India’s Ministry of Defense has announced a 10% increase in its defense budget for fiscal 2026 which begins April 1, reaching a record $78.3 billion amid security challenges from Pakistan and China. The budget breakdown reveals that 26.4% ($20.7 billion) is allocated for new acquisitions.
Major planned purchases include (General Atomics) MQ-9B drones, carrier-borne fighter aircraft, and next-generation submarines and warships.
The budget includes a 12.4% increase in defense research and development funding, reaching $3.2 billion, aimed at strengthening the Defense Research and Development Organization‘s (DRDO) capabilities through research and public-private partnerships.
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While analysts note the clear prioritization of domestic industrial development, experts highlight the challenge of balancing urgent foreign procurement needs with long-term goals of enhancing indigenous defense capabilities.
India’s Defense exports have also seen significant growth, reaching $232 million in FY 2024, a 32.5% increase from the previous year. The United States, France, and Armenia are the top export destinations. The Ministry has set an ambitious export target of $6 billion by 2029.
Last updated: December 26th, 2025
