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Home- Regional Stories -India Hikes Defence Spending, Focuses on Military Modernisation

India Hikes Defence Spending, Focuses on Military Modernisation

Our Bureau - : Feb 3, 2025 - : 7:33 pm

India has allocated about INR7 trillion (USD 80.35 billion) for the defence sector in the federal budget for the financial year, ending March 31, 2026.
This includes INR1.8 trillion for the modernisation of the military.

India has plans to buy new fighter aircraft, helicopters, warships, submarines, tanks, artillery guns, drones, and rockets and missiles.

Under capital expenditure, about INR490 billion has been set aside for aircraft and aero engines, while INR240 billion has been allocated for the naval fleet. An amount of INR630 billion has been set aside for other equipment. The allocation is 9.5% higher than what it was in the budget estimates of INR 6.2 trillion for the financial year 2024-25.

“Modernisation of the defence forces has been the priority of our government, and ₹1.8 lakh crore has been earmarked for this. It will help increase the capabilities of the armed forces,” Defence Minister Rajnath Singh said.

About 75% of the modernisation outlay will be spent on buying weapons and equipment from domestic sources to boost self-reliance in the defence manufacturing sector, the minister added.

“To encourage the private sector, a notable percentage of domestic share is further earmarked for acquisition from the private industries. For FY2025-26, INR1.11 lakh crore (75% of the modernisation budget) has been earmarked for procurement through domestic sources and 25% of the domestic share (INR27,886.21 crore or INR279 billion) has been provisioned for procurement through domestic private industries,” the MoD said in a statement.

The allocation for the Defence Research and Development Organisation (DRDO) stands at INR268 billion compared to last year’s INR238 billion.
Of this, about INR150 billion has been allocated for capital expenditure and to fund R&D projects.

 

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