India is spending billions of dollars to modernize its military as it becomes embroiled in an Asian arms race that is threatening to destabilize the region.

Last year India was the world's leading arms purchaser, including a deal that will spend $20 billion dollars on high performance French fighter planes. India is also developing a long-range ballistic missile capable of carrying multiple nuclear warheads, and buying submarines and surface craft. Its military budget is set to rise 17 percent this year to $42 billion.

"It is ridiculous. We are getting into a useless arms race at the expense of fulfilling the needs of poor people," Praful Bidwai of the Coalition of Nuclear Disarmament and Peace told the New York Times.

But India is not alone.

Asia is currently in the middle of an unprecedented arms race that is not only sharpening tensions in the region, but competing with efforts by Asian countries to address poverty and growing economic disparity. 

The gap between rich and poor-calculated by the Gini coefficient that measures inequality-has increased from 39 percent to 46 percent in China, India, and Indonesia. While affluent households continue to garner larger and larger portions of the economic pie, "Children born to poor families can be 10 times more likely to die in infancy" than those from wealthy families, according to Changyong Rhee, chief economist of the Asian Development Bank, said a report in peoplesworld.org.

China, too, is in the middle of an arms boom that includes beefing up its navy, constructing a new generation of stealth aircraft, and developing a ballistic missile that is potentially capable of neutralizing U.S. carriers near its coast. Beijing's arms budget has grown at a rate of some 12 percent a year and, at $106.41 billion, is now the second largest on the planet. The U.S. budget-not counting the various wars Washington is embroiled in-runs a little over $800 billion, although some have estimated that it is over $1 trillion.

While China has made enormous strides in overcoming poverty, there are some 250 million Chinese officially still considered poor, and the country's formerly red-hot economy is cooling. "Data on April spending and output put another nail into hopes that China's economy is bottoming out," Mark Williams, chief Asia economist at Capital Economics told the Financial Times.

The same is true for most of Asia. For instance, India's annual economic growth rate has fallen from 9 percent to 6.1 percent over the past two and a half years.

Australia is also re-orientating its defense to face China, and Australian Defense Minister Stephen Smith has urged "that India play the role it could and should as an emerging great power in the security and stability of the region."

But that "role" is by no means clear, and some have read Smith's statement as an attempt to rope New Delhi into a united front against Beijing. The recent test of India's Agni V nuclear-capable ballistic missile is largely seen as directed at China.

India and China fought a brief but nasty border war in 1962, and India claims China is currently occupying some 15,000 square miles in Indian territory. The Chinese, in turn, claim almost 40,000 square miles of the Indian state of Arunachai Pradesh. While Indian Prime Minister Manmohan Singh says that "overall our relations [with China] are quite good," he also admits "the border problem is a long-standing problem."

India and China also had a short dust up last year when a Chinese warship demanded that the Indian amphibious assault vessel Airavat identify itself shortly after the ship left the port of Hanoi, Vietnam. Nothing came of the incident but Indian President Pratibha Patil has since stressed the need for "maritime security," and "the protection of our coasts, our 'sea lines of communications' and the offshore development areas."

MotherJones.com reports that on the eve of Secretary of State John Kerry's June 24th visit to India, that country's press was full of reports and rumors about upcoming US military sales. Andrew Shapiro, assistant secretary of state for political-military affairs, was widely quoted as saying that, in addition to sales already in the pipeline, "we think there's going to be billions of dollars more in the next couple of years." 

In his comments, Shapiro referred to Deputy Secretary of Defense Ashton Carter, who, he said, was heading up an arms sales initiative, "which we think is making some good progress and will, hopefully, lead to an even greater pace of additional defense trade with India."

Meanwhile, a report from Australia said critics of planned Australian uranium exports to India warn the deal will accelerate India's nuclear arms race against Pakistan. 

Negotiations to launch Australian uranium exports to India have begun, a move welcomed by the industry at its annual conference in Adelaide.

However critics warn the deal will accelerate India's nuclear arms race against Pakistan - and surprisingly, a former top diplomat agrees, but says it's a fact of life.

Greens anti-nuclear spokesman Senator Scott Ludlam said   India has a history of nuclear accidents, near misses and misadventure, and it's only a matter of time until a serious incident occurs - something he thinks Australia's shouldn't want to be implicated in.

But even more troubling he says is the escalating tension between India and its neighbour Pakistan.

"India is a nuclear weapons state and they're on the record saying they're trying to buy foreign sources of uranium so they can lock up their domestic reserves for a nuclear arms race with Pakistan. So it's a very volatile and dangerous security situation into which to be selling uranium."

Meanwhile, defence chiefs meeting in Singapre last week said Asian countries must guard against destabilizing the region with increased arms spending.

Asian governments, boosted by stronger economic growth and worried by regional tensions, have been beefing up their armed forces and there are fears the build-ups could be dangerous in the long run if not managed well.

“There are indeed inherent perceptional sensitivities in military build-ups that could create miscalculations, misjudgements, and mistrust,” Indonesian Defense Minister Purnomo Yusgiantoro told the Shangri-La Dialogue, an annual forum in Singapore.

“In order to avoid military modernization becoming destabilizing, there is a need for greater strategic transparency.”

Asia overtook European members of NATO in terms of nominal military spending for the first time last year, according to a report by the London-based International Institute for Strategic Studies (IISS) released in March.

In the annual report on the world’s militaries, the IISS — which organises the Shangri-La Dialogue — said China’s defence spending in real terms rose 8.3 percent between 2011 and 2012, while in Asia as a whole, spending rose 4.94 percent last year.