BUDGET 2026: On Sunday, February 1, the government set aside ₹7.85 lakh crore for defence in the Union Budget 2026. That’s up from ₹6.81 lakh crore last year, so it’s clear they’re sticking with their plan to boost military strength, upgrade equipment, and look after personnel.
Budget 2026: Defence Gets ₹7.85 Lakh Crore as Govt Pushes Military Modernisation
The Budget papers show this money covers everything under the Ministry of Defence for FY27, salaries, maintenance, new equipment, pensions, and the ministry’s civil offices.
Last year’s ₹6.81 lakh crore made defence one of the government’s biggest expenses. Out of that, ₹3.12 lakh crore went just to defence services (revenue) like salaries, allowances, day-to-day upkeep, and keeping the forces ready for action.
Defence spending still sits at the heart of the government’s investment plans. Officials keep saying that putting big money into defence doesn’t just help the military, it also backs up local manufacturing, gives the country more independence, and keeps the forces prepared in the long run.
Defence Ministry allocated a budget of Rs 7.8 lakh crore for the year 2026-27. Defence forces to get Rs 2.19 lakh crore for modernisation.
The Defence Ministry has major projects in the pipeline, like the contracts for Rafale fighter jets, submarines and unmanned aerial… pic.twitter.com/dT5pn1cpsr
— ANI (@ANI) February 1, 2026
How Budget 2026’s ₹7.85 Lakh Crore Defence Outlay Will Be Spent
They’ve made it pretty clear: more and more of this capital outlay is headed to domestic industry. It matches their push for self-reliance in defence production.
Finance Minister Nirmala Sitharaman just gave the defence sector a leg up. She announced that raw materials brought in to make aircraft parts, specifically for maintenance and repairs in the defence sector, won’t face basic customs duty anymore.
She also responded to the recent US tariffs by cutting the tariff rate on personal imports. Now, instead of paying 20 percent, you’ll pay just 10 percent on any dutiable goods you bring in for personal use.
Trying to help exporters, especially in the struggling seafood industry, Sitharaman said she plans to raise the duty-free import limit for certain inputs used in seafood processing.
The cap will go up from one percent to three percent of last year’s export turnover. That’s not all. She wants to extend duty-free imports for specific materials, which exporters currently get for leather and synthetic footwear, to include shoe uppers, too.
On top of that, she proposed a customs duty exemption for capital goods needed to make lithium-ion cell batteries and critical minerals.
This marks the ninth time Sitharaman has presented the Union Budget.
(With Inputs From ANI)
