India Allocates ₹6.81 Lakh Crore for Defence in 2025-26 Budget

Despite a 9.5% increase in spending, the majority of funds are directed toward personnel costs, limiting modernization efforts.

India's defence budget for 2025-26 is set at ₹6.81 lakh crore, a 9.5% increase from the previous year.
₹4.7 lakh crore of the budget is allocated to personnel costs, including salaries and pensions, overshadowing the ₹1.8 lakh crore capital outlay for modernization and procurement.
Capital outlay includes ₹48,614 crore for aircraft and aero engines and ₹24,390 crore for naval fleet upgrades, with a focus on domestic procurement to boost self-reliance.
Analysts express concerns that the modest 4.6% increase in capital expenditure is insufficient to modernize India's military to counter regional rivals like China.
Challenges in executing defence deals, including lengthy negotiations, have resulted in unspent funds from previous budgets, highlighting inefficiencies in procurement processes.