Defense Budget: Strengthening Autonomy & Advancing Self-Reliance

Achieving Self-Reliance in Defense amid Budget Constraints and Emerging Security Threats. As of February 2, 2025, India has allocated Rs 6.81 lakh crore for its defense budget for the fiscal year 2025-26, reflecting a 9.5% increase over the previous year's initial estimates.

- DR. NISHAKANT OJHA

This expenditure accounts for around 1.9% of the projected GDP for 2025-26. "India strategically balances fiscal discipline and defense priorities, maintaining a robust security framework with a defense budget close to 2% of GDP."

Declining Defense Spend and Shift to Self-Reliance India's defense expenditure, which once consistently hovered around 2.3% of GDP, has seen a gradual decline in recent years. Between 2021-22 and 2024-25, this figure reduced to 2.1%, and for the first time in over a decade, it dropped below 2% in 2024-25. With the total allocation standing at Rs 6.2 lakh crore, concerns have emerged regarding military preparedness and regional security.

Despite this, the government is actively pushing for self-sufficiency in defense manufacturing. By FY29, it aims to increase domestic production to Rs 3 lakh crore while expanding exports to Rs 50,000 crore. However, India still faces critical last-mile dependencies in key defense technologies, advanced weapon systems, and supply chain resilience. Addressing these gaps is crucial to achieving long-term strategic autonomy.

Balancing Fiscal Constraints and Strategic Autonomy India's defense sector is undergoing a transformation, balancing fiscal prudence with the need for military modernization and self-reliance. While the defense budget has grown in absolute terms, its share of GDP has fallen below 2% for the first time in over a decade, standing at Rs 6.2 lakh crore in 2024-25. This reduction raises concerns about military preparedness and regional security challenges.