Defence budget will go up by 9.5% to Rs. 6,81,000 crore (US$ 78.32 billion) in 2025-26: Defence Secretary Mr. Rajesh Kumar Singh

India's defence budget is set to increase by 9.5%, rising from Rs 6,21,000 (US$ 71.42 billion) to Rs. 6,81,000 crore (US$ 78.32 billion) in 2025-26, as announced by Defence Secretary Mr. Rajesh Kumar Singh. This rise is part of a larger modernization effort, focusing on spending Rs. 2,60,850 crore (US$ 30 billion) annually over the next decade. The capital expenditure (capex) budget will allocate 75% for procurement from domestic sources, including private industries, with the remaining 25% earmarked for the domestic private sector. Mr. Rajesh Kumar Singh emphasized that relaxed Foreign Direct Investment (FDI) policies and changes to industrial licensing procedures will further boost the growth of India's defence industry. The domestic production value in 2023-24 reached Rs. 1,27,000 crore (US$ 14.61 billion), with exports jumping 30 times in the last decade to Rs. 21,000 crore (US$ 2.42 billion).

He also highlighted the expansion of India's defence industrial ecosystem, which includes 16 defence public sector units (PSUs), 430 licensed companies, and approximately 16,000 micro, small, and medium enterprises (MSMEs). He stressed the importance of reducing entry barriers to encourage new players and technologies to make the sector more adaptive and agile in response to evolving warfare needs. On the procurement front, he clarified that India is open to exploring the potential purchase of F-35 fighter jets from the United States (US). However, it would only proceed once a formal offer is made. India's large acquisition budget of Rs. 1,80,000 crore (US$ 20.70 billion) for the next financial year and Rs. 1,60,000 crore (US$ 18.40 billion) for the current year, will be used for various procurements, including fighter planes, submarines, and missiles.

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