India’s central government announced a significant increase in defence spending on Sunday, raising the overall budget to Rs 7.85 lakh crore for the current financial year. This represents a nearly 15% increase from the previous year’s allocation of Rs 6.81 lakh crore. The move signals a continued focus on military readiness and modernization, particularly in light of recent tensions with Pakistan and China, including a brief conflict with Islamabad last year.
Increased Capital Expenditure
A key component of the budget increase is a 28% rise in defence capital expenditure, reaching Rs 2.31 lakh crore, up from Rs 1.80 lakh crore in the prior year. This increased outlay is intended to support the acquisition of advanced weapon systems and bolster domestic defence manufacturing. Last month, a Rs 3.25 lakh crore deal was finalized for the acquisition of 114 Rafale jets from France.
The government has also exempted basic customs duty on raw materials imported for the maintenance, repair, and overhaul of defence units.
Long-Term Trends and ‘Aatmanirbharta’
Over the past decade, India’s defence budget has consistently increased. However, defence expenditure as a percentage of GDP has remained relatively stagnant, reaching 1.9% in 2025-26. For comparison, Pakistan allocated 2.3% of its GDP to defence last year. Total defence expenditure has risen from Rs 2.94 lakh crore in 2015–16 to Rs 7.85 lakh crore in 2025-26.
This year’s budget reflects a continued emphasis on “Make in India” and self-reliance in defence manufacturing, a priority that gained momentum following last year’s Operation Sindoor, which highlighted the capabilities of indigenous equipment like the Akash air defence system and Nagastra loitering munition.
Defence production reached Rs 1.54 lakh crore in FY 2024-25, and defence exports hit an all-time high of Rs 23,600 crore in the same period, with key exports including the BrahMos supersonic cruise missile, Akash SAM system, and Pinaka multi-barrel rocket launchers to countries like France and Armenia.
Frequently Asked Questions
What is the total increase in the defence budget?
The defence budget has increased by nearly 15%, from Rs 6.81 lakh crore to Rs 7.85 lakh crore.
What is the focus of the increased capital expenditure?
The increased capital expenditure, now at Rs 2.31 lakh crore, is focused on acquiring advanced weapon systems and boosting domestic defence manufacturing.
What was the value of defence exports in FY 2024-25?
Defence exports reached an all-time high of Rs 23,600 crore in FY 2024-25.
As India continues to navigate a complex geopolitical landscape, how might this increased investment in defence shape its regional and global role in the years to come?
