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India Raises Defence Budget to Accelerate Military Modernisation

The move signals a tech-led drive for indigenous drones, missiles and air defences as production and export targets extend to 2029.

Overview

  • The Defence Ministry meeting in Jaisalmer, chaired by Defence Minister Rajnath Singh on Tuesday, presented a Rs 7.85 lakh crore budget for 2026-27 with a Rs 2.19 lakh crore capital outlay dedicated to modernisation and capital procurement.
  • Singh and senior officials stressed that drones, missiles and layered air-defence systems are now central to India’s force planning and that DRDO and private firms will be tasked to speed development and testing of new systems.
  • Government figures shown at the consultative session put defence production at Rs 1.78 lakh crore in 2025-26 and exports at nearly Rs 40,000 crore, with targets to lift production to Rs 3 lakh crore and exports to Rs 50,000 crore by 2029.
  • The meeting was held outside Delhi so MPs and military leaders could study western border realities first-hand; participants highlighted organisational reforms, human‑resource changes and new Army formations as responses to evolving operational needs.
  • The package signals more defence orders for Indian industry and shifts in force structure that will affect troop roles and procurement timetables, so watch for DRDO test schedules, private-sector capacity expansion and formal rollout of the service reforms.