New Delhi | India’s defence preparedness received a major boost in the Union Budget 2026–27, with Finance Minister Nirmala Sitharaman announcing the highest-ever allocation for the armed forces, reflecting heightened security concerns and the government’s focus on military modernisation.
The overall defence budget has been raised to ₹7.85 lakh crore, marking a significant increase over the previous year. Of this, ₹2.19 lakh crore has been earmarked for capital expenditure aimed at modernisation — a jump of nearly 22 per cent compared to FY 2025–26. Last year’s capital outlay stood at ₹1.8 lakh crore.
A substantial portion of this allocation includes ₹63,733 crore for aircraft and aero engines, underlining the emphasis on strengthening air power and indigenous defence manufacturing. The budget also increases spending on day-to-day defence operations, with revenue expenditure rising by over 17 per cent. Allocations for defence pensions have also been enhanced to ₹1.71 lakh crore, an increase of 6.5 per cent.
According to official estimates, defence spending now accounts for nearly 11 per cent of India’s GDP, up from around eight per cent in the previous financial year.
Defence Minister Rajnath Singh welcomed the move, stating that the budget strikes a balance between national security, development, and self-reliance. He noted that the enhanced allocations align with India’s long-term vision of becoming a self-reliant and developed nation by 2047.
The increased outlay follows Operation Sindoor, described as the most significant military engagement since the 1971 conflict, and comes amid rising regional security challenges. In her speech, Sitharaman also announced customs duty exemptions on select raw materials imported for defence aircraft maintenance, repair, and overhaul, providing a boost to the domestic defence ecosystem.
Over the past two decades, India’s defence expenditure has grown sharply, with a strong focus on indigenous production, exports, and technological advancement — reinforcing the government’s push for Aatmanirbhar Bharat.
