasonable and balanced defence budget, so that the nation continues to progress. That is where the real challenge of a visionary defence budget lies.
So what it really boils down to is, that each nation has to decide the percentage of defence budget depending upon its current aims, aspirations, objectives, priorities and affordability. But to justify one sixth of government revenue, ie 16.66% for defence expenditure is not a sensible idea, especially when we have a defensive strategy. No nation does it, nor should it ever do, and nor did Chanakya say so.
What Should be an Ideal Defence Budget
In fact ideally, the aim of the government should be to improve upon our strained relations with China since 1962, to ensure peace on our borders, thereby reducing the defence expenditure to the extent possible, so that adequate amount of funds are available for development. Diplomacy can achieve what a war cannot. Presently the efforts are on to improve our relations with China, and India is on the right track.
While distrusting and summarily condemning China is the easiest thing to indulge in, this cannot lead us to a sensible solution, though it would be cheered up many. Reduction of defence expenditure through diplomacy should be our ultimate aim, which requires a strategic vision. Getting into an arms race with China is not a wise decision, since it can retard the progress of the nation by draining us out financially, and making us more vulnerable in the long run. In fact, that is one thing that we must totally avoid. USSR had made the mistake of getting into an arms race with USA during the cold war era, and ended getting split up.
China's Suzenerity Over Tibet
When Maharaja Hari Singh signed the 'Instrument of Accession', for merging J&K with India, in October 1947, the merger was conditional, and initially India controlled only three subjects, ie defence, foreign affairs, and communications. And yet, J&K continued to remain a part of India, inspite of it having a separate Constitution, a separate Flag, and a separate Prime Minister.
Similarly, China also excercised suzenerity over Tibet, ie it controlled Tibet's foreign policy, even after the sudden collapse of Chinese power in Tibet in 1911-12. And that's precisely the reason why Britain convoked a 'Tripartite Conference' in Simla in October 1913, comprising Britain, China and Tibet, to discuss the proposal for ceding NEFA to British India, since Tibet did not enjoy independent treaty making powers.
In case China did not excercise suzenerity over Tibet, why did the British convene a 'Tripartite Conference'? In that case, where was the need to invite China at all? And why did Tibet accept China's presence during the Conference? Did India invite Pakistan to discuss the abrogation of Article 370 in 2019. In fact, the very fact of inviting China implied China's suzenerity over Tibet.
Howevever, since China did not approve the British proposal of ceding NEFA, the British played a trick to have a secret treaty signed with Tibet in Delhi in March 1914, which was not made public for the next 23 years. Tibet was lured by the assurance that the British would help getting it independence from China. Hence it was only in 1937 that the British started showing McMahon Line on its maps, and that too with its legal status as 'Boundary Undemarcated'. Interestingly, the McMahon Line has not yet been demarcated till date. If Tibet was an independent nation, what prevented India to demarcate McMahon Line on ground, during the period 1914 to 1950? Afterall, 36 years is a long period of time. Moreover, if it was a legal treaty, what prevented British India to disclose the same immediately and take possession of NEFA forthwith? How is this delay of 36 years justified?
Not only this, the 'bilateral agreement' signed in Delhi in March 1914, had to be kept secret, since it was in violation of Anglo-Chinese Convention of 1906, as well as Anglo-Russian Convention of 1907, under which Britain was prohibited to enter into negotiations directly with Tibet except through an intermediary of the Chinese government. Both Russia and British India were major military powers, who feared each other, hence the above mentioned Conventions were signed to keep a check on each other's expansionist designs.
In 1950, the newly established People’s Republic of China regained absolute control over Tibet. The 17-Point Agreement for the Peaceful Liberation of Tibet was signed in 1951, granting Tibet autonomy while reaffirming Chinese sovereignty. A Tibetan uprising in 1959 led to the flight of the 14th Dalai Lama to India. Even J&K struggled equally hard for cessation during the 1990s, but that did not imply that it ceased to be a part of India, or it had been vested with independent treaty making powers.
Chinese Efforts to Ratify Boundaries
When Chou En-lai visited Delhi in April 1960, he made a very reasonable offer. China's stand was that India accept Aksai Chin and China accept McMahon Line; no withdrawals were involved. He even said, "You keep what you hold, you take too anything in dispute and occupied by neither, and we keep what we hold." The Chinese delegation had come via Burma, where they had accepted the McMahon Line. That was the time when the borders should have been ratified peacefully. But the Indian side was adamant, since Pandit Nehru had a hidden agenda, which none of his Cabinet colleagues was aware of, and this is what ultimately led to the 1962 war.
Even the USA's secret CIA report read, "Fundamentally, China was right to assert that the boundary was undefined and called for negotiations without pre-conditions. Its terms in 1960 were reasonable." Moreover, Moscow had warned India through a letter, the danger of using arms to settle boundary dispute with China. Nikita Khruschev said, "It was a dangerous path", and the letter urged that Nehru should accept the Chinese proposal for talks. But Nehru was told by his Intelligence Bureau Chief, that China was militarily not in a position to challenge India, and Nehru strongly believed that right of possession was nine-tenth of the law. This is what prompted him to adopt Forward Policy, which led to the 1962 debacle.
