On Saturday, India announced a defense budget of 6.81 trillion rupees (about $78.7 billion) for the 2025-26 fiscal year. This is a 9.5% increase from last year, but most of the money will go towards salaries and pensions, not new weapons.
The budget sets aside 4.7 trillion rupees for personnel costs, leaving only 1.80 trillion rupees for actual defense projects. Even though this capital allocation is 4.6% higher than the previous year, experts believe it should be even greater to modernize India’s military in light of its ongoing tensions with China.
Key investments within the budget include 486 billion rupees for aircraft and engines and 243.9 billion rupees for the naval fleet. These areas are critical for enhancing India’s defense capabilities.
Amit Cowshish, a former adviser at the Defense Ministry, highlighted a long-standing issue: “Salaries and pensions take up a huge part of the defense budget.” This has been a concern, as much of the funding does not go toward strengthening India’s military.
Despite the increase in spending, the slow pace of defense procurement remains a hurdle. Currently, India has yet to use 125 billion rupees from this year’s budget, illustrating the complex and lengthy nature of defense negotiations. Cowshish remarked, “Even if we allocate more to capital outlay, it’s hard to spend that amount quickly.”
India has over 1.47 million active military personnel and boasts the fourth largest defense budget in the world, behind the U.S., China, and Russia.
Laxman Behera, a defense expert at Jawaharlal Nehru University, noted that a small increase in capital expenditure won’t significantly speed up modernization. He suggested that while the government can adjust these figures later, new deals must already be prioritized.
Recently, U.S. President Joe Biden emphasized to Prime Minister Narendra Modi the importance of India purchasing more American military equipment. However, analysts are skeptical about any new agreements being finalized soon.
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