India Announces Sharp Increase in Defence Budget to Strengthen Security and Modernise Armed Forces

New Delhi: In a decisive move to bolster national security and accelerate the modernisation of the armed forces, the Union Government has announced a substantial increase in the defence budget. An allocation of ₹7.85 lakh crore has been earmarked for the defence sector in the current financial year, marking a 21.84% increase over the previous year.

Key Allocations at a Glance

• Modernisation of Armed Forces:
  A sum of ₹2.19 lakh crore has been allocated exclusively for the modernisation of the Army, Navy and Air Force.

• Aviation and Engines:
  ₹63,733 crore has been set aside for the procurement of aircraft and aviation engines.

• Pensions:
  Expenditure on pensions for retired defence personnel has been increased to ₹1.71 lakh crore, reflecting a 6.53% rise.

• Operational Expenditure:
  Allocations for day-to-day operational requirements—including maintenance, fuel, logistics and salaries—have been raised by 17.24%.

Boost to Atmanirbhar Bharat

Reinforcing the government’s commitment to self-reliance in defence manufacturing, the budget places strong emphasis on indigenous research, development and production. As part of this initiative, the government has decided to exempt basic customs duty on imported raw materials used for the repair and maintenance of aircraft and defence equipment. This move is expected to significantly benefit domestic manufacturers and strengthen the defence industrial ecosystem.

Accelerated Growth Trajectory

In the previous financial year (2025–26), defence expenditure stood at ₹6.81 lakh crore, reflecting a growth of 9.2% at the time. The current allocation represents a major leap, underlining the government’s strategic focus on defence preparedness. Over the past 26 years, India’s defence spending has increased by more than 40%, with the current allocation accounting for nearly 11% of the country’s GDP.

Following Operation Sindoori, expectations were that defence spending would rise by around ₹50,000 crore. However, the government has surpassed those projections, signalling a strong intent to enhance military capability. Alongside strengthening national defence, the Centre also aims to generate revenue through increased exports of defence products, positioning India as a growing global player in the defence manufacturing sector.