In fact India had then missed a golden opportunity due to Pandit Nehru's short-sightedness. Brig John Dalvi had very rightly observed, "Nehru's short-sightedness and negligence with regard to China is remarkable, when judged against his far-sightedness in world affairs." Today, whatever boundary problems we are facing with China, are a result of Pandit Nehru's adamancy and short-sightedness with regard to China policy, and we need to correct the same, instead of blaming China and trying to defend the series of blunders created by Pandit Nehru between 1954 to1962, for which were are suffering till date.
The question now is : How long should India continue to suffer for the blunders created by Pandit Nehru? Moreover why? Isn't someone expected to correct the same? Unfortunately, we don't want to even think on those lines.
Unilateral Withdrawal of China
Attributing China's unilateral withdrawal to pre-war positions after the 1962 war, to unsustainability of supporting its troops during winters, as passes would be blocked by snow, is nothing more than an effort to project China as the loser, in spite of India having lost the war convincingly well. China is a vast country and the mountain passes of NEFA and Ladakh are not the only ones along its borders that get closed during winters. Moreover, if that was so, how has India been maintaining its troops in NEFA since 1951 and in Ladakh since 1842. If closure of passes during winters means a nation's inability to guard its borders, than China should have disintegrated long ago, and so should have India lost its high altitude territories. In this regard, the questions that need to be answered are:
● Why did China declare a unilateral ceasefire and announce a voluntary withdrawal, immediately after capturing all its claim areas?
● Why did it have to unilaterally withdraw to pre-war positions, not retaining an inch of captured territories?
● How did China manage to sustain its troops till it finally withdrew after a period of three months, since the commencement of 1962 war, when the passes were already closed with snow?
● Couldn't China have sustained itself even upto Sela Pass or Tawang area in NEFA, or even a few kilometers ahead of its pre-war positions in Ladakh?
● If China could sustain its troops in Indian territory, even during the peak winter season of war, what prevented it doing the same after winning the war, when it could have comfortably improved its axes of maintenance, without Indian interference?
The truth is, that having suffered a humiliating defeat, India came up with various excuses to justify China's withdrawal, which were ridiculous in nature:
● A speculation of Russian ultimatum.
● Fearing US intervention.
● A popular explanation that the Chinese had overstretched their lines of communication, hence were vulnerable to Indian counter attack.
● As an Indian Member of Parliament put it, the Chinese withdrawal had been 'basically inspired by fear'.
● And as Nehru put it, "The Chinese had turned their tail rather than face the unexpected anger of the people of India when aroused."
All these were nothing but face-saving political gimmicks to avoid the self-inflicted embarrassment.
Real Reasons for Chinese Withdrawal
The reason for Chinese offensive was based on India's unilateral change of established borders, whose existence was supported by a history of 120 years in Ladakh Sector and for 46 years in NEFA Sector. What needed to be done, was a simple ratification through a treaty, to convert the same into international borders to ensure a lasting peace. But India tried to alter the established borders by implementing 'Forward Policy', using force, presuming China to be militarily a weak nation. No self-respecting nation would ever tolerate it. So why blame China?
If we recall, after six days of commencement of the war, ie after the capture of Tawang, China had given a strategic pause of 20 days, from 26 Oct to 14 Nov 1962, both in NEFA and Ladakh Sectors, asking India to stop changing established borders unilaterally through use of force, and to resolve the boundary issues in a peaceful manner. But Pandit Nehru was adamant and refused to accept it, since he had made it a prestige issue. Hence China had no option but to recommence the offensive. China's aim was to ensure status quo, till the border issues were resolved in a peaceful manner, which it ensured through the 1962 war. That was precisely China's aim of war. Thereafter, India did not revive its Forward Policy; and thus did China achieve its aim.
The Chinese aim of returning to pre-war positions, after capturing their claim areas, had been formulated even before the commencement of the war. Its aim was only to teach India a lesson that unilateral change of boundaries through use of force could not be accepted by a militarily stronger neighbour. And if that was so, China was in a better position to do the same, which it proved through the 1962 war.
China's aim was based on its experience of a 1929 incident from Sino-Soviet past. After a dispute over the Chinese Eastern Railway, the Kuomintang government of China, rejecting Russian proposals for discussion, stirred up an armed conflict by attacking Russian border. Then the Soviet Union, compelled to act in self defence, invaded Manchuria, destroyed a Kuomintang Army, and withdrew to its own territory. That was perfectly the right thing to do, the Chinese said in 1962. And China did exactly the same thing with India; it was nothing new.
Chinese Intentions to Maintain Goodwill
Even after having won the war decisively, China made it a matter of principle that all Indian equipment left behind by the retreating Indian Army be handed back in as good condition as possible, ie all small arms, mortars, artillery guns, shells and ammunition, trucks, clothing, American automatic rifles captured at Sela Pass, and a Russian helicopter in serviceable condition. Indian civil parties were sent to collect it. Couldn't the Chinese have carried or destroyed all these, instead of handing over the same to India?
