The Economics of Ground Warfare: Why Winning the Next Land War Depends on What a Nation Can Afford to Lose
Modern warfare is often described through the language of technological superiority. Advanced aircraft, precision missiles, autonomous systems, artificial intelligence, satellite surveillance and network-centric command structures dominate discussions about the future battlefield. Yet the prolonged war in Ukraine has exposed a less glamorous but equally decisive reality: sophisticated weapons cannot sustain a war indefinitely if the state using them cannot afford to replace losses, replenish ammunition, repair damaged equipment, maintain manpower and keep production lines operating. The decisive question is no longer simply which army possesses the most advanced weapons. It is which country can continue generating effective combat power after months or years of attrition.
This is particularly important in land warfare. Unlike a short air campaign or a limited naval engagement, a major continental conflict can consume enormous quantities of ammunition, fuel, vehicles, engineering equipment, communications systems and trained personnel. Armies do not merely lose tanks and artillery pieces; they lose the trained crews, maintenance capacity, spare parts, logistical infrastructure and industrial resources required to restore combat effectiveness. A military force may enter a conflict with a formidable inventory and still find its operational capability progressively eroded by the economic cost of sustaining it. In such circumstances, industrial capacity becomes an extension of military power, while economic resilience becomes a strategic weapon in its own right.
The central lesson is that the economics of ground warfare is not simply about defence budgets or the price of individual weapons. It concerns the ability of a state and its partners to generate, sustain and regenerate military capability under the pressure of continuous combat. This ability rests on three interconnected foundations: national economic and industrial capacity, external support through alliances and partnerships, and the institutional capacity to convert financial resources into operational military power. The next major land war may therefore be decided not only by what a country can deploy at the beginning, but by what it can continue to produce, replace, repair and afford to lose.
The changing economics of military superiority
For much of the post-Cold War period, military modernisation was associated with increasingly sophisticated and expensive platforms. The assumption was that a technologically superior force could compensate for numerical disadvantages through precision, superior sensors, networked communications and advanced weapons. This model remains relevant, but the battlefield is now exposing its economic vulnerabilities.
A precision-guided weapon may destroy a target worth millions of dollars, but the cost of producing and replacing that weapon can be substantial. A relatively inexpensive unmanned aerial vehicle may force an adversary to expend a much more expensive interceptor, deploy electronic warfare systems or divert personnel and equipment to protect critical infrastructure. The resulting cost exchange is not always favourable to the technologically superior force. The attacker may lose a cheap system while compelling the defender to consume scarce and expensive defensive resources.
However, comparing the purchase price of two weapons does not reveal the full economic equation. The real cost of an engagement includes the platform, sensors, communications, operators, training, maintenance, ammunition, logistics, infrastructure and the opportunity cost of diverting scarce resources from other missions. A low-cost drone may require an expensive intelligence and communications network to operate effectively. A sophisticated missile may be costly, but its ability to destroy a critical command centre or air-defence installation may justify the expenditure. The relevant question is therefore not simply which weapon is cheaper, but which side can generate the required military effect at a sustainable cost.
This is the economic logic behind the growing importance of mass precision strike. The challenge is to combine precision with sufficient numbers of weapons to maintain pressure over time. Research by the Royal United Services Institute has examined how unmanned aerial systems can be organised into formations and integrated into land forces to generate mass precision effects. The implication is significant: precision is no longer necessarily the exclusive advantage of a small number of expensive platforms. It can increasingly be generated through distributed networks of relatively affordable systems.
For military planners, this creates a difficult procurement problem. A force equipped exclusively with high-end systems may possess impressive capabilities but lack the numbers required to sustain prolonged operations. A force relying entirely on inexpensive systems may lack the survivability, range, reliability and destructive power required for demanding missions. The emerging requirement is a balanced force structure in which expensive high-performance platforms operate alongside affordable systems that can be produced, deployed and replaced in substantial quantities.
The return of mass: numbers still matter
The growing importance of precision technology has not eliminated the requirement for mass in land warfare. It has changed what mass means. In earlier conflicts, mass was frequently measured through the number of soldiers, tanks, artillery pieces and aircraft concentrated in a particular theatre. Modern forces still require these capabilities, but they must now generate mass through a combination of platforms, sensors, ammunition, drones, electronic warfare systems, communications networks and distributed logistical support.
