India Announces Record Rs. 7.85 Lakh Crore Defence Budget, Signals Strategic Push Post–Operation Sindoor
New Delhi, Feb 1: India has unveiled its highest-ever defence allocation of ₹7.85 lakh crore in the Union Budget 2026-27, marking a 15.19% increase over the previous year’s Budget Estimates and underscoring the government’s focus on military preparedness, modernisation and self-reliance amid a challenging security environment.
The allocation, announced in the aftermath of Operation Sindoor, accounts for nearly 2% of the country’s estimated GDP and 14.67% of total central government expenditure, making defence the single largest spending ministry.
Major Push for Modernisation and Indigenisation
A key highlight of the budget is the sharp rise in capital expenditure, aimed at upgrading the Armed Forces’ combat capabilities.
₹2.19 lakh crore has been allocated under the capital head, a 24% jump over FY 2025-26
₹1.85 lakh crore earmarked for capital acquisition
₹1.39 lakh crore, or 75% of the acquisition budget, reserved for procurement from domestic industries, including private players
The funds will be used for acquiring next-generation fighter aircraft, warships, submarines, drones, UAVs, missiles and specialist vehicles, reinforcing the government’s push towards Aatmanirbhar Bharat in defence manufacturing.
Raksha Mantri said the budget would further strengthen Prime Minister Narendra Modi’s vision of an “Aatmanirbhar and Viksit Bharat.”
Operational Readiness, Pensions and Veteran Welfare
The budget also sustains higher spending on operational readiness and troop welfare.
₹3.65 lakh crore allocated under revenue heads, a 17.24% rise
₹1.58 lakh crore for operations, maintenance, spares and ammunition
₹1.71 lakh crore for defence pensions, benefiting over 34 lakh pensioners
Veteran healthcare has seen a major boost, with ₹12,100 crore allotted to the Ex-Servicemen Contributory Health Scheme (ECHS)—a 45.49% increase over last year.
R&D and Border Infrastructure Strengthened
Defence research has received renewed attention, with DRDO’s allocation rising to ₹29,100 crore, including ₹17,250 crore for capital expenditure.
The Border Roads Organisation has been allocated ₹7,394 crore for strategic roads, tunnels, bridges and airfields in border areas.
How India Compares Globally
With this allocation, India’s defence budget now stands at approximately USD 95 billion, placing it third globally after:
United States: ~USD 880 billion
China: ~USD 230–250 billion
In contrast, Pakistan’s defence budget, estimated at USD 8–10 billion, remains less than one-ninth of India’s spending, highlighting a widening gap in conventional military capabilities in South Asia.
Strategic Signal
Analysts view the Budget 2026-27 as a clear strategic signal—from increased capital spending and domestic procurement to higher R&D investment—that India is transitioning from manpower-heavy defence spending to technology-driven military capability, aligning itself more closely with major global powers.
The record allocation reflects New Delhi’s intent to bolster deterrence, secure its borders, and position India as a strong, self-reliant defence power in an increasingly uncertain global order.