KEY POINTS
- India’s defence sector has seen a transformative decade from 2014 to 2025
- This follows consistent growth from ₹4.04 lakh crore in FY 2018–19
- India also made strides in missile systems
In the latest, following Operation Sindoor Government of India announced an additional ₹50,000 crore for the defence budget for FY 2025-26 on May 16, 2025. This brings the total defence budget to over ₹7.31 lakh crore and the approval for this extra funding will be sought during the Winter Session of Parliament. These additional funds will be used to boost defence research and development, as well as the procurement of new weapons and equipment.
The respective reports provides a comprehensive overview of India’s defence sector between 2014 and 2025. The first section examines key instances of defence budget allocations while the second section highlights significant milestones, such as developments in Tejas fighter jets and the INS Arihant submarine, which reflect India’s growing strategic capabilities and technological advancements.
1. A Decade of Defence: Tracking India’s Budget Power from 2014 to 2025
Operation Sindoor Boosts Defence Budget to ₹7.31 Lakh Crore
The Government of India is considering an additional allocation of ₹50,000 crore to the defence budget following Operation Sindoor through a supplementary budget. These additional funds are expected to strengthen critical areas such as defence research and development, and the procurement of weapons, ammunition, and essential military equipment. Earlier, in the Union Budget presented on February 1, 2025, Finance Minister Nirmala Sitharaman had already allocated a record ₹6.81 lakh crore for the armed forces.
India Sets Record with ₹6.81 Lakh Crore Defence Budget for FY 2025-26
The Ministry of Defence (MoD) was allocated a record ₹6,81,210.27 crore (approximately US$78.7 billion) in the interim Union Budget for FY 2025-26, reflecting a 9.53% increase over the previous year’s allocation of ₹6,21,940.85 crore. This significant rise underscores India’s continued commitment to military modernization and self-reliance under the Aatmanirbhar Bharat initiative.
Key highlights of the allocation include:
The defence budget represents 1.9% of India’s projected GDP for FY 2025–26. A substantial ₹1,11,000 crore, or 75% of the modernization outlay, has been earmarked for domestic procurement, boosting indigenous production of fighter jets, submarines, drones, and helicopters under the Make in India program. ₹3,11,732 crore (46%) has been allocated for operational expenditures, including salaries, maintenance, and logistics.
₹1,60,795 crore (24%) is dedicated to pensions and support for ex-servicemen, marking a 13.87% increase from the previous year’s ₹1,41,205 crore, partly aimed at offsetting inflationary pressures.
Defence Gets Boost: ₹6.22 Lakh Crore Allocated in FY 2024-25 Budget
The Ministry of Defence (MoD) was allocated ₹6,21,940.85 crore (approximately US$74.3 billion), the highest among all ministries in the Regular Union Budget for FY 2024-25. This amount represents 12.9% of the total Union Budget and marks a 4.79% increase over the previous year’s allocation of ₹5,93,537 crore. A significant portion of this budget focuses on strengthening self-reliance in defence under the Aatmanirbhar Bharat initiative.
₹1,05,518.43 crore—75% of the modernization budget has been earmarked for procurement from Indian industries, reinforcing the Make in India programme. to support domestic defence manufacturing. In addition, the government has allocated ₹23,855 crore to the Defence Research and Development Organisation (DRDO), reflecting a rise from the previous year’s ₹23,263.89 crore. ₹400 crore has been set aside for the ADITI scheme (Acing Development of Innovative Technologies with iDEX) to further boost innovation aimed at encouraging startups, MSMEs, and innovators in the development of advanced defence technologies.
Defence Secures ₹5.94 Lakh Crore in Union Budget 2023–24
Finance Minister Nirmala Sitharaman made a significant boost to the defence budget in the Union Budget for 2023-24 increasing the allocation for combat and equipment needs from ₹62,431 crore in the 2022-23 budget estimate to ₹90,000 crore in 2023-24, marking a substantial 44% rise. The total allocation for the Ministry of Defence stood at ₹5,93,537.64 crore, representing 13.18% of the overall budget outlay of ₹45.03 lakh crore. This includes ₹1,38,205 crore earmarked for defence pensions. The defence budget increased by ₹68,371.49 crore (13%) compared to the previous year reflecting a continued strong emphasis on military modernization and infrastructure development.
₹6.44 Lakh Crore Defence Allocation Drives Modernization Push
Finance Minister Nirmala Sitharaman allocated ₹5.25 lakh crore for defence excluding pensions, from a total budget of ₹39.45 lakh crore in the Union Budget for 2022-23. An additional ₹1.19 lakh crore was designated for defence pensions, bringing the overall defence allocation to ₹6.44 lakh crore. This represents an increase of ₹46,970 crore, or 9.82%, compared to the previous year’s budget. The total defence allocation accounted for 13.31% of the central government’s total expenditure. Within the defence budget, ₹3.11 lakh crore was earmarked for revenue expenditure, while ₹1.52 lakh crore was allocated for capital expenditure, which includes critical funding for modernization efforts.
