So PRC's military budge is 2.5x that of India, but its actual GDP is 6x that of India.
By that measure, China is still not spending proportionally.
That being said, India is paying a huge premium in terms of Graft and foreign equipment. Plus, from an institutional standpoint, Indian military is more of a welfare program, as some 60% of its expenditure goes into salaries and HR. An optimized budget should see something like 30-40% in HR, 15-25% in R&D, and rest in O&M of current fielding.
Maintaining a large land army is a huge disadvantage these days. A large infantry formation can also be characterized as shrapnel fodder.
Ideally, India should dispense with its protectionist trade policies and develop deeper economic ties with Pakistan, alleviating some stress points and creating a win-win.
In regards to China, JAP, ROK, Vietnam are Chinese adversaries on paper. They make a lot of noise, but if you peel back the veneer, you will see that they are hugely dependent on China both from a supply chain and market perspective. Mostly, they are bitchy to China to get some support from US and then using that as bargaining chips with China. This is the game small and weak nations play, and always will play. It is survival.
Even Taiwan talks a lot of shit, but relies on China for like 40% of its GDP.
It's all a show.
China is spending normally whereas India is spending excessively.
You need to remember that while Chinese military expenditure as a percentage of GDP has remained relatively static over the last few decades, the speed at which the Chinese economy has grown has mean the military has been enjoying near double digit percentage growth in absolutely monetary terms over that same period.
You also need to consider the fact that procurement, especially military procurement which is overwhelmingly big ticket capital equipment equivalent items like tanks, planes and ships, takes a long time to build, and your surge capacity is limited.
Doubling your military budget will not yield double the number of tanks, planes and ships you can make. That is because in order to boost output by more than the surge capacity of existing factories, you need to build additional, new factories and/or expanding existing ones. Those takes years to complete, and once they came online, you will effectively also be locked into a higher minimum annual production volume to keep them operating smoothly.
The only exception to that rule might be in the naval arena, and is really more a consequence of the depressed global civilian shipbuilding market leaving massive over-capacity. Which is something the PLAN has taken full advantage of.
Interestingly, China had also been making significant investment in additional production capabilities in key areas like aircraft production and nuclear sub production.
With Chinese GDP growth rates slowing, and once those new expanded production facilities come online, we may well see an actual increase of the military budget as a percentage of GDP, but such a rise will be very modest, and may even be masked by reporting rounding.
I think a lot will ride on how the new Biden administration behaves towards China. If he pursues a reset in relations, Beijing may well disguise or mask an increase in military spending as a percentage of GDP to not trigger the Americans. But if Biden continues Trump’s confrontational approach, China may well make a point of raising its military spending percentage to send a message/warning.
But back on topic, a key and fundamentally important difference between Chinese and Indian defence spending is that Chinese military spending is overwhelmingly domestic, whereas a huge percentage of the Indian defence budget is spent on foreign arms.
When military spending is domestic, it actually contributes to growth much like any other form of large scale government consumption based spending, which usually yields a multiplier effect. Money spent on imported foreign arms flows directly out of your economy and generals zero economic benefit.
As such, so long as it is not wastefully excessive (which it isn’t by a long shot), Chinese defence spending actually should be an overall contributor and accelerator to Chinese economic growth; whereas Indian defence spending may well be acting as a brake on the Indian economy if the net multiplier gains from the domestic portion of its defence spending is not large enough to offset the direct economic outflows from foreign arms purchases.