The 'Global Strategic Trends Out to 2045', a publication by Britain's Defence Ministry's Development, Concepts and Doctrine Centre,analyses data across various sectors of energy, mineral resources, conflict and migration.
"Chinese defence expenditure is likely to rival that of the US over the next 30 years, reflecting China's growing economic strength. These two global powers are likely to spend far more on defence than any other country, accounting for almost half of the world's total defence spending by 2045. India's defence budget could see it occupying a 'second tier' by 2045," the report says.
"Additionally, China, India and the US are likely to lead in defence-related research and development further enhancing their military capabilities," it says.
The report, however, warns that higher defence expenditure does not necessarily lead to greater military influence.
"For example, although India is likely to spend more on defence than the UK, it will almost certainly have to overcome domestic political issues and improve the way it invests to attain the capabilities needed to project conventional military power globally," the report says.
"While spending on defence is usually highest during conflict, deterrence can also be associated with high levels of spending for example during the Cold War," it says.
In the field of technology, the analysis indicates that China and India are likely to attain global leadership in select technical disciplines, achieving parity with the West in a number ofniche areas as soon as 2015 and more widely by 2045.
Stating that China and India will "almost certainly continue to be the dominant powers" in the region, the paper says that the ways the two countries manage their societies' demands and their internal methods of governance will be important to the region's development.
In terms of conflict, it is projected that Kashmir would continue to one of the areas of tension, including the border between China and India.
"The risk of a major state-on-state conflict in the region cannot be ruled out," the report says.
The paper is based on inputs from a range of individuals and global institutions, including India's Institute for Defence Studies and Analysis, United Services Institute and the Vivekananda International Foundation.