Lower allocations has meant a widening gap between India and China in terms of the absolute amount being spent on meeting military objectives, especially over the past decade or so. China spends over 3.6 times the amount India spends every year now (chart 2). This has translated into a better-equipped air force (chart 3) as well as rising naval capabilities (chart 4). India has more people if one includes reserve personnel (3.5 million vs 2.7 million), though China has more in active service. But there is a significant difference in terms of land equipment and weaponry (chart 5).
There have been calls for an economic response. Boycotting Chinese goods has been suggested as a disincentive against military adventurism. However, data shows that India accounts for only around 3 per cent of China’s total exports (chart 6). China is a bigger part of India’s export basket, which means a reciprocal action is likely to affect India's exports more than it would affect China's (chart 7). The trade deficit that India has with China reduced from its recent high of over $63 billion. In absolute terms, it is at the same level as in 2014-15 (chart 8).
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