Union Budget 2026: Defence gets highest allocation of Rs 7.85 lakh crore

The Union Budget of India has made the highest allocation of Rs 7.85 lakh crore to the Ministry of Defence (MoD) for the Financial Year (FY) 2026-27, accounting for 14.68% of the total Budget. This allocation to the Defence Ministry marks a huge hike from the Rs 6.81 lakh crore defence budget allocated to MoD in the Union Budget 2025-26.

Advertisement

This year, a provision of Rs 2.19 lakh crore has been made for the overall capital expenditure of the Armed Forces. A key highlight of this budget is the strong focus on the modernisation of all three services, which shows an increase of nearly 24 percent over the previous financial year. This significant boost will further enhance our military capabilities and strengthen the preparedness of the Defence Forces for the future.

Rs 1.80 lakh crore was allocated under the Capital Budget of Armed Forces for FY 2025-26. The Defence Services (Revenue) was allocated Rs 3,65,478.98 crore, reflecting a jump of 17.24 per cent. However,  the Defence budget (civil) has been reduced by 0.45 per cent this year as compared to last year’s Rs 28,554.61 crore.

The Ministry of Defence has hailed the Defence Budget 2026-27 as a decisive step toward a technologically advanced and self-reliant future. It posted on X: “Aligned with the vision of Viksit Bharat, Rs 7.85 lakh crore has been allocated to the Ministry of Defence, with a strong focus on modernisation, technological innovation, and streamlined procurement for optimal resource utilisation.”

Notably, in civil and defence aviation, the Finance Minister has announced exemptions from basic customs duty on components and parts required for the manufacture of civilian training and other aircraft. It also proposed duty exemption on raw materials imported for manufacturing aircraft parts used in maintenance, repair and overhaul by defence sector units.

The Union FM Nirmala Sitharaman said, “It is proposed to exempt basic customs duty on raw materials imported for the manufacture of parts of aircraft to be used in maintenance, repair or overhaul requirements by units in the defence sector.”

There are several projects of the Defence Ministry still in the pipeline, including the contracts for the Rafale fighter jets, submarines, and unmanned aerial vehicles.

The Union Defence Minister Rajnath Singh was also present in the Lok Sabha during the Union Budget 2026-27 speech delivered by Nirmala Sitharaman. He stated that this budget lives up to the sentiments and expectations of the people.

#WATCH | Delhi: On Union Budget, Defence Minister Rajnath Singh says, “… This budget lives up to the sentiments and expectations of the people. Furthermore, this budget provides a strong foundation for PM Modi’s vision of a self-reliant India and a developed India by 2047, with… pic.twitter.com/H9U53XNMs3

— ANI (@ANI) February 1, 2026

Rajnath Singh added, “Furthermore, this budget provides a strong foundation for PM Modi’s vision of a self-reliant India and a developed India by 2047, with adequate provisions made for the upliftment of all sections of society. This budget allocates Rs 7.85 lakh crore for the defence sector… This budget, following the historic success of Operation Sindoor, has reinforced our resolve to further strengthen the country’s defence system…. This year, a provision of Rs 2.19 lakh crore has been made for the overall capital expenditure of our armed forces, and the key focus of this budget is the modernisation of our three armed forces. For this, a provision of Rs 1.85 lakh crore has been made… In short, this budget strengthens the balance between security, development, and self-reliance…”