Finance minister Arun Jaitley announced a modest 7.9% increase in defence spending in the Budget on Saturday, suggesting the government will move gradually to fulfil the military's long wish list of fighter jets, ships and artillery.
After years of neglect, India is trying to narrow the military gap with China, which has been building up its fleet of ships and submarines, making forays in the Indian Ocean.
Jaitley said defence spending will rise to Rs 2.47 lakh crore,a jump of 7.7% from last year’s allocation of Rs 2.29 lakh crore. "Defence of every inch of our land is above everything else," he said.
But the limited rise in the military budget - three-quarters of which is spent on maintaining the world's third-largest standing force - means only some new weapons will be ordered this year.
Gurmeet Kanwal, a retired brigadier and fellow at the Vivekananda International Foundation, said the state has to make initial down payments for a range of pending orders -- including 126 fighter aircraft from Dassault, 197 light helicopters, 145 Ultra-light Howitzers, 15 Apache attack helicopters and 22 CH-47F Chinook medium lift helicopters.
The navy needs new submarines and stealth ships to counter the Chinese presence in the Indian Ocean, which New Delhi has long seen as its sphere of influence.
China is expected to authorise robust 2015 defence spending this coming week despite its slowing economy, largely to beef up the navy with anti-submarine ships and develop more aircraft carriers beyond the sole vessel in operation.
Last year, the two giant neighbours were locked in a stand-off on their disputed Himalayan border that cast a shadow on President Xi Jinping's first summit meeting with Prime Minister Narendra Modi.
But economic ties have rapidly expanded between the two countries and Modi is expected to visit China later in 2015.