Budget 2026: What do the five-year figures tell us about India’s defense spending? & more related News Here

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2026 on February 1, defense spending is expected to remain a key focus amid rising geopolitical uncertainty and continued emphasis on military modernisation.

Defense outlay is witnessing a steady increase

Over the past five years, India’s defense expenditure has increased markedly. Expenditure increased from Rs 4.85 lakh crore in FY2011 to Rs 6.41 lakh crore in FY2015 (revised estimates). For FY26, the budget estimate puts defense expenditure at Rs 6.81 lakh crore. This reflects consistent annual growth, underscoring the government’s priority on national security and preparedness.Data shows defense spending has increased by nearly Rs 2 lakh crore since FY2011, with a sharp increase in recent years as border tensions and global conflicts have reshaped the security calculus.

Shift towards modernization and capital expenditure

The increasing allocation has been coupled with rapid modernization and capital expenditure. According to the PIB release on Budget 2025-26, Rs 1.80 lakh crore, or about 26% of the total defense outlay, was earmarked for capital expenditure, with emphasis on domestic procurement. self-reliant india Initiative. A significant portion of the modernization budget has been reserved for procurement from Indian industries, including private sector.Industry body FICCI, in its pre-Budget 2026 memorandum, has argued that this trend needs to be deepened, and called for increasing capital outlay to about 30% of the total defense budget. According to FICCI, future warfare will be “technology-driven, multi-domain and information-centric”, which will require investments beyond traditional platforms.

Budget 2026 Expectations: Technology, R&D and Exports

With defense spending already on the rise, Budget 2026 is expected to focus on qualitative upgrades rather than just headline increases. FICCI has advocated higher allocation for defense R&D, including an increase of Rs 10,000 crore for DRDO and greater support for AI-enabled systems, UAVs, cyber and space capabilities.Defense exports are another priority area. Exports are expected to grow at a compound annual rate of 46% between 2016-17 and 2023-24, largely driven by private companies, and the government has set a target of Rs 50,000 crore by 2028-29. Analysts say the upcoming budget will indicate whether India’s ever-increasing defense spending can translate into sustained self-reliance and global competitiveness.