Defence Gets ₹4.78 Lakh Crore Boost in Union Budget 2021–22
Finance Minister Nirmala Sitharaman allocated ₹3,62,345.62 crore for defence (excluding pensions) in the Union Budget for 2021-22 from the central government’s total expenditure of ₹34.83 lakh crore. An additional ₹1,15,850 crore was earmarked for defence pensions, bringing the total defence allocation to ₹4,78,195.62 crore, an increase of ₹6,817 crore over the previous year. This allocation accounted for 13.73% of the government’s total expenditure. Within the defence budget, ₹2,29,000 crore was set aside for revenue expenditure, while ₹1,35,061 crore was allocated for capital expenditure, supporting the modernization of the armed forces and the acquisition of new weapons and systems.
Union Budget 2020–21: ₹4.71 Lakh Crore Earmarked for Defence
Finance Minister Nirmala Sitharaman allocated ₹4,71,378 crore (approximately US$66.9 billion) to the Ministry of Defence (MoD), marking a 9.37% increase equivalent to ₹40,367.21 crore over the previous year’s allocation of ₹4,31,010.79 crore. This allocation accounted for 15.49% of the central government’s total expenditure. ₹2,18,998 crore was designated for revenue expenditure of the total defence budget, while ₹1,18,555 crore was allocated for capital expenditure aimed at military modernization.
Defence Gets ₹4.31 Lakh Crore in Union Budget 2019–20
The Ministry of Defence (MoD) was allocated ₹4,31,010.79 crore (approximately US$61.7 billion) in the interim Union Budget for 2019-20. Around 70.8% of the total was designated for the operational requirements of the Army, Navy, Air Force, and the Defence Research and Development Organisation (DRDO). Additionally, ₹1,12,079.57 crore was earmarked for defence pensions, reflecting a 6.3% increase over the previous year’s ₹1,05,463 crore, largely driven by the implementation of the One Rank One Pension (OROP) scheme. The budget also supported major defence acquisitions, including the procurement of 36 Rafale fighter jets under a ₹59,000 crore deal with France, the S-400 air defence systems under a ₹40,000 crore agreement with Russia, and the induction of advanced artillery systems such as the M777 ultra-light howitzers and K-9 Vajra guns.
Defence Gets ₹4.04 Lakh Crore Boost in Union Budget 2018–19
Finance Minister Arun Jaitley allocated ₹4,04,365 crore (approximately US$62.8 billion) to the Ministry of Defence, marking a 5.66% increase over the previous year. Around 73.1% of the total was allocated to Defence Services (excluding pensions), covering the operational needs of the Army, Navy, Air Force, and the Defence Research and Development Organisation (DRDO). An additional ₹11,803 crore, accounting for 2.9% of the total, was assigned to the Ministry of Defence (Civil) for administrative functions, including the Coast Guard and Border Roads Organisation (BRO).
2. India’s Defence Triumphs: A Decade of Progress from 2014 to 2025
INS Surat, INS Nilgiri, and INS Vagsheer Join Indian Navy:
The Indian Navy marked a historic milestone by commissioning three frontline vessels—INS Surat, INS Nilgiri, and INS Vagsheer simultaneously on January 15, 2025. These powerful warships underscore India’s commitment to building a self-reliant and modern naval force. INS Surat is a stealth-guided missile destroyer renowned for its speed and advanced technology. Measuring 164 meters in length and displacing 7,400 tonnes, it boasts a robust design capable of operating a wide range of helicopters, including the Chetak, ALH, Sea King, and MH-60R.
INS Nilgiri is a state-of-the-art frigate designed to counter multiple threats simultaneously, making it a highly versatile asset. It is also an indigenously built frontline warship, reflecting India’s growing defense manufacturing capabilities. INS Vagsheer is a Scorpène-class diesel-electric submarine, optimized for underwater warfare and stealth operations. It is the sixth and final submarine of the Scorpène series commissioned under the Kalvari-class Project 75, enhancing India’s underwater defense strength.
Made in India: Indian Army Inducts First Indigenous ‘Asmi’ Machine Pistols
As part of the ‘Atmanirbharta’ (self-reliance) initiative on November 5, 2024, the Indian Army inducted 550 units of the indigenously developed ‘Asmi’ machine pistols into its Northern Command. This milestone marks a significant step forward in India’s defence manufacturing, showcasing the country’s growing self-sufficiency in critical defence technology. The ‘Asmi’ machine pistol, a 100% Make in India weapon, was developed by Colonel Prasad Bansod of the Indian Army in collaboration with the Defence Research and Development Organisation (DRDO).
