The statistical gap may eventually make a difference, but it certainly won't reach $400 billion. The main impact is that there is some overlap between military and commercial research and development and that infrastructure also provides an increase in military capabilities, which cannot be easily calculated.India is a cake walk for China. Indian defense Budget is too small, Indian Military if too weak and Indian technological base is non-existent.
China does things under the radar. I am sure the actual Chinese defense budget would be north of $400 Billion.
China's investment in semiconductors, for example, will also greatly enhance the capabilities of Chinese electronics for military use.