On February 1, 2026, the Union government announced a defence budget of ₹7,84,678 crore for the financial year 2026-27. This marks a 15% increase over last year’s allocation of ₹6.81 lakh crore. A strong focus is placed on capital expenditure, which has been set at ₹2,19,306 crore—over ₹39,000 crore more than the current year’s budget estimate of ₹1.80 lakh crore. These funds will go toward new weapons, aircraft, warships, and other military hardware. Defence Minister Rajnath Singh linked the budget increase to the "historic success of Operation Sindoor," saying it strengthens India’s defence. He said, "The most important aspect of this Budget is the modernisation of our three services." Singh expressed gratitude to Prime Minister Modi for the allocation and noted that the ₹1.85 lakh crore for modernisation is about 24% higher than last year. The budget also emphasizes care for ex-servicemen, with ₹12,100 crore set aside for the Ex-Servicemen Contributory Health Scheme, a 45% rise from the previous year. Finance Minister Nirmala Sitharaman announced customs duty exemptions on aircraft components and raw materials used in defence aerospace maintenance, expected to boost the sector. Revenue expenditure is ₹5,53,668 crore, including ₹1,71,338 crore for pensions. The total defence allocation equals roughly 2% of India’s projected GDP for 2026-27. The Ministry highlighted that the budget prioritizes modernisation, technology upgrades, and efficient procurement to strengthen the armed forces amid ongoing security concerns from China and Pakistan.