NATO’s Defence Spending Restructuring

GS2 – International Relations

Context:

At the 2025 NATO Summit, member nations agreed to increase defence spending to 5% of GDP by 2035, citing rising security threats from Russia and pressure from the U.S.

Key Drivers of Change:

• Russia’s aggression post-2022 Ukraine invasion.
• Persistent terrorism threats in unstable global regions.
• U.S. President Donald Trump urged NATO allies to bear more of the financial burden, hinting at a reduced American military presence if they fail.

Major Developments:

• Continued military and financial support to Ukraine.
• Emphasis on diplomatic efforts alongside defence upgrades.
• Growing push for European defence autonomy amid U.S. strategic pivots to the Indo-Pacific and Middle East.

Challenges:

• Budgetary pressures in countries like Spain, Belgium, and Slovakia.
• Uneven threat perceptions, with countries like Hungary skeptical about Russia’s intentions.
• Socio-economic trade-offs, with defence spending impacting welfare budgets.

Implications for India:

• Security Architecture Realignment: Indicates a shift towards self-reliance within alliances; India should observe NATO’s strategic recalibration.
• Strategic Engagement: The Indo-Pacific militarisation offers India new scopes for partnerships through blocs like QUAD and AUKUS.
• Defence Industry Prospects: Rising NATO defence budgets can create opportunities for Indian defence exports and joint ventures.