
In nominal terms, and before the effects of inflation, India's defence budget has grown steadily in recent years to reach INR6.81 trillion in 2025–26. (Janes)
India's Ministry of Defence (MoD) announced on 1 February a 2025–26 defence budget of INR6.81 trillion (USD78.4 billion).
The MoD said the new budget represents about 13.5% of total annual government expenditure and a nominal increase (before inflation) of about 9.5% over the defence budget for 2024–25.
The largest proportion of the funding of the new defence budget will be allocated to the armed forces, which receives INR3.1 trillion (or 46% of the total allocation). Capital outlay for defence services – including acquisitions and research and development (R&D) – receives INR1.8 trillion (26%) and defence pensions is allocated INR1.6 trillion (24%). The remaining 4% of the budget is ring-fenced for civil organisations under the MoD.
Compared with allocations in 2024–25, the armed forces allocation in 2025–26 increases by about 10%, capital outlay for defence services rises by nearly 5%, and defence pensions increases by about 13%.
From the 2025–26 capital outlay expenditure, about INR1.49 trillion is allocated for capital acquisitions – termed by the MoD as modernisation budget – and the remaining INR313 billion is for R&D and the “creation of infrastructural assets across the country”.
The MoD said that 75% of the modernisation budget – or about INR1.11 trillion – will be spent on procurement through domestic sources and that the remaining 25% will be allocated for procurements only from local private-sector companies.
Commenting on the modernisation budget, the MoD said the funds will support its plans to enhance military jointness and integration as well as develop new military technologies including cyber, space, artificial intelligence, and robotics.
Looking to read the full article?
Gain unlimited access to Janes news and more...