New Delhi, July 07, 2025.
India is preparing to increase its force on the defence front, aiming to ramp up capital expenditure to 2.5% of GDP by FY2026. This is a massive jump from the current 0.5% capital expenditure and 1.9% total expenses.
This isn’t just about bigger budgets—it’s a bold plan to modernise our forces, boost homegrown weapons, and streamline how the military spends its money.
India’s defence budget for FY2026 is a whopping ₹6.81 lakh crore, making up 13.45% of the Union Budget. Out of this, ₹1.48 lakh crore is earmarked for capital spending—think shiny new fighter jets, advanced submarines, and cutting-edge technology like AI and robotics.
Defence Secretary Rajesh Kumar Singh told CNBC, “We’re aiming for a 20% annual growth in capital spending to hit 2.5% of GDP in next five year plans.” That’s a bold leap, but it’s meant to fix gaps in our military’s firepower and readiness.
The Ministry of Defence has dubbed 2025 the Year of Reforms, with a laser focus on Integrated Theatre Commands for unifying the Army, Navy, and Air Force for seamless operations.
This also includes faster procurement to cut red tape to get weapons quicker. This year’s budget also includes a reformative tech Push, which bets big on AI, cyber warfare, and robotics.
With all this as Made-in-India Focus— Collaborating with private firms for homegrown tech.
