16000 MSME Suppliers To Benefit From 9.5% Defence Budget Hike In 2025-26

New Delhi, Feb 18 (KNN) In a major boost to India's defence sector, Defence Secretary Rajesh Kumar Singh announced that the defence budget for the upcoming financial year 2025-26 will witness a 9.5 per cent increase, rising from the current Rs 6.21 trillion to Rs 6.81 trillion.

The increase aligns with India’s ongoing efforts to modernise its military capabilities and strengthen domestic defence manufacturing.

Singh emphasised that India plans to invest USD 30 billion annually in defence modernisation over the next decade. Notably, 75 per cent of the capital expenditure (capex) budget will be allocated for procurement from domestic sources, with 25 per cent dedicated to private domestic industry.

This move is aimed at bolstering indigenous defence production and reducing reliance on imports.

“The total value of domestic production in India has reached Rs 1.27 trillion in 2023-24, while exports have surged to Rs 21,000 crore—a 30-fold increase over the past decade,” Singh highlighted.

He credited the growth to policy reforms, including relaxation in Foreign Direct Investment (FDI) regulations and streamlined industrial licensing procedures.

India's defence industrial ecosystem has expanded significantly, with 16 defence Public Sector Undertakings (PSUs), 430 licensed companies, and approximately 16,000 Micro, Small & Medium Enterprises (MSMEs) driving innovation and manufacturing.

Singh stressed the need to lower entry barriers for new players and emerging technologies to ensure India’s defence industry remains agile and adaptable to modern warfare demands.

On the international front, Singh addressed speculation regarding India’s potential acquisition of F-35 fighter jets from the United States. He clarified that while U.S. President Donald Trump has expressed interest in selling F-35s to India, no formal offer has been made yet.

“We will evaluate the offer once it materialises. India follows a structured procurement process, and any acquisitions will be guided by this framework,” Singh stated.

He further noted that India’s defence acquisition budget stands at Rs 1.80 trillion for the next financial year and Rs 1.60 trillion for the current year, ensuring robust investment in new military assets.

With defence sales between India and the U.S. poised to grow, Singh reaffirmed India’s commitment to strengthening its military capabilities while prioritising indigenous development and strategic partnerships.

(KNN Bureau)