The war in Ukraine illustrates this transformation. Both sides have adapted to a battlefield increasingly dominated by persistent surveillance, small unmanned aerial systems and precision attacks. Concentrated formations can be detected and engaged, while the proliferation of drones has expanded the danger zone around frontline positions. As a result, infantry tactics have become more dispersed, with smaller teams operating from separated positions and relying on concealment, mobility and local support.
The International Institute for Strategic Studies has documented this tactical evolution. Its analysis of Ukraine's changing war effort describes the increasing use of small infantry teams and the adaptation of both Ukrainian and Russian forces to the expanding unmanned aerial systems threat. It also notes that Russia's armour losses declined in 2025 partly because Russian forces reduced their use of armoured fighting vehicles and increasingly adopted low-footprint infantry tactics. This is an important qualification to the argument that more expensive equipment automatically produces greater battlefield effectiveness. Sometimes the adaptation of tactics can reduce exposure and preserve scarce equipment.
Dispersion does not mean that mass has become irrelevant. Infantry still has to occupy ground, secure positions, clear settlements, protect supply routes and hold territory. Artillery must deliver sustained fire. Engineers must breach obstacles, construct defensive positions and maintain mobility. Armoured vehicles continue to provide protected mobility, firepower and shock effect when employed appropriately. The challenge is to combine these capabilities without presenting concentrated and vulnerable targets to an adversary equipped with persistent surveillance and precision weapons.
The Association of the United States Army, in its Lessons Encountered from Ukraine Land Warfare Paper by Dr Richard D. Hooker Jr., emphasises the continuing importance of human factors, including cohesion, resilience, leadership and morale. It argues that advanced technologies such as drones, robotics and artificial intelligence must be affordable and available at scale, while legacy systems such as tanks and artillery remain relevant when protected against drones and employed as part of combined-arms formations.
The lesson is that future land warfare will not be won by choosing between mass and technology. It will be won by combining technological sophistication with sufficient quantities of affordable equipment, trained personnel and logistical resources to sustain combat operations.
The armoured vehicle question: expensive does not mean obsolete
Few military debates have been as persistent as the question of whether the tank has become obsolete. The proliferation of anti-tank missiles, loitering munitions, first-person-view drones and precision artillery has made armoured vehicles increasingly vulnerable. Images of destroyed tanks in Ukraine have reinforced the argument that the economics of modern warfare may no longer justify large fleets of expensive armoured platforms.
That conclusion is premature. The battlefield has demonstrated the vulnerability of tanks operating without adequate reconnaissance, infantry support, electronic warfare, air defence and counter-drone protection. It has not demonstrated that protected mobility and direct firepower are unnecessary. Armoured vehicles continue to perform missions that are difficult to replicate through drones or dismounted infantry alone. They provide protection against small-arms fire and fragments, support infantry assaults, deliver direct fire against fortified positions and enable forces to manoeuvre under hostile conditions.
The economic problem is therefore not simply the acquisition cost of a tank. It is the full cost of maintaining an armoured force capable of surviving and operating in a battlefield saturated with sensors and precision weapons. A modern tank requires trained crews, recovery vehicles, repair facilities, spare parts, fuel, ammunition, communications and supporting infantry. Its operational value depends on the entire combined-arms system.
The experience of Ukraine also shows that repairability can be as important as protection. RUSI's analysis of combined-arms manoeuvre in Ukraine has highlighted Ukrainian concerns about the weight and repair difficulties of some Western armoured vehicles.
This does not mean that armies should abandon advanced armoured systems in favour of cheaper vehicles. It means that procurement must consider survivability, repairability, modularity, recovery requirements and lifecycle costs alongside firepower and protection. A vehicle that can be repaired rapidly, returned to service and supported by domestic industry may deliver greater long-term military value than a technically superior platform that depends on distant supply chains and specialised foreign maintenance.
The future of armoured warfare will therefore depend on adaptation rather than disappearance. Tanks and infantry fighting vehicles will need integrated counter-drone systems, electronic protection, improved situational awareness and tactics designed for a battlefield where detection can precede engagement by only a short interval.
