India's Defence Budget Boost: A Path to Modernisation

India plans a 9.5% boost in its defence budget by 2025-26, focusing on domestic procurement and industry expansion. With Rs 1.27 lakh crores in domestic production and increased exports, India aims at reducing entry barriers to bolster its defence ecosystem and considers potential F-35 acquisitions from the US.

India's defence budget is set for a significant increase, rising by 9.5% from the current Rs 6.21 lakh crores to Rs 6.81 lakh crores for 2025-26, announced Defence Secretary Rajesh Kumar Singh. He revealed a strategic focus on modernising the defence sector with an annual expenditure of $30 billion over the next decade.

The emphasis is on domestic procurement, with 75% of the capital expenditure budget reserved for this purpose, including 25% for the private industry. Singh highlighted recent policy changes aimed at facilitating this growth, such as easing Foreign Direct Investment (FDI) norms and simplifying industrial licensing.

As the defence industry stands on the verge of major expansion, Singh underscored the importance of reducing entry barriers to foster innovation. India's industrial framework, already supported by 16 defence PSUs, 430 licensed firms, and 16,000 MSMEs, is pivotal to this growth. Meanwhile, Singh addressed US President Donald Trump's proposal to sell F-35 jets, clarifying that India will assess the offer upon its formalization.