NATO Pledge Sparks Global Military Spending Surge
The NATO summit of June 2025 marked shift in global defence policy. Member countries agreed to raise military spending to 5% of GDP by 2035. This is more than double the previous 2% target. The decision reflects rising global tensions and conflicts, including new wars in South Asia and the Middle East. GKToday outlines the historical trends, key players, and broader implications of increasing military expenditures worldwide.
Historical Trends in Military Spending
Global military spending peaked during the Cold War, reaching 6.1% of world GDP in 1960. The end of the Cold War saw a decline, with spending dropping to 2.1% in 1998. Since 2015, a slow rise began, reaching 2.5% in 2024. The year 2024 saw a 9.4% increase in spending, the largest since 1988, driven by conflicts like Russia-Ukraine and Israel-Gaza. Recently, new conflicts between India-Pakistan and Israel-Iran further escalated defence budgets.
Top Military Spenders
The United States leads global military expenditure with $997 billion, followed by China ($314 billion), Russia ($149 billion), Germany ($88.5 billion), and India ($86.1 billion). Together, the top 15 spenders account for nearly 80% of all military spending. NATO members combined spent $1.5 trillion in 2024, about 55% of global spending. In GDP terms, Saudi Arabia (7.3%), Poland (4.2%), and the US (3.4%) are among the highest. Most other top spenders allocate between 1.3% and 2.6%.
Impact on Public Goods and Development
Rising military budgets threaten funding for health, education, and welfare. Studies show increased defence spending crowds out government health expenditure, especially in low- and middle-income countries. Spain rejected the new NATO target, citing welfare budget cuts. The UN’s budget is minuscule compared to military spending—$44 billion versus $2.7 trillion globally. Funding shortfalls have forced the UN to reduce its budget amid growing humanitarian needs.
Military Spending and Sustainable Development Goals
Higher defence budgets hamper progress on poverty reduction, health coverage, and climate action. Ending extreme poverty requires $70 billion annually, a fraction of global military spending. Lack of health services affects 4.5 billion people worldwide. Military activities also increase greenhouse gas emissions. NATO’s proposed spending rise could add 200 million tonnes of emissions yearly, worsening climate crises amid record heatwaves.
India’s Defence and Social Spending
India spends 2.3% of GDP on defence, with recent emergency allocations of ₹50,000 crore for weapon replenishment. Public health expenditure remains low at 1.84% of GDP, below national targets and much less than developed countries. Increased militarisation risks diverting resources from critical social sectors. Regional conflicts and public support for military strength may deepen this imbalance.
Geopolitical and Economic Implications
NATO’s spending hike aims to counter perceived threats from Russia, whose economy is much smaller. This imbalance fuels fear-driven militarisation. Countries like Lebanon and Ukraine have spent over a quarter of their GDP on military efforts, illustrating the economic strain of conflict. The global surge in defence budgets signals a shift towards remilitarisation with wide-ranging human and economic costs.
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