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Defense allocation rises to ₹7.85L crore in Budget 2026
01 Feb 2026

The Indian government has allocated ₹7.85 lakh crore to the defense sector in the Union Budget 2026. This is a significant increase from last year's allocation of ₹6.81 lakh crore for FY26.

The move highlights the government's continued focus on military readiness, modernization, and personnel welfare.

The total allocation for the Ministry of Defense in FY26 includes defense services (revenue), capital outlay, pensions, and civil establishments under it.

Last year's defense allocation
Allocation details

In the last budget, the government had allocated ₹6.81 lakh crore to defense, making it one of the largest components of overall government expenditure.

Out of this FY26 allocation, defense services (revenue)—which includes expenses on salaries, allowances, maintenance and operational preparedness—accounted for ₹3.12 lakh crore.

Push for domestic manufacturing
Investment focus

Defense spending is a key part of the government's broader public investment strategy.

Officials have often stressed that capital-intensive defense spending boosts domestic manufacturing, enhances strategic autonomy, and improves long-term preparedness.

The government has also said that an increasing share of defense capital outlay will be directed toward domestic industry, in line with its self-reliance push in defense production.