New Delhi, Nov. 26 -- Taiwan's President Lai Ching-te on Wednesday announced a special $40 billion budget for arms purchases, including to build a Taiwan Dome, an air defense system with high-level detection and interception capabilities, as the U.S. pressures the island to increase its defense spending.

The budget will be allocated over eight years, from 2026 to 2033, and comes after Lai already pledged to raise defense spending to 5% of the island's GDP, as part of his strategy amid China's threats of invasion.

"China's threats to Taiwan and the Indo-Pacific region are escalating," Lai said Wednesday. "Recently, various types of military intrusions, maritime gray zones and disinformation campaigns have been occurring in Japan, the Phi...