India no longer sees Pakistan as a major threat, and is now measuring itself against China, and finding itself wanting. China spends more than three times as much (over $100 billion a year) on defense, and has twice as many troops (two million). Indian defense officials are calling for more money. But China has nearly three times the GDP of India, as well as higher literacy rates, a better educated workforce and higher GDP growth. Worse, China is making a more vigorous effort to deal with corruption. Both nations have long suffered from the debilitating effects of corruption. While China is 78th on the list of least corrupt nations, archrival India is at 87. China has been prosecuting far more corrupt officials, and convict many more, than India. Moreover, corruption is one of the reasons literacy in India is 72 percent, versus 98 percent in China. Too many Indian teachers got their jobs as a political favor, and dont really teach. This sort of thing is much less common in China. The Chinese leadership recognize that corruption is a threat to their (Communist Party) rule in China, and the jobs of all those senior officials. So it's a matter of clean up, or risk another revolution. India is a democracy, where voters can keep electing politicians who promise to deal with corruption, and never do. This is just another reason why the Chinese leadership sees no big advantage in democracy.
China does see the advantages of having a big navy, to protect crucial trade routes that pass through the Indian Ocean. Thus both nations are currently engaged in something of a naval arms race, and India is losing. India and China also share a long border. Responding to louder, and more frequent, Chinese claims on Indian territory, India is in the midst of an army and air force buildup to deal with any Chinese aggression against the northeast Indian state of Arunachal Pradesh (which China claims as a part of Tibet.) The Chinese claims have been on the books for decades, but in the last two years, China has become more vocal about it. That's one reason India hiked its defense spending over the last few years. That's not enough, for a conventional war. But since both nations have nuclear weapons, a major war over Arunachal Pradesh is unlikely. But India fears that China might try to carry out a lightning campaign (a few days, or a week), and then offer peace terms (with China keeping all or part of Arunachal Pradesh). Since neither country would be willing to start a full scale nuclear war over Arunachal Pradesh (a rural area with a population of about a million people, spread among 84,000 square kilometers of mountains and valleys), the "grab and parley" strategy has to be taken seriously.
India is seeing more Chinese warships in the Indian Ocean, and is alarmed at Chinese plans to base warships in Burma, or at least obtain the right to regularly refuel and repair Chinese warships in Burmese ports. That, and the growing network of Chinese roads being built to the Indian border, and movement of air force and army troops to Tibet (where most of the border with India is), makes India increasingly nervous of the threat from the north.