Arms suppliers to India win. We instead have accepted having a few slightly inferior weapons (though when averaged out, our air combat SYSTEM capability is far stronger than india's) in return for indigenous production of everything except heavy lift planes so far - but the heavy lift plane is already in flight testing and has already been announced.
This in turn simplifies logistics, streamlines training and makes up for having weapons that are worse on paper. I'd say, it far more than makes up for that. One reason for the weakness of air forces that cannot produce their own planes and use planes from multiple countries is that logistics is a nightmare. We don't have that problem, we make everything ourselves. Arms suppliers are not going to make one cent off China. In fact, China is the 7th largest arms supplier in the world with revenues of 870 million USD in 2009. and thanks to sanctions we were forced to produce everything ourselves.
It would in fact stimulate our economy to fight a short, limited war. This is not currently necessary as non-war economic growth is so high. But when our growth dips below about 5% needed for wages to keep pace with population growth and inflation, we'll be forced to have a stimulus plan.