Updated 14:51 IST, February 4th 2025
India’s Defence Budget Soars to ₹6.81 Lakh Crore for FY 2025-26, Highest Among All Ministries
The Union Budget for FY 2025-26 has allocated ₹6,81,210.27 crore to the Ministry of Defence, a 9.53% increase from last year.

New Delhi, India – In a major push towards making India's Armed Forces more technologically advanced and self-reliant, the Union Budget for the financial year (FY) 2025-26 has allocated a record-breaking ₹6,81,210.27 crore for the Ministry of Defence (MoD). This allocation marks a 9.53% increase from the Budgetary Estimates (BE) of FY 2024-25 and constitutes 13.45% of the Union Budget, making it the highest among all ministries.
This significant budgetary boost aligns with Prime Minister Narendra Modi’s vision of ‘Viksit Bharat @2047’ and underscores the government's commitment to modernizing the Armed Forces under the ‘Aatmanirbhar Bharat’ initiative. The Ministry of Defence has also declared FY 2025-26 as the ‘Year of Reforms’, focusing on simplifying defence procurement procedures for optimal resource utilization.
Addressing the media, Defence Minister Rajnath Singh lauded Finance Minister Nirmala Sitharaman for presenting a budget that empowers the Armed Forces while promoting national development. "This budget will drive growth across all sectors, benefiting youth, farmers, women, and the middle class. The unprecedented provisions for defence will ensure that our forces remain combat-ready and technologically superior," he stated.
Capital Outlay: Strengthening India's Defence Capabilities
To meet the evolving challenges of modern warfare and enhance combat readiness, the government has allocated ₹1,80,000 crore for Capital Outlay on Defence Services, which represents 26.43% of the total defence budget. This allocation is 4.65% higher than that of FY 2024-25.
A key focus of the capital outlay is on the modernization of the Armed Forces, with ₹1,48,722.80 crore set aside for capital acquisition, commonly known as the modernization budget. Additionally, ₹31,277.20 crore has been earmarked for Research & Development (R&D) and the creation of defence infrastructure across India.

Under the Aatmanirbhar Bharat initiative, a major share of this budget will be directed towards domestic procurement:
- ₹1,11,544.83 crore (75%) of the modernization budget is reserved for procurement from Indian defence manufacturers.
- ₹27,886.21 crore (25%) is allocated for procurement from the private sector, further encouraging indigenous defence manufacturing.
These investments will support critical defence acquisitions in FY 2025-26, including:
- Long Endurance Remotely Piloted Aircraft (High & Medium Altitude)
- Deck-based Fighter Aircraft
- Next-Generation Submarines and Warships
- Advanced Cyber & Space Warfare Capabilities
- Artificial Intelligence (AI), Machine Learning, and Robotics in Warfare

This capital investment is expected to have a multiplier effect on India's economy, boosting GDP growth and job creation in the defence sector.
Operational and Sustenance Budget: Ensuring Readiness and Deployment
The Revenue Budget, which covers pay, allowances, and operational sustenance, has been increased by 10.24% to ₹3,11,732.30 crore. This includes:
- ₹1,14,415.50 crore for non-salary expenditures such as ration, fuel, ordnance stores, and equipment maintenance.
- ₹1,97,317.30 crore for pay and allowances of defence personnel.
The increased revenue allocation will support additional troop deployments in border areas, longer sea deployments for naval operations, and higher flying hours for Air Force aircraft.
Boost to Defence R&D: Strengthening DRDO
The Defence Research and Development Organisation (DRDO) has received ₹26,816.82 crore, marking a 12.41% increase from FY 2024-25. The capital share of this budget stands at ₹14,923.82 crore, which will be used to:
- Fund new defence technology projects.
- Promote fundamental research.
- Provide financial support to private industries through Development-cum-Production Partner initiatives.
The Technology Development Fund (TDF) will be further strengthened, encouraging private-sector participation in cutting-edge defence innovation.
Encouraging Startups & Innovation: iDEX and ADITI Schemes
To foster a startup ecosystem in the defence sector, the budget has earmarked ₹449.62 crore for the Innovation for Defence Excellence (iDEX) scheme, including its sub-scheme Acing Development of Innovative Technologies with iDEX (ADITI). This allocation has tripled over two years, reflecting the government's commitment to self-reliance in defence technology.
To support nearly 34 lakh defence pensioners, the government has allocated ₹1,60,795 crore for Defence Pensions, an increase of 13.87% over FY 2024-25. This includes provisions for the third revision of One Rank One Pension (OROP), implemented in July 2024.
For healthcare support to ex-servicemen and their families, ₹8,317 crore has been allocated to the Ex-Servicemen Contributory Health Scheme (ECHS), marking a 19.38% increase over the previous year.
Enhancing Coastal Security: Indian Coast Guard (ICG)
The Indian Coast Guard (ICG) has received ₹9,676.70 crore, reflecting a 26.50% increase in its budget. This includes:
- ₹5,000 crore for capital acquisitions such as Advanced Light Helicopters (ALH), Dornier Aircraft, Fast Patrol Vessels (FPVs), Training Ships, and Interceptor Boats.
- ₹4,676.70 crore for revenue expenditure, ensuring operational readiness.

The budgetary boost will help the ICG strengthen maritime security, search-and-rescue operations, and disaster response capabilities.
Strengthening Border Infrastructure: Border Roads Organisation (BRO)
To enhance India's border infrastructure, the Border Roads Organisation (BRO) has been allocated ₹7,146.50 crore, an increase of 9.74% from FY 2024-25. These funds will be utilized for:
- Strategic road projects like LGG-Damteng-Yangtse (Arunachal Pradesh), Asha-Cheema-Anita (J&K), and Birdhwal-Puggal-Bajju (Rajasthan).
- Construction of tunnels and bridges to improve troop mobility in high-altitude regions.
- The increased allocation will also generate employment opportunities, with BRO employing over 70,000 local youth in road construction projects.

The ₹6.81 lakh crore allocation for the defence sector in the FY 2025-26 budget demonstrates India's unwavering commitment to a modernized, self-reliant, and technologically advanced military. With record-high capital outlays, enhanced R&D spending, and reforms in procurement, the government is ensuring that India's Armed Forces remain combat-ready in an evolving geopolitical landscape.
Published 14:51 IST, February 4th 2025