India's military modernisation is shifting decisively toward long-range strike capabilities designed to reach targets deep inside China, even as defence planners continue to factor in threats from Pakistan, according to an assessment by the Stockholm International Peace Research Institute (SIPRI) cited by Nikkei Asia. The analysis, published in June 2025, underscores a structural reorientation of Indian strategic doctrine driven by China's military rise and its deepening defence ties with Islamabad.

India's Military Spending and Nuclear Arsenal

According to the SIPRI assessment, India's military expenditure rose 7.5% to $92 billion in 2025, placing it among the world's fifth-largest military spenders. The institute also estimated that India possessed approximately 190 nuclear warheads as of January 2026 — a figure that reflects steady, if measured, expansion of its nuclear deterrent.

Shift Toward Longer-Range Missile Systems

India's arsenal has evolved considerably in reach. Where earlier nuclear-capable systems were limited to ranges of up to 2,000 km, India has progressively inducted missiles capable of striking targets at 3,000 km and beyond. The report noted that India possessed 24 Agni-V nuclear-capable intercontinental ballistic missiles as of January 2026, with the Agni-V carrying a claimed range of up to 5,000 km — sufficient to cover virtually all of China's strategic depth.

This is not an incremental upgrade; it represents a qualitative shift in deterrence posture, moving India from a primarily sub-continental deterrent to one with genuine inter-theatre reach.

The China-Pakistan Axis as a Strategic Driver

The Nikkei Asia analysis highlighted that India's modernisation calculus is increasingly shaped by the China-Pakistan strategic partnership. Beijing's growing military footprint — from the Line of Actual Control (LAC) to its naval presence in the Indian Ocean — has compelled Indian planners to recalibrate. This comes amid heightened regional tensions and a post-Galwan security environment that has made the China threat more operationally immediate than at any point in recent decades.

Notably, the report also flagged the expanding roles of drones, cyber operations, and precision-strike weapons in shaping modern warfare — domains where India is accelerating investment, partly informed by lessons from recent regional conflicts.

Domestic Defence Production Surges

India's push toward indigenous manufacturing has yielded measurable results. Domestic defence production climbed from ₹46,400 crore in FY2015 to ₹1.78 lakh crore in FY2025, according to the report. Defence exports reached a record ₹38,400 crore in the same period, reflecting both policy intent and industrial capacity that did not exist a decade ago.

India is also reportedly pursuing technology-transfer-based defence partnerships to accelerate capability development in advanced drones and long-range weapons — areas where self-reliance remains a work in progress. With regional security dynamics continuing to shift, India's defence modernisation trajectory shows little sign of slowing.