India's launch of an intercontinental ballistic missile with a range of more than 5,000km has prompted another round of bewildered complaints about why Britain is giving aid to a country with a space programme. The answer to that is simple. We give aid to desperately poor people who need it and India has more poor people in just three of its states than there are in the whole of sub-Saharan Africa. But we also give aid for a more realpolitik reason: to buy influence in a country which, with China, is likely to dominate the global economy in the century ahead.

In any case, there is something far more important to worry about than aid. This is not a space programme; it is a race to develop intercontinental nuclear missiles as part of a major modernisation of India's armed forces which is turning the country into the world's top arms importer. A decade of sustained economic growth has allowed India's government to increase military spending by 13 per cent this fiscal year to around US$38bn – about a third of what China spends on its military. This is the real cause for concern.

India has had nuclear weapons since 1974, which is why it has, like Israel and Pakistan, never signed the Nuclear Non-Proliferation Treaty, which came into force four years earlier. At first it was suggested that India should renounce the bomb and sign as a "non-weapon-state". The United States and others imposed sanctions after India upped its nuclear tests in 1998. But today, India enjoys a de facto legitimacy for its nuclear programme. Washington even signed a civil nuclear co-operation deal with it in 2008. The US State Department greeted this week's new missile by saying India's non-proliferation record was "solid".

The truth is that the new long-range missile, which can reach China, is worrying. Washington is more exercised by North Korea's failed rocket launch, just days earlier, and by its assumptions about Iran's nuclear ambitions. That is because, as Nato pronounced this week, India is not considered a threat. But this degree of proliferation threatens us all.

Beijing responded to yesterday's news by saying that, as large developing nations, China and India "are not competitors but partners". That is spin. The influential newspaper of China's ruling Communist Party made belligerent noises about India's rapidly increased military spending and its "disregard for nuclear and missile control treaties". China's own nuclear arsenal was stronger and more reliable, it said, warning India not to work with Western allies to try to contain China.

Two years ago, China signed a civil nuclear deal with Pakistan, and Pakistani experts are reported to be working on a secret nuclear programme with Saudi Arabia. All this ups the ante in a region where China, Israel and Russia are all nuclear players. The world has rightly worried about the prospect of North Korea developing a nuclear weapons capability, though, as its failed rocket test showed, it has no capability to deliver them. But the real concern should be the rate of acceleration of nuclear capability across the board.

India's new rockets are powered by solid fuel, which makes them quicker to use and easier to transport by road, than the liquid-fuelled missiles in China. They can be fired from mobile launchers, which makes it more difficult for an enemy to locate and destroy them. No wonder increased anxiety is reported inside Pakistan.

There may be excellent reasons for the concern shown about the programmes being developed in North Korea and Iran, regimes which promote intransigence, ideology and confrontation. But intention is not the only danger in a nuclear world. The international community would do well to turn its attention to the fast accelerating availability of nuclear potential elsewhere.