India's defence budget for 2026-27 has reached an impressive ₹7.85 lakh crore, drawing widespread acclaim from global and domestic defence industry leaders. This allocation marks a significant 15 per cent increase over the previous year's ₹6.81 lakh crore outlay, aligning closely with the nation's evolving geo-strategic challenges.

A standout feature is the nearly 22 per cent hike in capital expenditure, totalling ₹2,19,306 crore. This substantial boost targets procurement of advanced weaponry, aircraft, warships, and other military hardware, underscoring a firm commitment to enhancing combat readiness.

Finance Minister Nirmala Sitharaman's budget speech introduced key tax relief measures. These include scrapping basic customs duty on components and parts essential for manufacturing civilian, training, and other aircraft, alongside waivers on raw materials for maintenance, repair, and overhaul in the defence sector.

Industry executives have hailed these moves as transformative. Ankur Kanaglekar, Vice-President of Thales' India operations, described the ₹7.8 lakh crore allocation as a "landmark" reflecting India's resolve to modernise its armed forces.

Kanaglekar emphasised the duty exemptions as signals of long-term strategic intent. They aim to bolster civil aerospace and defence manufacturing capabilities, supporting initiatives like 'Make in India', 'Innovate in India', and 'Export from India'.

Thales remains deeply committed to these pillars, Kanaglekar affirmed. He expressed confidence that collaborative efforts will solidify India's position as a global hub for aerospace and defence production.

Sashi Mukundan, Executive Vice President of Rolls-Royce India, praised the budget as forward-looking and aligned with the vision of Viksit Bharat. The customs duty waivers, he noted, will particularly aid aviation through enhanced support for maintenance, repairs, and overhaul services.

Mukundan also highlighted complementary measures, such as tax holidays for data centres. These will position India as a leader in data and AI, fostering next-generation talent, with Rolls-Royce ready to contribute actively.

Baba Kalyani, Chairman and Managing Director of Bharat Forge Ltd, attributed the budget's strengths to Prime Minister Narendra Modi's visionary leadership. It balances policy continuity, fiscal discipline, and long-term capability building amid geopolitical and supply-chain uncertainties.

Kalyani viewed the defence outlay as a cornerstone, perfectly attuned to geo-strategic realities. It prioritises upgrades to platforms, systems, and technologies, while streamlining procurement processes.

The clear directive to industry, per Kalyani, is to deepen investments in capabilities, technology, and Atmanirbharta—India's self-reliance drive. This approach promises to fortify economic resilience and elevate India's global standing, attracting both domestic and international investors.

The budget has been welcomed as a strategic masterstroke. It not only bolsters military prowess but also catalyses indigenous manufacturing and industrial growth in aerospace and defence sectors.

Based On PTI Report