Industrial endurance: the production line behind the battlefield
A military force can begin a war with a large stockpile of ammunition and still face a crisis if the conflict continues longer than anticipated. Artillery shells, rockets, missiles, drone components, vehicle spares, batteries, electronic systems and engineering stores are consumed continuously. Damaged equipment must be repaired or replaced. Training establishments must produce replacement personnel. Transport networks must deliver supplies to formations operating under increasingly difficult conditions.
This creates a fundamental difference between peacetime military readiness and wartime industrial endurance. Peacetime readiness is often measured through the number of platforms held in inventory, the percentage of equipment available for operations and the level of training achieved. Wartime endurance requires something more: the ability to replenish those inventories at the rate at which they are consumed.
Ukraine offers a striking illustration. The Ukrainian state-owned defence company Ukroboronprom announced that its production value increased from approximately UAH 122 billion to more than UAH 180 billion in 2025, representing growth of around one and a half times. These are reported production values, not a direct measurement of the physical number of weapons manufactured, but they demonstrate the scale of the effort to expand domestic industrial output under wartime conditions.
The distinction between production capacity and actual wartime output is important. A factory may possess machinery and technically capable personnel, but it also requires reliable supplies of raw materials, components, energy, skilled labour, financing and predictable orders. Production lines designed for peacetime demand may not be able to increase output quickly when a war suddenly creates enormous requirements. Industrial capacity must therefore be developed before a crisis, not improvised after one begins.
This is also why the defence industrial base cannot be viewed merely as a collection of government-owned factories. It includes private manufacturers, small and medium enterprises, electronics suppliers, chemical industries, engineering companies, software developers, transport providers and research institutions. Many of the components required for modern military systems are produced outside traditional defence establishments. The resilience of the entire ecosystem matters.
The challenge extends beyond the ability to manufacture a weapon once. It includes maintaining production lines, preserving technical expertise, securing component supplies and ensuring that manufacturers remain financially viable during periods when military orders are limited. A country that allows its industrial base to disappear between conflicts may discover that it cannot rapidly regenerate the capacity required during a crisis.
How wars are paid for: the limits of economic endurance
The economics of warfare is ultimately a question of national resource allocation. A country engaged in a prolonged conflict must finance military expenditure while maintaining the essential functions of the state. Defence spending competes with healthcare, education, infrastructure, social protection, debt servicing and other public priorities. As the conflict continues, the government may have to raise taxes, borrow more heavily, divert civilian production, seek external assistance or reduce other forms of expenditure.
The financial burden of the war in Ukraine illustrates the extraordinary demands that prolonged conflict can impose. According to the Stockholm International Peace Research Institute, Ukraine's military expenditure reached an estimated US$84.1 billion in 2025, equivalent to approximately 40 per cent of its gross domestic product and 63 per cent of government spending. Russia's military expenditure was estimated at US$190 billion, or 7.5 per cent of GDP. These figures demonstrate how war can reshape the economic priorities of an entire state.
Ukraine's experience also demonstrates why national economic capacity alone cannot explain wartime endurance. External support has been central to its ability to continue fighting. International financial assistance helps sustain government functions, while weapons, ammunition, air-defence systems, intelligence and technical support contribute directly to military capability. The IISS analysis published in April 2026 describes how the reduction in US military support placed additional pressure on Ukraine, while European countries struggled to compensate fully. Ukraine remains particularly dependent on the United States for important long- and medium-range air-defence capabilities, including Patriot systems and associated missiles.
This is a crucial strategic lesson. An alliance can extend the endurance of a country whose national industrial and financial resources are insufficient to sustain a prolonged conflict independently. But alliance support also creates dependencies. Political changes in supporting countries, competing security priorities, production limitations and disagreements over the scale of assistance can affect the flow of essential military resources.
The strategic value of alliances must therefore be measured not only by the number of countries participating in them, but by the reliability of their supply networks, the compatibility of their military systems, their industrial capacity and their political willingness to sustain support during a prolonged crisis. A country may possess a capable army but remain vulnerable if critical weapons, ammunition or components depend on external suppliers whose continued support cannot be guaranteed.
For military planners, the implication is clear: economic endurance is both a national and a coalition responsibility. National production, domestic financial capacity and industrial resilience remain essential, but they must be complemented by reliable international partnerships and supply arrangements.
