Defense Budget 2025: It is believed that the foreign policy of any country is as strong as its defense system. A country which has strong military and security capabilities can present its interests on the international stage without any pressure. This is the reason why today almost all the big countries of the world are spending heavily on their defense budget.

America has proposed to increase its defense budget to $ 1.5 trillion for the year 2027, which is about 50 percent more than earlier estimates. At the same time, India’s neighbor China is also continuously increasing its military expenditure. In the financial year 2025-26, China spent about $ 245 billion on defense budget.

India’s defense expenditure: position against GDP

If we look at the trend of India’s defense expenditure in the last 15 years, there is a continuous decline in its ratio to GDP. Defense expenditure in 2010-11 was 2.71% of GDP.

In 2015-16 it was 2.41%

2.88% in 2020-21

2.21% in 2022-23

1.97% in 2023-24

1.89% in 2024-25

It will reduce to around 1.90% in 2025-26. These figures clearly indicate that despite increasing global tensions, India’s defense expenditure is becoming limited in proportion to GDP.

financial year	What share of GDP is spent on the budget in percentage?
2015-16	2.41
2020-21	2.88
2022-23	2.21
2023-24	1.97
2024-25	1.89

Rising global tensions and India’s strategy

Today the global situation is extremely unstable. The wars in Iran, Venezuela, Ukraine and the ongoing tension in the Middle East have deepened the security challenges. In such a situation, the question arises that what strategy should India adopt regarding defense expenditure in Budget 2026? Manish Kumar Gupta, expert in economic matters It is said that now investment in defense sector is not limited to just GDP, employment or trade. This has directly become a measure of India’s strategic power and global influence.

When India exports defense equipment, it not only sells arms, but also establishes itself among the powerful countries of the world. The issue of a strong defense exporting country is heard more seriously in international forums.

Defense sector and economic development

According to Manish Gupta, the confidence expressed by IMF and World Bank regarding India’s growth rate is also largely related to the defense sector. Defense is a high-value manufacturing sector, which integrates technology, MSME and skill development. This reduces imports, increases exports and has a positive impact on the current account balance. At present, the contribution of defense sector in GDP is about 2 percent, which can be taken to 2.5 percent with right policies.

Necessary reforms and challenges

However, some tough decisions are necessary for this.

Transparency in defense procurement process

Control on the problem of ‘lobbying’ and repeated cancellations in the tender system

Share of indigenous products up to 75 percent in army procurement

Cheap loans to MSMEs and guarantee of timely payment

Without these reforms, the idea of ​​a self-reliant defense industry will remain incomplete.

The nature of war has changed

Manish Gupta says that today’s fight is more about data, artificial intelligence and cyber technology than cannon balls. Therefore, special emphasis should be given to AI, cyber security and cutting-edge technology in Budget 2026.

Although defense exports have increased manifold and the target is to reach Rs 50 thousand crore, there is still a huge gap between announcements and ground implementation.

Focus on Air Force and basic industry necessary

There itself Defense expert and retired wing commander Prafulla Bakshi Believes that India will have to pay maximum attention to the Air Force, because the role of Air Force is most important in deciding the beginning and direction of modern war. According to him, it is very important to increase investment on research and development.

Prafulla Bakshi also says that India’s biggest weakness is its basic industrial capacity. Unless the national industry is strong, the defense industry also cannot be strong.

Today India is not able to make many important things like metal-grade engines itself. If we depend on other countries for weapons during war, we will not be able to fight for a long time. Therefore, it is essential to strengthen indigenous industry and manufacturing for long-term security.

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Defense Budget 2026-27: The eyes of the entire country are currently fixed on the Union Budget to be presented on 1 February. However, considering the current global situation, the defense sector has emerged as a big challenge for India, which is moving towards becoming the world’s third largest economy. Today almost every country is increasing its defense budget drastically.

US President Donald Trump has announced a defense budget of 1.5 trillion dollars (about Rs 13.48 lakh crore) for the year 2027, which is more than the total GDP of many countries. This represents an increase of approximately $500 billion in America’s defense spending. This increase is more than the combined defense budget of India, China, Japan, South Korea and Australia (estimated at $473 billion in 2026).

Defense budget of major countries in 2025-26

During the financial year 2025-26, China made a big increase in its defense budget to $ 245 billion. Whereas India’s defense budget was 81 billion dollars (about Rs 6.81 lakh crore). During the same period, Japan’s defense budget was $58 billion, Australia’s was $44 billion and South Korea’s was $45 billion.

In view of global geopolitical tensions and China’s increasing military expenditure, India’s defense budget is also expected to increase in the upcoming budget.

Defense budget increased two and a half times in last 10 years

In the last decade, India’s defense budget has registered an increase of about two and a half times. The government had allocated a defense budget of Rs 6.6 lakh crore for the financial year 2025-26, of which Rs 1.8 lakh crore was earmarked for the modernization of the army. This was about 1.9 percent of the country’s GDP, which was about 9.5 percent more than last year.

financial year	lakh crore (in rupees)	What is the % increase in GDP?
2025-26	6.81	1.9
2024-25	6.21	1.89
2023-24	5.93	1.97
2022-23	5.25	2.21
2021-22	4.78	2.66
2020-21	4.71	2.88
2019-20	4.31	2.52
2018-19	4.04	2.42
2017-18	3.59	2.51

If we look at the figures of past years:

• 2024-25: Rs 6.21 lakh crore
• 2023-24: Rs 5.93 lakh crore
• 2022-23: Rs 5.25 lakh crore
• 2021-22: Rs 4.78 lakh crore
• 2020-21: Rs 4.71 lakh crore
• 2019-20: Rs 4.31 lakh crore
• 2018-19: Rs 4.04 lakh crore
• 2017-18: Rs 3.59 lakh crore

Expert opinion: Emphasis on defense self-reliance is necessary

Defense expert and retired Wing Commander Prafulla Bakshi says that while discussing the defense budget, the security of the country is paramount. He said that India is currently surrounded by challenges from all sides, which include the China-Pakistan alliance, the situation in Bangladesh and the increasing tension in the South China Sea.

He further said that the situation in areas like America, Iran and Venezuela is also becoming serious, due to which India’s defense needs will increase further. In such a situation, self-reliance in defense production under ‘Make in India’ is very important.

According to Bakshi, for modern war, indigenous production of sophisticated weapons like tanks, fighter aircraft, engines, missiles and ammunition is necessary. Along with this, there is a need to increase expenditure on defense research and development (R&D). He suggested that India should seriously consider increasing defense spending to 3.5 to 5 percent of GDP, as many developed countries are doing.

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