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Global military expenditure climbed to $2.89 trillion in 2025, almost 3%, marking an 11th straight year of growth, as strategic uncertainty and shifting US security priorities pushed countries across Europe and the Asia-Pacific to accelerate defence spending, according to the latest report by the Stockholm International Peace Research Institute (SIPRI) released on Monday.
‘Global military spending rose again in 2025 as states responded to another year of wars, uncertainty and geopolitical upheaval with large-scale armament drives,’ said Xiao Liang, Researcher with SIPRI’s Military Expenditure and Arms Production Programme. ‘Given the range of current crises, as well as many states’ long-term military spending targets, this growth will probably continue through 2026 and beyond.’
The annual “Trends in World Military Expenditure” report flags what analysts describe as a “Trump factor”, growing doubts among US allies over Washington’s long-term commitments, as a key driver behind the sharpest spending increases in over a decade in several regions.
India’s spending rises, gap with Pakistan widens
India retained its position among the world’s top five military spenders in 2025, with expenditure rising 8.9% to $92.1 billion.
In South Asia, the gap with Pakistan widened significantly.
Pakistan’s military spending rose 11% to $11.9 billion, leaving India ahead by roughly $80 billion.
The last report, released in March 2025, underscored that India’s defence posture continues to be shaped by its “strategic competition with China and persistent tensions with Pakistan,” both of which have led to periodic military flare-ups.
Import dependence shows marginal decline
Separate SIPRI data on arms transfers shows India remained the world’s second-largest arms importer between 2021 and 2025, accounting for 8.3% of global imports.
However, there are early signs of a shift.
India was the world’s second-largest arms importer. Its imports decreased marginally (–4.0 per cent) between 2016–20 and 2021–25,” the report noted.
The modest decline reflects the gradual impact of domestic manufacturing efforts, though India continues to rely heavily on foreign suppliers for high-end military platforms.
Also Read: India Second-Largest Arms Importer Globally Despite Slight Decline: SIPRI
Global trends: slower growth, but record highs
While total spending hit a record, the 2.9% increase in 2025 was slower than the 9.7% surge recorded in 2024, largely due to reduced US outlays.
The United States remained the largest spender at $954 billion, followed by China at $336 billion and Russia at $190 billion. Together, the top three accounted for over half of global military expenditure.
SIPRI attributed the 7.5% drop in US spending to the absence of fresh military aid packages for Ukraine.
“In 2025, the US continued to prioritise investment in its nuclear modernisation and advanced conventional weapon programmes… to deter China,” the report said.
Outside the US, however, spending grew robustly by 9.2%, indicating a broader redistribution of military investment.
Asia-Pacific sees fastest rise in 16 years
Military spending in Asia and Oceania rose 8.1% to $681 billion, the fastest annual increase since 2009.
China continued its steady expansion, increasing its budget by 7.4%, marking 31 consecutive years of growth.
“China’s spending supports the [People’s Liberation Army’s] goal of completing a comprehensive modernisation… by 2035,” SIPRI noted.
Regional players are accelerating as well:
- Japan: Up 9.7% to $62.2 billion, its highest GDP share (1.4%) since 1958
- Taiwan: Up 14% to $18.2 billion, the sharpest rise in decades
SIPRI linked these increases to “perceived security concerns related to China and North Korea” and heightened Chinese military activity around Taiwan.
Europe re-arms at historic pace
The most dramatic surge came from European NATO members.
“In 2025, military spending by European NATO members rose faster than at any time since 1953,” said Jade Guiberteau Ricard, a SIPRI researcher. The spike reflects both the push for greater European self-reliance and pressure from the US to increase burden-sharing.
Recent data shows significant increases in various countries, with Belgium leading at a remarkable +59%, followed closely by Spain at +50% and Norway at +49%. Denmark also saw a substantial rise of +46%, while Germany experienced a 24% increase. Both Poland and Canada recorded solid growth of +23%, reflecting a trend of growth across these nations.
Germany emerged as the fourth-largest military spender globally, with an outlay of $114 billion.
Middle East trends remain mixed
In the Middle East, Saudi Arabia remained the largest spender at $83.2 billion, up 1.4%.
Israel followed with $48.3 billion, a 4.9% decline, which SIPRI attributed to reduced operational intensity after a ceasefire in Gaza in early 2025.
Spending by Iran declined for the second consecutive year, falling by 5.6 per cent to $7.4 billion in 2025. The real-terms decrease was due to high annual inflation of 42 per cent, and spending increased in nominal terms.
‘Despite the recent conflicts, Iran’s military spending decreased in real terms due to economic difficulties,’ said Zubaida Karim, Researcher with the SIPRI Military Expenditure and Arms Production Programme. ‘However, official figures almost certainly understate the true level of Iran’s spending—Iran also uses off-budget oil revenues to finance its military, including the production of missiles and drones.’
With global military spending now approaching 3% of world GDP, the highest level since 2009, the SIPRI report signals a structural shift in defence priorities, driven less by immediate conflict and more by long-term strategic uncertainty and great-power competition.
Team BharatShakti
