India is now officially a part of world’s top-five defence spenders. It has even crossed Russia and Saudi Arabia and now sits at fourth position, increasing it’s 2016-17 defence budget by 13.1%.

It spent $50.6 billion in 2016, moving up from $46.6 billion of 2015, on defence activities. The data was released by research firm IHS Markit, Jane’s Defence Budget Report, on 12 December 2016.

“Growth in the Indian budget is expected to outpace that of all other major defence spenders over the next five years. This position is only likely to strengthen further,” said Craig Caffrey, principal analyst at IHS.

US, China and UK remain top three, Russia who was fourth last year has slipped down to sixth spot. The report says that by 2018, India will become one of the top-three defence spenders.

“Procurement spending has been constrained in India over the last three years as personnel costs have increased,” Craig Caffrey said in a statement. “However, what we expect to see from 2017 onwards is a military focused on modernisation. India needs new equipment to fulfill its modernisation drive. Over the next three years, India will re-emerge as a key growth market for defence suppliers.”

Ever since Indian Prime Minister Narendra Modi, has come into power, he has laid tremendous stress on surging the country’s defence systems. In 2014, Indian government had purchased $5.57 billion (Rs. 36,900 crore) worth of arms, ammunition and other materials.

Earlier this year, Modi government signed a €7.8 billion (almost Rs. 58,000 crore) deal with France to buy 36 Rafale fighter jets.

With the ‘Make in India’ campaign, Modi government has been looking to increase the share of domestic manufacturing of defence goods. Currently, India spends around 1.8% of it’s GDP on defence and allied activities.

Foreign Direct Investment in defence sector was also increased to 49%. India needs to spend around $130 billion in order to modernise the military systems over the span of next seven years.