Affordable innovation and the new defence industrial ecosystem
The expansion of drone warfare has demonstrated that military innovation no longer belongs exclusively to large defence contractors and established state research organisations. Commercial electronics, software companies, start-ups, university laboratories and smaller engineering firms are increasingly contributing to military capability. This has created opportunities for faster innovation and lower-cost production, but it has also introduced new vulnerabilities.
A drone may be inexpensive because its components are derived from commercial technology. Its navigation system, cameras, processors, communication modules and batteries may come from civilian supply chains. This can accelerate production and reduce procurement costs, but it may also expose military capability to dependence on foreign electronics, restricted components or fragile commercial supply networks. In a prolonged conflict, the availability of these components may become as important as the availability of the airframe itself.
The challenge is to create an industrial ecosystem that can innovate rapidly while maintaining security, reliability and the capacity to scale production. Governments must develop relationships with commercial manufacturers, support research and testing, encourage modular designs and ensure that successful technologies can move from prototypes to operational quantities. Procurement systems must also become more responsive to technological change. A process that takes years to approve a relatively simple system may be incompatible with a battlefield where technologies and countermeasures evolve within months.
Affordable innovation does not mean sacrificing quality. Military equipment must operate in difficult environments, withstand electronic interference, remain reliable under combat conditions and integrate with existing command structures. A cheap system that fails when exposed to jamming, weather or operational stress is not economical. The objective is to achieve the required military effect at a sustainable cost, without creating unacceptable vulnerabilities.
For India, this is an important opportunity. A large engineering base, expanding electronics industry, software capabilities and growing private-sector participation can support the development of affordable military technologies. But the real measure of success will be the ability to manufacture reliable systems at scale, maintain them during operations and continuously improve them as battlefield requirements change.
Logistics: the economic system that keeps armies alive
Military logistics is often treated as a supporting function, but in a prolonged land war it becomes one of the principal determinants of operational success. Ammunition, fuel, food, water, medical supplies, spare parts, batteries, communications equipment and engineering stores must reach units operating under difficult and sometimes hostile conditions. Every kilometre between the industrial base and the frontline creates a logistical requirement. Every damaged vehicle or broken supply route adds pressure to the system.
The economic cost of logistics is not limited to transportation. It includes storage facilities, warehouses, roads, bridges, railways, fuel infrastructure, maintenance depots, recovery vehicles and trained personnel. A military force that can purchase advanced equipment but cannot sustain it in the field may possess impressive nominal strength without corresponding operational capability.
The problem becomes more severe in difficult terrain. Mountain warfare, for example, requires specialised clothing, high-altitude equipment, heating, oxygen support, transport, engineering infrastructure and carefully planned stockpiles. The cost of maintaining forces in remote areas can be substantial, even without active combat. During a conflict, these requirements can increase dramatically.
India faces a particularly demanding logistical environment because its land-security requirements extend across both high-altitude Himalayan terrain and the western frontier. These theatres impose different operational demands. Mountain formations require specialised transport, infrastructure and supplies, while forces operating in the plains require mobility, armoured support, artillery ammunition and the ability to move large quantities of equipment rapidly. The military logistics system must be capable of supporting both environments without allowing one requirement to undermine the other.
The PRS analysis of India's defence expenditure also records past provisioning deficiencies in high-altitude deployments, including delays in the procurement of essential clothing and equipment for troops in areas such as Siachen and Ladakh. This is a reminder that logistics failures are not always caused by a shortage of money. They can also result from procurement delays, administrative inefficiency, poor forecasting and inadequate supply-chain management.
The future battlefield will place even greater demands on logistics. Distributed formations may reduce the vulnerability of large concentrations, but they also require more dispersed supply points, resilient communications, mobile maintenance and redundant transport routes. The ability to sustain a force under these conditions will depend on the integration of military logistics with national infrastructure and industrial planning.
India's defence economy: production growth and the self-reliance test
India's defence industrial base has expanded significantly in recent years. The Ministry of Defence reported that domestic defence production reached a record ₹1.78 lakh crore in financial year 2025–26, representing a 15.6 per cent increase over the previous year. The private sector accounted for approximately 24 per cent of production, or around ₹42,000 crore, compared with 22 per cent in the preceding financial year. Defence exports reached ₹38,424 crore during the same period. These are important indicators of industrial expansion and growing participation by domestic manufacturers.
