Defense spending increases as Indo-Pacific tensions rise

FORUM Staff

Defense spending in Asia and Oceania rose 8.1% in 2025 to $681 billion, the highest annual leap since 2009 and an increase that surpassed the global average of 2.9%, according to a think tank’s new report.

Worldwide, defense spending reached $2.89 trillion in 2025, the 11th straight year of growth, the Stockholm International Peace Research Institute (SIPRI) revealed in its study, released in April 2026. “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, a SIPRI researcher. “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.”

Indo-Pacific Allies and Partners are among the nations fueling spending growth as they bolster collective deterrence and interoperability. India’s defense allocations rose 8.9% in 2025 to $92.1 billion, Japan’s increased 9.7% to $62.2 billion and Taiwan’s rose 14% to $18.2 billion, the study said. New Delhi is stockpiling armaments while increasing domestic production of ships, fighter jets and other assets. Tokyo is amid a five-year defense buildup that includes acquiring long-range cruise missiles for counterstrike operations. And Taipei is enhancing its land, sea, air and cyber defenses as China’s People’s Liberation Army stages military exercises around the self-governed island, which Beijing claims as its territory and threatens to annex.

Australia announced an ambitious defense strategy in April 2026 that calls for raising annual spending to $69.1 billion by 2033, with the largest expenditure being the planned manufacture of eight conventionally armed, nuclear-powered submarines through the AUKUS partnership with the United Kingdom and the U.S.

The U.S. continues to have the world’s leading defense budget, with $954 billion allocated in 2025, the study found. Even while overall spending decreased 7.5% from the previous year, the U.S. increased investments in conventional and nuclear capabilities to maintain deterrence in the Indo-Pacific and globally. The nation’s defense spending will top $1 trillion in fiscal year (FY) 2026, according to the U.S. Department of War, with $1.45 trillion requested for FY 2027.

The U.S., China and Russia, the top three military spenders, accounted for a combined $1.48 trillion in defense spending in 2025, slightly more than half of the global total, SIPRI reported. Europe had the greatest increase in defense spending, a 14% rise to $864 billion.