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 warfare, 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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