Defence Sector Buzz: Record Capital Inflow and Budget 2026-27 Expectations
| Topic | Details / Insights |
|---|---|
| Record Capital Inflow | India’s defence technology sector recorded its highest-ever annual capital inflow in 2025 at $247 million (~₹2,270 crore), bringing cumulative funding to $711 million (~₹6,535 crore) (Tracxn). |
| Budget 2026-27 Expectations | Defence expected to be a priority sector, with analysts projecting 20–25% growth in capital outlay. |
| Experts Overview | Highlighted the need to drive indigenisation in high-tech areas such as UAVs and anti-drone systems. |
| Emphasized domestic procurement, long-term order visibility, and active participation of private sector players. |
Predictable Defence Spending and Smart Tech Investment Key in Budget 2026
Defence budgeting requires predictable funding because it serves as the primary factor that determines success. Samir Sheth of BDO India points out that consistent and predictable expenditure matters far more than flashy headline allocations—it allows domestic defence players to dream big, scale operations, and invest in cutting-edge technology without biting their nails every quarter.
EY India urges the government to increase capital expenditure for both defence and emerging fields, including AI, GenAI, space, robotics, and next-generation infrastructure. The report recommends keeping the fiscal deficit around 4% of GDP, protecting fiscal health while enabling growth targets to be achieved.
For investors and industry insiders, the next Budget establishes a fundamental basis for India’s defence and technology development, extending beyond mere numerical data to long-term strategic planning and sustainable industry growth.
(With Inputs From UPStox And Agency)
Also Read: Union Budget 2026 LIVE: PM Modi Reaches Parliament Ahead of FM Sitharaman’s…