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This is a period-specific study extending from 1986§to 1999. The year 1986 was selected because that year§India conducted two military exercises Operation§Brasstacks on the western border and Operation§Chequerboard on the Himalayan heights. Pakistan§misread the first operation and both countries were§on the verge of another war. On the eastern front§India had to face China s military power projection§when Chinese forces intruded into the Sumdurong Chu§valley, compelling India to deploy her mountain§division on the Sikkim heights. However, the§situations were contained, without needless§sabre-rattling. Thus, the emanating threat§perceptions made it imperative for India to enhance§its defence expenditure and capital investment.§Reality was contrary to prevailing perceptions. The§Book establishes that aggravation of military threats§to the security of a nation does not necessarily§result in increased expenditure on arms purchase by§that country; to reverse the same proposition, a§decline in expenditure on arms purchase by a country§does not necessarily mean an attenuation of the§existing military threats perceived by that country.