Budget 2026: Govt allocates Rs 7.85 lakh crore to defence, over 15 per cent hike from last year
India's Defence Budget 2026–27 signals a decisive push towards a technologically advanced and self-reliant military. In line with the ViksitBharat@2047 vision, the defence budget prioritises modernisation, technological innovation and efficient procurement to ensure optimal use of resources.
The government has significantly increased defence spending in the Union Budget 2026, allocating Rs 7.85 lakh crore for the sector. This marks a notable rise from last year's Rs 6.81 lakh crore. The heightened allocation comes at a time when the Ministry of Defence is processing major procurement programmes, including upcoming contracts for Rafale fighter jets, submarines and advanced unmanned aerial vehicles.
Out of this total allocation, Rs 2.19 lakh crore has been earmarked specifically for the modernisation of the Armed Forces. This funding will support the acquisition of advanced weapon systems, cutting-edge technology, indigenous defence manufacturing and capability enhancement across the Army, Navy and Air Force.
Rajnath Singh hails defence budget 2026
The Union Budget 2026-27 will help in further strengthening India’s defence capabilities. I thank PM Shri @narendramodi for allocating a record Rs 7.85 Lakh crores towards the Defence sector. Notably, defence leads with the highest allocation at Rs 7.85 lakh crore, accounting for 14.68% of the Union Budget, strengthening preparedness, driving innovation, and reinforcing India’s national security.
Breakdown of defence allocation
The increased budget reflects a continued push towards self-reliance in defence (Aatmanirbhar Bharat), strengthening operational readiness and ensuring the forces remain equipped to meet emerging and future security challenges. According to the Budget papers, the total outlay for the Ministry of Defence in FY27 includes defence services revenue expenditure, capital outlay, defence pensions and spending on civil establishments under the ministry. The increased allocation aims to support both operational preparedness and long-term capability development.
Comparison with the previous budget
In the FY26 Budget, the Centre had assigned Rs 6.81 lakh crore to the defence sector, which was one of the largest components of government expenditure. Within that, defence services revenue expenditure amounted to Rs 3.12 lakh crore, covering salaries, allowances, equipment maintenance and operational requirements.
How India compares with global defence budgets
Globally, India continues to remain among the top defence spenders. China had announced a massive USD 249 billion defence budget for 2025,26, marking a 7.2 per cent increase over the previous year. Meanwhile, the United States remains the world's biggest military spender. According to Global Fire Power, the US defence budget stands at a staggering USD 895 billion.
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