New Delhi: The Ministry of Defence is preparing to seek an increase of up to 35% in the military modernisation budget for the financial year 2027–28, aiming to accelerate equipment procurement and strengthen the operational capabilities of the armed forces.
Speaking at the annual session of the Society of Indian Defence Manufacturers (SIDM), Defence Secretary Rajesh Kumar Singh said the ministry would push for the proposed 35% increase, although a rise of around 25% was considered a more realistic baseline. If approved, the allocation could approach $30 billion.
Singh said the ministry had fully utilised its revised modernisation allocations in both 2024–25 and 2025–26, highlighting the need for additional funding to sustain ongoing military upgrades.
The ministry reportedly signed capital acquisition contracts worth more than ₹2 trillion across the two financial years. Key procurement priorities include Multi-Role Fighter Aircraft (MRFA) and agreements for jet engine co-production. Reforms to the Defence Acquisition Procedure are also underway to streamline procurement.
The proposed increase could support the acquisition of aircraft, warships, submarines, armoured vehicles, missiles and unmanned aerial systems for the Army, Navy and Air Force.
Singh estimated that India’s drive towards defence self-reliance could create annual business opportunities worth $20 billion to $25 billion for domestic manufacturers over the next decade.
The Defence Research and Development Organisation also plans to transfer technologies for conventional missile systems to private companies by November 2027.
The proposed budget increase remains subject to government approval. The final allocation will determine the scale of funding available for military modernisation and domestic defence manufacturing.
