Budget 2023: With Rs 5.94 lakh, Defence Ministry sets its eyes on weapons procurement

The Union Budget 2023 has allocated Rs 5.94 lakh to the Ministry of Defence, up from Rs 5.25 lakh allocated last year. The allocation comes amid tensions along the border. The Defence Ministry is expected to use this funds to ramp up defence production. A sum of Rs 1.62 lakh crore has been reserved for capital expenditure, which includes procurement of defence equipment such as weapons, warships, aircraft and other military hardware. Capital expenditure in the defence sector plays  significant role in strengthening India's defence manufacturing and production capabilities. 

Scope of asset procurement and export

The previous Union budget prioritised defence spending with the MoD being granted the highest allocation of Rs 5.25 lakh crore, 13.31% of the total budget. Modernisation and infrastructure development of the Indian Armed Forces was set as the key objective by the government to enhance National Security and Defence Planning process, the MoD said. Meanwhile, the government’s bid to modernise the armed forces went hand-in-hand with the indigenisation of weapon procurements.

Following the Galwan valley clash and an ensuing border stand-off with China at the Line of Actual Control (LAC), the Indian Army invited India’s defence industry to offer critical defence equipment under emergency procurement in September 2022. Notably, India’s Defence Minister Rajnath Singh chaired a meeting of the Defence Acquisition Council (DAC) on January 10 and approved Acceptance of Necessity (AoN) for three capital acquisition proposals for the Indian Armed Forces. The government’s bid was cited as a necessity to equip the nation to face challenges which may arise considering the "fast-evolving global security scenario", the defence minister stated.

Under the latest budget allocation, the Indian Army will have its sights on acquiring ballistic helmets, mounted gun systems, light tanks, and futuristic infantry combat vehicles. Moreover, the central government has pushed for domestic defence equipment production to reduce dependence on foreign elements. According to India Brand Equity Foundation (IBEF), India currently has defence cooperation agreements with up to 53 nations.

President of India and supreme commander of the Indian Armed Forces, Droupadi Murmu stated that the government’s new initiatives have led to a “six times” increase in India’s defence exports. Notably, according to the Indian Defence Ministry’s year-end review (2022), defence exports grew by 334% in the last five years and touched a record Rs 13,000 crore in FY 2021-22. The review added that India is engaged in exporting defence equipment to over 75 countries. “I am proud that today the first indigenous aircraft carrier in the form of INS Vikrant has also joined our Navy," President Murmu said while addressing the Parliament’s Budget session.