India presented its annual budget for the 2026 fiscal year on Sunday, allocating a total defence outlay of Rs7.85 trillion, representing an increase of nearly 15 per cent from last year’s Rs6.81 trillion.

The increase shows the government is placing fresh emphasis on strengthening military readiness and upgrading weapons after its setback in the brief conflict with Pakistan in May 2025.

A large share of the additional funds has been set aside for long-term defence investment, with capital spending rising by 28 per cent to Rs2.31 trillion, compared with Rs1.8 trillion last year.

The move signals a push to modernise military hardware and strengthen India’s domestic defence industry.

Presenting the budget, Finance Minister Nirmala Sitharaman said Rs2.19 trillion had been earmarked for military modernisation, marking a 21.84 per cent increase year-on-year.

Spending on routine military expenses — including fuel, ammunition, maintenance and personnel salaries — has also been raised by 17.24 per cent, while allocations for military pensions have been increased to Rs1.71 trillion.

Analysts said the increase was widely expected, noting that following Operation Sindoor, defence officials had sought a 20 per cent hike in the military budget.

In May last year, the Indian government had considered an additional Rs500 billion in defence spending, but the final allocation exceeded those expectations.

India’s defence budget last year stood at Rs6.81 trillion, which was 9.2 per cent higher than the 2024 allocation.