Defence Budget 2026: India’s Highest-Ever Military Allocation

New Delhi | February 1, 2026

India’s defence budget 2026 expenditure recorded a landmark achievement in the Union Budget 2026-27 presented on Sunday, when the government allocated a record ₹7.85 lakh crore for the Ministry of Defence. The move reflects the government’s strong focus on national security, military modernisation and strategic preparedness.

The defence allocation in this budget, presented by Finance Minister Nirmala Sitharaman, marks an increase of 15 per cent over the previous fiscal’s around Rs 6.81 lakh crore, making it the largest ever defence budget in the country’s history.

According to official data, this defence allocation is about 14.67 per cent of the total central government expenditure and about 2 per cent of the estimated Gross Domestic Product (GDP). Officials described the increase as a strategic necessity in view of the changing geo-political situation and growing security challenges along the borders.

Major push for military in defence budget 2026

A large part of this increase has been earmarked for capital expenditure, aimed at strengthening the armed forces through the purchase of new military equipment and infrastructure development.

The capital expenditure has been pegged at ₹2.19 lakh crore, which is a significant increase of 21.84 per cent over the previous budget estimates. Of this, ₹1.85 lakh crore has been earmarked exclusively for capital acquisition.

The amount will be used to procure next-generation fighter aircraft, advanced weapon systems, naval platforms, submarines, Unmanned Aerial Vehicles (UAV) drones and specialised military vehicles.

Key Capital Allocation Highlights

• Aircraft and aero engines: ₹63,733 crore
  
• Naval fleet and shipbuilding: ₹25,023 crore

A number of major defence projects will be pursued under this allocation, including contracts for fighter aircraft, submarines and advanced surveillance systems.

Revenue Expenditure and Pensions in defence budget 2026

On the revenue side, the government has made a provision of ₹3.65 lakh crore for operations, salaries, allowances, maintenance and logistics of the three services.

In addition, ₹1.71 lakh crore has been allocated for defence pensions, marking an increase of 6.5 per cent over the previous year. This allocation ensures continued support for serving personnel, ex-servicemen and their families.

Boost for Border Infrastructure

The Border Roads Organisation (BRO) has also got an increase in the defence budget 2026. Its capital allocation has been increased to ₹7,394 crore. This amount will be used for strategic projects like tunnels, bridges and airstrips in border areas, which will improve operational efficiency in inhospitable and vulnerable terrains.

Focus on Indigenisation and Aatmanirbhar Bharat

The Defence Budget 2026-27 further strengthens the Government’s long-term emphasis on self-reliance in defence production under the Atmanirbhar Bharat initiative.

To boost domestic production, the Finance Minister announced exemption from basic customs duty on raw materials and spares required for manufacture, maintenance, repair and overhaul of aircraft used by defence sector units. These measures are expected to reduce dependence on imports, strengthen local manufacturing and boost defence exports.

India has registered record growth in defence production and exports in recent years, and this budget is expected to further accelerate that momentum.

Strategic Context and Global Standing

The increase in defence spending comes at a time when India faces complex security challenges along its northern and western borders. The post-Operation Sindoor scenario has further accentuated the need for accelerated modernisation, emergency weapon procurement and improved operational preparedness.

Defence Minister Rajnath Singh welcomed the allocation, calling it an unprecedented support to the armed forces. He said this budget will help take the capabilities of the three services to global standards and strengthen their preparedness.
With a defence budget of ₹7.85 lakh crore (about $87-94 billion), India is expected to become the world’s fourth-largest defence spender, trailing only the US, China and Russia.

A Clear Signal of Intent

According to analysts, this record allocation is not just limited to data but reflects the long-term strategic intent of the government. Its purpose is not only to increase military capability, but also to strengthen technical self-reliance and effective deterrence.

Moving towards the goal of a developed India 2047, a strong and modern defence mechanism is imperative for the country’s sovereignty and regional stability. With this historic defence budget 2026, the government has taken a decisive step in that direction.