Moreover, China did not publicize this extraordinary transaction since it was simply a gesture to further demonstrate sincerity for a peaceful settlement. But India denounced it as a propaganda manoeuvre, thereby drawing attention to it.
Though China wanted to maintain goodwill, even after defeating India decisively, yet Pandit Nehru did not acknowledge China’s positive gesture, since his hidden agenda of altering the established borders unilaterally, through use of force, based on his manufactured claims on Chinese territory had been exposed by China.
How Nehru Manufactured Boundary Claims?
Pandit Nehru had in fact, got trapped into a web of his own making, by creating a false narrative, by unilaterally changing its borders with China on India's maps in July 1954, by removing the legal status of Johnson Line (Boundary Undefined) and of McMahon Line (Boundary Undemarcated), and marking the same as clear international borders. He also unilaterally shifted the alignment of McMahon Line from Hathungla Ridge to Thagla Ridge, thereby including 100 square kilometres of Chinese area into Indian territory. And thus did he manufacture the claim on Aksai Chin across Ladakh and Thagla Ridge across NEFA. He wanted to tell China that these were the maps handed over by Britain on 15 August 1947, but China refused to buy this cooked up story, since it too had the maps marked with authentic boundaries as on 15 August 1947. Moreover, Indian Army too had the same maps.
Pandit Nehru had planned a 'Top Secret' excercise to unilaterally change the boundaries with China in 1954, in which he had involved a young Indian Foreign Services officer, who later served as India's Ambassador to China from 1966 to 1968. His name was Mr Ram Sathe. This incident has been mentioned by AG Noorani, an expert in legal and constitutional matters, known for his study of boundary issues, in his book - 'India-China Boundary Problem 1846-1947 : History and Diplomacy'. And this 'Top Secret' input had been revealed to AG Noorani by none other than Mr Ram Sathe himself.
Noorani states that as late as 1950, the Indian maps showed Johnson Line (ie the Aksai Chin boundary), as 'undefined', McMahon Line as 'undemarcated' and Thagla Ridge in Chinese territory, but by unilaterally amending the maps and implementing Forward Policy, Pandit Nehru flouted the 1842 Chushul Treaty, as well as the McMahon Line Treaty of 1914. This book, dedicated to the memory of Mr Ram Sathe, was released on 16 Dec 2010 by Hamid Ansari, the Vice President of India. But revealing the truth 56 years after the conduct of the 'Top Secret' excercise in 1954 was rather too late, since by then, the entire nation had been so convincingly brainwashed by Pandit Nehru, that the truth now appeared repugnantly unpalatable, and a part of sponsored agenda.
"How can China be right and my country be wrong? Even if it be so, as a patriotic Indian, I shall not accept it." It is this line of thought, which prevents 99.99% Indians to accept the bitter facts of history. Unfortunately, the truth is usually bitter and sometimes stunningly shocking. This was a typical case of an unpleasant, unbearable, unbelievable and upsettingly bitter truth. By now China had been painted to be the biggest villain that ever existed on earth.
The tragedy was that Pandit Nehru found himself caught up in a whirlpool of his own making, from which it became impossible for him to get out, without the fall of his government. Nehru's decision to throw out Chinese from Thagla Ridge, which was clearly in the Chinese territory, was a plain act of political opportunism, in the face of ignorant clamour of the opposition and the uninformed public. It was nothing but a political gimmick to save his government. However, in the bargain, he ruined the reputation of the Indian Army as well as that of India.
Having instigated and provoked the Chinese to attack, by implementing Forward Policy, and having suffered a humiliating defeat in 1962, Nehru did not display the decency to resign and opt for getting himself and his government re-elected. Whereas he had displayed remarkable adroitness in handling world affairs, he had been myopic in a sphere of vital importance to India, for which India paid a heavy price in 1962, and still continues to do so. It was unworthy of a man of Nehru's stature.
Conclusion
Nehru's international stature suffered a severe setback, and India ceased to be the leader of the non-aligned countries. Moreover, never again was he to have a charismatic hold on the Indian people. More tragic was his fall from grace in the eyes of his own countrymen. His health deteriorated and he died within 18 months after India's humiliating defeat of 1962, for which he was squarely responsible. Yes, he was the one who was responsible for the avoidable loss of 3,079 soldiers killed, missing and captured. Acharya Kriplani was right when he told Pandit Nehru in the Parliament, "I charge you for the murder of these innocent Indian soldiers."
Now the answer to all these misdeeds of the past does not lie in hating and condemning China, and increasing India's defence budget to compete with it, but in reducing the same by improving our relations with China, and correcting the blunders created by Pandit Nehru during the period 1954 to 1962, which requires a strategic vision and the courage to accept the unpalatable facts of history. Let us not forget that equality of regard is fundamental to good relations between two nations.
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