India’s Defence Budget to Rise by 9.5%, Focus on Modernisation and Domestic Growth

Defence Secretary Rajesh Kumar Singh has announced that India’s defence budget will increase by 9.5% in 2025-26, reaching ₹6.81 trillion, up from ₹6.21 trillion in the current year.

Focus on Modernisation and Domestic Procurement

Singh highlighted that India plans to spend $30 billion annually over the next decade to modernise its defence forces. Of this budget, 75% will be allocated to procure defence equipment from domestic sources, with 25% reserved for the domestic private sector.

Growth in Defence Industry and Exports

The Defence Secretary also shared that the value of domestic production in India’s defence sector has risen to ₹1.27 trillion in 2023-24. Additionally, exports have surged to ₹21,000 crore, a 30-fold increase in the past decade. This indicates a significant expansion in the country’s defence industry.

Encouraging New Players and Technologies

Singh emphasised the importance of reducing entry barriers for new companies and technologies, aiming to create a defence industry that is adaptable, agile, and capable of addressing evolving warfare needs. The current ecosystem includes 16 defence PSUs, 430 licensed companies, and around 16,000 MSMEs, forming the backbone of this growth.

Potential Offer of F-35 Fighter Jets from the US

Regarding the potential offer of F-35 fighter jets from the US, Singh clarified that while US President Donald Trump had mentioned exploring a roadmap for supplying the jets, no formal offer had been made. India will assess the offer once it becomes official, following its established procurement process.

Large Budget for Defence Procurements

Singh also noted that India has a significant acquisition budget of ₹1.80 lakh crore for the next financial year and ₹1.60 lakh crore for the current year. These funds will be used for various procurements, including fighter planes, submarines, and missiles, as per the Ministry’s procurement plan.

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