Budget 2025: Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in the Lok Sabha and announced major allocations across key sectors, including youth, women, education, and healthcare. Among the significant announcements, the defence sector has received a boost, with a total allocation of Rs 6.8 lakh crore to strengthen India’s military capabilities. In total, Sitharaman allocated a total of Rs 6,81,210 crore for 2025-26, an increase of 9.5 per cent from the previous year’s Rs 6,21,940 crore.
The allocation for the defence sector accounts for approximately 1.91% of India’s estimated Gross Domestic Product. Out of this, Rs 1.8 lakh crore has been allocated under the capital budget, intended for the acquisition of new weapons, aircraft, warships, and other military equipment.
Here’s the breakdown of the defence budget
- Capital budget: Rs 1.80 lakh crore for the modernisation of the armed forces
- Indigenous procurement: Rs 1.12 lakh crore for domestic defence industry purchases
- Defence pensions: 14% increase in allocations
- ECHS (Ex-Servicemen Contributory Health Scheme): Rs 8,317 crore
- Defence Research & Development: 12% rise in budget
- Indian Coast Guard (ICG) capital budget: 43% increase
- Border Roads Organisation (BRO): Rs 7,146 crore allocated under the capital head
How does it compare to last year?
In 2024, the defence allocation was Rs 6.21 lakh crore — a 4.79% increase over the Rs 5.94 lakh crore allocated in 2023-24. This year’s defence budget has seen a Rs 60,000 crore jump which shows a a strong push towards military modernisation and strategic preparedness.
Modernisation of armed forces
It should be mentioned here that the Indian armed forces are also undergoing a critical phase of modernisation to replace outdated equipment and systems with advanced technology. With a focus on achieving self-reliance through the Atmanirbhar Bharat initiative, there is a pressing need to invest in indigenous defence manufacturing, research, and development. Modernising the three services — Army, Navy, and Air Force — is essential to maintain operational readiness and technological superiority.
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