What happened?
The Union Budget of the Republic of India for 2025 was presented on 1 February 2025 by the Minister of Finance, Nirmala Sitharaman. The budgetary allocations for the Ministry of Defence (MoD) were made in line with the Government of India’s vision for ‘Viksit Bharat @ 2047,’ aiming for technologically advanced, self-reliant (‘Aatmanirbhar’) armed forces. The Union Budget has allocated ₹6,81,210.27 crore for FY 2025–26 for the MoD. This allocation is 9.53% higher than the budget estimate for FY 2024–25 and accounts for 13.45% of the Union Budget, the highest among all ministries. Under capital expenditure, ₹48,614 crore has been set aside for aircraft and aero engines, while ₹24,391 crore has been allocated for the naval fleet. An amount of ₹63,099 crore has been earmarked for other equipment.
Why it matters to India:
The defence budget aligns with the Ministry of Defence’s decision to observe FY 2025–26 as the ‘Year of Reforms,’ aiming to modernise India’s armed forces and simplify the Defence Procurement Procedure (DPP) to ensure the optimum utilisation of funds. A notable aspect of this budget is the enhanced investment in border security and maritime capabilities against growing challenges as neighbouring countries, particularly the People’s Republic of China, continue to advance their military capabilities, including enhancements in air power and naval fleets.