A new analysis of arms spending from Jane's Defence Budgets Report 2016 found that India has outgunned Russia and Saudi Arabia to become the world's fourth-largest defence spender.

Asia's third-largest economy spent $50.6 billion in 2016, up from $46.6 billion last year. India now has the fourth-largest defence budget, followed by Saudi Arabia and Russia. While Russia was at the fourth place last year, in 2016, it slipped to the sixth spot.

The US, China, and the UK remain the top three, IHS Jane's data shows. The report says that by 2018 India will become the third-largest in the group, surpassing the UK.

"Procurement spending has been constrained in India over the last three years as personnel costs have increased," Craig Caffrey, principal analyst, IHS Jane's, 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."