DEFENCE BUDGET: STRENGTHENING AUTONOMY & ADVANCING SELF-RELIANCE

Achieving Self-Reliance in Defence amid Budget Constraints and Emerging Security Threats.

- DR. NISHAKANT OJHA

As of February 2, 2025, India has allocated Rs 6.81 lakh crore for its Defence budget for the fiscal year 2025-26, reflecting a 9.5% increase over the previous year's initial estimates. This expenditure accounts for around 1.9% of the projected GDP for 2025-26. "India strategically balances fiscal discipline and Defence priorities, maintaining a robust security framework with a Defence budget close to 2% of GDP."

DECLINING DEFENCE SPEND AND SHIFT TO SELF-RELIANCE

India's Defence 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 Defence 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 Defence 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 Defence sector is undergoing a transformation, balancing fiscal prudence with the need for military modernization and self-reliance. While the Defence 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.