BUDGET HIGHLIGHTS OF 2026-27: DEFENCE

The Union Budget 2026–27: Highest-ever allocation of Rs 7.85 lakh crore to the defence sectorà India’s strategic focus on military modernisation, indigenous manufacturing and veterans’ welfare.

Modernisation

• Emphasis on defence modernisationà capital allocation to the Defence Forces crossing Rs 2.19 lakh crore.
• Capital acquisition: Induction of next-generation aircraft, advanced weapons, naval platforms, submarines and unmanned systems.
• Funding for the Border Roads Organisation
• Optical fibre–based defence communication networks: Technology-driven military.

Indigenous Defence Manufacturing

• Aatmanirbhar Bharat in defence: Prioritising indigenous manufacturing and reducing import dependence.
• Rs 1.39 lakh crore: Procurement from domestic defence industries, with about three-fourths of the capital acquisition budget reserved for Indian manufacturers.
• Customs duty exemptions on imported raw materials for aircraft maintenance, repair etc
• Raising the allocation to the Defence Research and Development Organisation by about 8.5% over the previous year.
• The Ex-Servicemen Contributory Health Scheme (ECHS) has received Rs 12,100 crore, reflecting a 45.49% increase over the previous year
• Defence pension allocation has increased by 6.56%: System for Pension Administration Raksha (SPARSH)