The government has also relaxed certain rules to cut delays in military purchase like allowing the three services to procure required weapons and equipment from a single vendor, the sources said.
Twenty Indian Army soldiers were killed in a violent clash in eastern Ladakh's Galwan Valley on June 15, triggering a massive escalation in tension between the two countries.
Defence Minister Rajnath Singh has already directed the army, the Indian navy and the Indian air force to enhance their operational readiness along the LAC, the 3,500 km de-facto border between India and China, amid fears of fresh confrontation.
Military sources said the army is going to use the emergency financial powers to expand its stock of ammunition as there is little possibility of any resolution of the standoff soon.
"The three services have been given emergency financial powers of up to Rs 500 crore per procurement project," said a source.