Indian Army Unveils Hexacopter Drone Armed with Machine Gun
The Indian Army unveiled an innovative hexacopter drone on May 16, 2024 capable of being equipped with a machine gun to enhance combat support operations. Named the Sirin Hexadrone, this advanced platform was showcased during an integrated small arms firing event for the Army’s Western Command. With a payload capacity of 1 kilogram (2.2 pounds), the hexacopter can carry a versatile range of armaments from small arms to grenades and mortars making it adaptable to diverse combat scenarios.
Defence Manufacturing Boom: India Records ₹1.27 Lakh Crore in FY 2023-24
It was reported on March 29, 2024 that India’s defence production, largely driven by the Make in India initiative, reached ₹1.27 lakh crore in FY 2023-24. Notably, 21 % of this output is contributed by the private sector, significantly advancing the country’s journey towards self-reliance. Currently, India boasts 16 Defence Public Sector Units (DPSUs), over 430 licensed defence companies, and approximately 16,000 Micro, Small, and Medium Enterprises (MSMEs), all playing vital roles in strengthening the nation’s defence manufacturing ecosystem.
India’s First Private Military Aircraft Assembly Line Takes Off
Located in Vadodara, Gujarat, India’s first private-sector Final Assembly Line (FAL) has been inaugurated for military aircraft marking a significant milestone in the nation’s journey toward defence self-reliance. This facility underscores India’s growing capability to manufacture advanced military hardware domestically. In 2021, the Ministry of Defence signed a ₹21,935-crore agreement with Airbus Defence and Space SA, Spain, for the supply of 56 C-295 transport aircraft, aimed at replacing the Indian Air Force’s aging Avro-748 fleet.
Indian Army Unveils ‘Agniastra’ Multi-Target Detonation Device
The Indian Army Chief recently launched “Agniastra,” a portable multi-target detonation device with potential for use in room interventions, remote bunker or hideout destruction, and reserve demolitions. Developed by the Indian Army’s Corps of Engineers, this device represents a significant advancement in both conventional warfare and counter-terrorism operations, enhancing the Army’s tactical capabilities on multiple fronts.
Indian Army Major Develops World’s First AK-47 Bulletproof Helmet
An Indian Army Major, who previously developed a bulletproof jacket capable of protecting against sniper bullets, unveiled a groundbreaking helmet on August 6, 2024 claimed to be the first in the world to stop an AK-47 bullet fired from a distance of 10 meters. This innovation marks a significant advancement in personal protective gear for soldiers. Notably, in 2016, the Indian Army procured 50,000 bulletproof jackets through the Revenue route, 1,86,138 jackets via the Capital route, and 1,58,279 ballistic helmets through the Capital route, underscoring its ongoing commitment to soldier safety.
Goa Shipyard Launches India’s First Indigenous Frigate Triput
Goa Shipyard Ltd (GSL) achieved a significant milestone with the successful launch of the first indigenous P1135.6 frigate on July 23, 2024. This vessel is the first of two frigates of the P1135.6 class being constructed at GSL, marking the first time these advanced ships are built entirely in India. Measuring 124 meters in length and 15.5 meters in width, the frigate is powered by four gas turbines and is designed to reach a top speed of 28 knots, with a displacement of approximately 3,200 tonnes.
India’s New Light Tank for High-Altitude Dominance
On July 8, 2024, The Defence Research and Development Organisation (DRDO) and Larsen & Toubro (L&T), in collaboration with several Micro, Small, and Medium Enterprises (MSMEs), unveiled the Zorawar light tank on July 8, 2024. Developed in response to the 2020 standoff with China in Eastern Ladakh, Zorawar addresses the urgent need for a lightweight, agile combat vehicle capable of operating in challenging terrains. Weighing under 25 tonnes, the tank is designed for rapid air transport, high-angle firing, and limited artillery functions, significantly boosting tactical and operational flexibility in mountainous regions.
Nagastra-1 Takes Flight: Indian Army Receives First Indigenous Loitering Munition
Solar Industries, headquartered in Nagpur, delivered the first indigenously developed loitering munition, Nagastra-1 on June 14, 2024 to the Indian Army, marking a significant advancement in India’s defence capabilities. Designed as a UAV-based system, Nagastra-1 operates as an aerial ambush platform, capable of hovering over targets before striking. Nagastra-1 reflects India’s growing emphasis on indigenous innovation and precision warfare technology.
Rudram-II Soars: India Successfully Tests Anti-Radiation Missile from Su-30MKI
India successfully test-fired the Rudram-II, an advanced air-to-surface anti-radiation missile, from a Su-30MKI fighter jet on May 29, 2024. Developed by the Defence Research and Development Organisation (DRDO), the Rudram-II is a supersonic missile designed to neutralize enemy ground-based radars, surveillance systems, and communication stations. It plays a critical role in Suppression of Enemy Air Defence (SEAD) missions, enhancing the Indian Air Force’s precision strike capabilities. This follows the development of Rudram-I, India’s first indigenous anti-radiation missile, also engineered by DRDO to disable hostile radar and radio frequency-emitting targets, marking a significant step forward in India’s defence self-reliance and electronic warfare capabilities.
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