The private sector's expanding role is particularly important because modern military production increasingly depends on a broad network of specialised suppliers. Large platforms require components produced by smaller firms, while electronics, sensors, software, communications systems and precision manufacturing are areas where private industry can contribute significantly. A defence industrial base that relies entirely on a limited number of government production establishments may struggle to achieve the flexibility and scale required in a prolonged conflict.
However, production value alone is not a complete measure of strategic self-reliance. A weapon manufactured in India may still depend on imported engines, radars, electronic components, specialised materials or critical technologies. The country may assemble a platform domestically without controlling all the technologies and supply chains required to manufacture, repair or upgrade it independently.
The PRS analysis provides an important perspective. India was the world's second-largest arms importer during 2020–24. Between April 2014 and December 2024, more than 35 per cent of total defence modernisation expenditure went towards procurement from foreign sources. The same analysis notes that Indian-designed defence platforms continue to depend on imported critical components, including engines and radars.
This does not negate the progress made in domestic production. It identifies the next stage of the challenge. Genuine industrial self-reliance requires control over critical technologies, the ability to manufacture essential components, dependable access to raw materials and the capacity to repair and upgrade systems without excessive dependence on external suppliers.
India's budgetary priorities will also influence the pace of this transition. The Union Budget for 2026–27 allocated approximately ₹7.85 lakh crore to the Ministry of Defence, an increase over the previous year's revised estimate. The government announced substantial allocations for capital expenditure and domestic defence industries, while the Border Roads Organisation received ₹7,394 crore. These allocations reflect the importance attached to military modernisation, domestic production and border infrastructure.
But the composition of the defence budget deserves equal attention. PRS estimates that salaries and pensions account for approximately 44 per cent of defence expenditure in 2026–27. Capital outlay has averaged around 27 per cent of the defence budget over the past decade, compared with the 40 per cent share considered ideal by the Standing Committee on Defence in 2021. PRS also estimates that defence expenditure represents approximately 2 per cent of GDP, falling to 1.6 per cent when pension expenditure is excluded. The share of defence spending allocated to research and development is projected to decline to 3.7 per cent in 2026–27.
These figures should not be interpreted as a simple argument that India must spend more without regard to priorities. The more important question is whether the available resources are being converted into the capabilities required for future conflict. A larger budget cannot automatically compensate for inefficient procurement, delayed projects, limited research investment or excessive dependence on imported components.
The challenge is particularly visible in procurement timelines. PRS notes that defence equipment acquisition can take between 19 and 26 months, while the Comptroller and Auditor General found that deliveries were delayed beyond stipulated timelines in 72 per cent of the contracts it examined. Such delays can undermine military readiness and reduce the value of equipment purchased. In a rapidly changing technological environment, a system may also become less relevant by the time it enters service.
India therefore needs to measure defence modernisation not only through budget allocations, production values or the number of platforms inducted, but through operational availability, indigenous control of critical components, repair capacity, delivery timelines, ammunition reserves and the ability to increase production during a crisis.
The distinction is fundamental. A country may manufacture more weapons without becoming fully self-reliant. It may allocate more money without acquiring capabilities quickly enough. And it may possess advanced equipment without having the industrial and logistical systems required to sustain it in a prolonged conflict.
The procurement problem: buying capability is not the same as creating readiness
One of the most important economic lessons of modern warfare concerns the relationship between procurement and operational readiness. Defence acquisition is frequently treated as a transaction: the military identifies a requirement, the government approves a programme, a contract is signed and equipment is delivered. In reality, the process is far more complex. A platform must be integrated into existing formations, supported by trained personnel, supplied with ammunition, maintained through a reliable repair network and connected to command-and-control systems.
The time taken to complete these stages can determine whether a procurement programme produces an operational advantage. If equipment arrives late, quantities are insufficient or supporting infrastructure is incomplete, the military may not receive the capability it expected. The economic cost is then greater than the contract value because money has been committed without the corresponding operational benefit.
