New Delhi: The Budget 2026-27 continues the trend of increased defence allocation. The overall defence budget rose to around Rs 7.85 lakh crore, up from about Rs 6.81 lakh crore in the previous year. This is a nearly 15% increase in total allocation.
Capital expenditure specifically for defence has also been raised. The estimates have been put around Rs 2.31 lakh crore, compared with Rs 1.80 lakh crore last year. The focus is
on advanced weapon systems and domestic defence production capacity. Finance Minister Niramala Sitharaman, while presenting the Budget on Sunday (Feb 1), stated that basic customs duty on components and parts needed for manufacturing of aircrafts would be exempted.
“I propose to exempt basic customs duty on components and parts required for the manufacture of civilian, training and other aircrafts. It is proposed to exempt basic customs duty on raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul requirements by Units in the Defence sector,” she said.
In 2024, the Ministry of Defence recorded its highest-ever indigenous production of ₹1.26 lakh crore and defence exports of ₹21,083 crore, This underlines the sector’s ongoing shift towards self-reliance.