India is expected to seek a 20% higher defence budget allocation for the fiscal year 2025-26, a significant increase from the usual 10% annual rise, as stated by Defence Secretary Rajesh Kumar Singh.

This proposed hike is driven by India's challenging geopolitical neighbourhood and the imperative to strengthen defence preparedness amid growing regional security concerns.

The current defence expenditure accounts for about 1.9% of GDP, and there is scope to raise this share to adequately meet capability development and modernisation needs.

The Defence Secretary highlighted that the additional budget increase aims to cover all capability development plans, including modernising the armed forces and accelerating defence indigenisation. India allocated over ₹6.8 lakh crore in the 2025-26 Union Budget for defence, marking a 9% increase over the previous year, with about ₹1.8 lakh crore dedicated to military modernisation.

Singh emphasised the government's focus on spending the bulk of the defence budget domestically, requiring foreign original equipment manufacturers (OEMs) to participate in co-production with Indian firms to access the market.

The increased defence budget comes against the backdrop of ongoing operations like Operation Sindoor and the need to respond effectively to a complex security environment. Singh also discussed the longstanding defence cooperation with Russia alongside diversification of defence procurement, with increased purchases from the United States and measures to boost domestic production through "Make in India" initiatives.

The department of military affairs is expected to announce new positive indigenisation lists to further support self-reliance in defence manufacturing.

Singh assured that the requested 20% budget increase is achievable, given India's diversified industrial base and absorptive capacity. Government warnings to defence industry players about contract delivery timelines underscore the seriousness about efficient procurement processes.

The strategic intent is not only to increase budgetary allocations but also to ensure timely contract execution and boost India's indigenous defence production capabilities, supporting long-term security and economic objectives.

India's move to seek a 20% larger defence budget for FY26 signifies a proactive approach to enhancing military capabilities, fostering domestic defence industries, and adapting financial strategies in line with geopolitical demands and strategic autonomy goals.

Based On ET News Report