India's procurement timelines and delivery delays highlight this institutional challenge. The PRS findings on 19–26 month acquisition periods and delayed deliveries in the CAG sample suggest that reform must extend beyond budget allocation. Procurement procedures need to be responsive to operational urgency, while retaining accountability, technical evaluation and financial discipline.
The same principle applies to domestic defence manufacturing. Production contracts must be predictable enough to support investment in machinery, skilled labour and supply chains. Manufacturers need a clear understanding of future demand, while the armed forces need systems that can be upgraded and maintained over their service lives. The objective should be to build a continuous relationship between operational requirements, research, manufacturing, procurement and maintenance.
A military that purchases equipment without developing the institutions to support it may become dependent on external contractors even when the platform itself is domestically manufactured. Strategic autonomy requires the ability to operate, repair, modify and replenish systems under national control.
What the next land war will demand
The next major land conflict is unlikely to be determined by a single weapon system or one dramatic technological breakthrough. It will be a contest between competing military ecosystems. The most capable force will need advanced sensors, precision weapons, drones, electronic warfare, armoured mobility, artillery, air defence and secure communications. But it will also require sufficient quantities of these capabilities, trained personnel, resilient logistics and an industrial base able to replace losses.
The economic dimension will shape every part of this contest. Military planners will need to assess the lifecycle cost of weapons, the availability of critical components, the time required to replace damaged equipment and the ability of domestic factories to increase output. Governments will have to balance military expenditure against wider economic requirements. Alliances will have to coordinate production and supply arrangements. Defence industries will need to maintain capacity during peacetime so that production can expand rapidly when a crisis begins.
For India, the implications extend beyond the immediate question of modernising the Army. A future continental conflict could require simultaneous pressure on several fronts, sustained high-altitude deployments, large ammunition reserves, extensive engineering support and the ability to protect critical infrastructure. The country will need a defence industrial base capable of supporting prolonged operations, not merely producing impressive annual output figures.
It will also need to think differently about the relationship between cost and capability. The objective should not be to replace every expensive platform with a cheaper alternative. Nor should it be to pursue technological sophistication without regard to affordability and scale. The requirement is a layered force in which high-end platforms, affordable unmanned systems, resilient communications, reliable logistics and industrial replenishment work together.
Above all, the economic foundations of military power must be prepared before the conflict begins. Production lines cannot be built overnight. Skilled workers cannot be trained instantly. Critical components cannot always be sourced during an international crisis. Supply chains cannot be secured after they have already been disrupted. Industrial readiness is therefore a peacetime strategic responsibility.
Strategic Vanguard Take
The war in Ukraine has demonstrated that military superiority is not a static possession. It must be continuously generated, sustained and restored. A country may begin a conflict with a larger arsenal, more advanced platforms or superior technology, but those advantages can erode if it cannot replace ammunition, repair equipment, replenish manpower and maintain the economic resources required for continued operations. Conversely, a country with a resilient industrial base, reliable external support and institutions capable of converting resources into combat power may sustain resistance far longer than its initial military inventory would suggest.
The central strategic lesson is that future land warfare will be shaped by the relationship between technology, industrial capacity, financial endurance and alliance reliability. Precision weapons will matter, but so will the factories producing them. Tanks will matter, but so will the recovery vehicles and repair facilities that return damaged platforms to service. Drones will matter, but so will the electronics, batteries and communications networks that sustain their production and operation. Military budgets will matter, but so will procurement efficiency and the ability to turn expenditure into usable capability.
For India, the challenge is not simply to manufacture more weapons or increase defence expenditure. It is to build an integrated national defence ecosystem capable of sustaining military operations across the full spectrum of a prolonged conflict, while reducing critical external dependencies and strengthening dependable international partnerships.
The battlefield may determine who wins an engagement. The economy, the industrial base and the reliability of a nation's partners may determine who can afford to keep fighting.
Continue Reading
Can India Build the Arsenal for a Long War? The Test of Defence Self-Reliance — India's ability to design, manufacture, repair and replenish critical military systems.
The Ammunition Economy: Why Modern Wars Are Won by Production Lines — Why ammunition output and industrial replenishment set the limits of sustained warfare.
The Arsenal Behind the Arsenal: Why Industrial Power Wins Wars — The industrial networks that allow nations to produce, sustain and replace military power.
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