India to Propose 20% Increase in Defence Budget for FY 2025-26 to Address Security Challenges: Defence Secretary
India is set to signal a shift in its security priorities as Defence Secretary Rajesh Kumar Singh has indicated a potential increase of 20% in the defence budget for the 2025-26 fiscal year, which is significantly higher than the usual 10% annual increment.
This proposed budget hike is seen against the backdrop of a complex geopolitical landscape, persistent border tensions, and the necessity for swift military modernization and self-reliance.
Currently, India allocates approximately 1.9% of its GDP to defence spending. Officials assert that this percentage must be raised to accommodate necessary capability developments, technological advancements, and the evolving domains of warfare. The Union Budget for 2025-26 allocated over ₹6.8 lakh crore to defence, with ₹1.8 lakh crore specifically designated for modernization efforts.
According to Singh, the proposed 20% increase is intended to ensure comprehensive funding for both ongoing and planned developments. These include advancements in weapons, aircraft, naval resources, systems for cyber and space warfare, and enhancements in infrastructure for frontline troops.
The increased budget will notably focus on boosting domestic spending. Singh emphasized that foreign Original Equipment Manufacturers (OEMs) must collaborate with Indian companies for co-production to gain access to India's defence market, aligning with the government's Atmanirbhar Bharat initiative.
Forthcoming positive indigenisation lists are anticipated to further limit imports while encouraging Indian companies, including MSMEs, to create crucial defence technologies.
The Defence Secretary associated the need for an augmented budget with several operational imperatives:
| The ongoing operational commitments, including Operation Sindoor |
| The necessity to promptly address an increasingly complex security environment |
| Ensuring readiness across all military services through continuous logistics, maintenance, and infrastructure upgrades |
Singh also pointed out India's balanced procurement strategy, which includes strong alliances with traditional partner Russia, increasing acquisitions from the United States, and a vigorous push for domestic production.
The government has warned defence manufacturers about the repercussions of delays, emphasizing the importance of timely contract completion. Singh noted that India’s growing industrial base is capable of effectively absorbing the increased budget.
Should the proposed 20% budget increase be approved, it would represent one of the most significant annual raises for India in recent years. The increase is expected to:
| Enhance India’s military capabilities |
| Strengthen domestic production |
| Boost strategic autonomy |
| Support long-term economic and security goals |
India's drive for a larger defence budget reflects a strategic approach aimed at bolstering deterrence, fostering indigenisation, and protecting national interests amidst a volatile regional environment.
