Defence Ministry to seek 20% rise in allocation in upcoming budget: Report

The Indian Defence Ministry is reportedly preparing for a substantial financial push in the defence budget for the financial year 2026-2027 to fulfil the modernisation plans and inventory requirements of the armed forces amid an evolving geopolitical environment and heightened tensions with neighbours. This is in line with New Delhi's plan to increase defence expenditure to 2.5% of the Gross Domestic Product (GDP).

“We are in a particularly difficult neighbourhood in many ways. So yes, we will be asking for a bit more than the normal 10% increase that we get, probably something closer to the 20% mark. My view is that we will have to keep it to the 20% level for the next few years. That will be sufficient to meet all of our capability [development] plans,” said Defence Secretary Rajesh Kumar Singh at a Federation of Indian Chambers of Commerce and Industry (FICCI) event, as quoted by Hindustan Times.

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India ranks fourth in terms of military spending behind the United States, China and Russia. In the Union Budget for the financial year 2025-2026, New Delhi allocated over $82 billion, with $20 billion specifically for military modernisation. This marks an increase of roughly 9 per cent compared to the $70 billion allotted in FY 2014-25.

The Ministry also announced on Friday (Nov 28) that it has signed Letters of Offer and Acceptance (LOAs) with the United States Government for a five-year sustainment support package for the Indian Navy's MH-60R multi-role helicopters, valued at approximately $894 million.

The sustainment package includes spares, support equipment, product support, training, technical assistance, repair and replenishment of components, and the establishment of intermediate-level repair and maintenance inspection facilities within India.

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"Sustainment Support is a comprehensive package which includes provisioning of spares, support equipment, product support, training and technical support, repair & replenishment of components and setting up of 'Intermediate' level component repairs & Periodic Maintenance Inspection facilities in India," according to a release issued by the Ministry of Defence.