India has raised its defence allocation to ₹7.85 lakh crore in Union Budget 2026, marking a sharp jump from last year. The increase reflects a renewed focus on military readiness, modernisation, and rising geopolitical challenges.
Union Budget 2026 has allocated ₹7.85 lakh crore to defence sector
New Delhi: In a major boost to the defence sector, the Union Budget 2026-27 has allocated ₹7.85 lakh crore, marking a sharp increase from the ₹6.81 lakh crore provided in FY 25-26. The increase underlines the government’s continued emphasis on strengthening military preparedness, accelerating modernisation, and ensuring the welfare of armed forces personnel.
According to official Budget documents, the total allocation for the Ministry of Defence in FY27 includes expenditure on defence services (revenue), capital outlay, defence pensions, and civil establishments functioning under the ministry.
In FY26, defence was among the largest components of the Centre’s overall expenditure, reflecting its strategic importance within India’s public investment framework. A substantial portion of last year’s allocation ₹3.12 lakh crore was directed towards defence services (revenue), which covers salaries, allowances, equipment maintenance, training, and operational preparedness of the armed forces.
The Union Budget 2026 has allocated ₹7.85 lakh crore to the defence sector, marking a significant rise from the ₹6.81 lakh crore earmarked in the previous financial year. #budget2026 #defenceBudget2026 #unionbudget2026 pic.twitter.com/mtd9ffgE0Q
— Dynamite News (@DynamiteNews_) February 1, 2026
The sustained rise in allocations suggests continuity in policy, with defence spending viewed not only as a security necessity but also as a driver of long-term national capability.
The rise in defence allocation also reflects evolving geopolitical realities. Heightened tensions along India’s borders, ongoing conflicts in West Asia and Eastern Europe, and growing strategic competition in the Indo-Pacific region have reinforced the need for enhanced military capability. Security analysts note that a volatile global environment has made sustained defence investment essential for safeguarding national interests.
As India’s global strategic role expands, the higher defence budget is seen as a step towards ensuring credible deterrence, strategic autonomy, and preparedness to respond to both conventional and emerging security challenges.
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Government officials have repeatedly highlighted that capital-intensive defence expenditure plays a dual role. Along with enhancing combat readiness, it supports domestic defence manufacturing and reduces dependence on imports.
The Centre has reiterated that an increasing share of defence capital outlay will be channelled towards Indian industry, in line with the broader push for ‘Aatmanirbhar Bharat’ in defence production. This approach is expected to boost indigenous research and development, create high-skilled jobs, and strengthen India’s defence industrial ecosystem.
With the ₹7.85 lakh crore allocation, the government has signalled its intent to maintain defence as a cornerstone of national policy—balancing immediate operational needs with long-term modernisation and self-reliance goals.
