ENA Sectors 2025-07-07 15:53:42 <p><span style="font-size:14px"><strong>New Delhi, Jul 7 (KNN)</strong> India is set to ramp up its defence expenditure significantly, with plans to sign contracts worth Rs 2 lakh crore in the financial year 2025-26. </span></p> <p><span style="font-size:14px">Defence Secretary Giridhar Aramane confirmed that the government is aiming to gradually raise the defence budget to around 2.5% of GDP over the next five years, from the current level of approximately 1.9%.</span></p> <p><span style="font-size:14px">The Ministry of Defence is working closely with the Finance Ministry and the 16th Finance Commission to secure additional funding. </span></p> <p><span style="font-size:14px">Aramane stated that depending on project execution speeds and industry readiness, the ministry may seek extra allocations during the revised budget stage of FY26.</span></p> <p><span style="font-size:14px">One of the key focus areas in FY26 will be the Advanced Medium Combat Aircraft (AMCA) programme, Indias 5th-generation fighter jet project. </span></p> <p><span style="font-size:14px">A contract for the indigenous aircraft is expected to be signed within the next three to six months. </span></p> <p><span style="font-size:14px">While flight testing of the AMCA is expected to take nearly a decade, the government is also exploring foreign options to temporarily fill the capability gap.</span></p> <p><span style="font-size:14px">The government has already approved the procurement of three Apache helicopters from the US and several Make-in-India defence projects are in the pipeline. </span></p> <p><span style="font-size:14px">A recent Jefferies report highlighted a 328% year-on-year increase in Indias defence capital expenditure in May 2025, following the successful Operation Sindoor. The report also estimates a robust 14% CAGR in Indias defence spending till FY2030.</span></p> <p><span style="font-size:14px">This push for higher spending comes alongside Indias growing focus on indigenous manufacturing and export of defence equipment. </span></p> <p><span style="font-size:14px">The country currently exports to over 90 nations and aims to boost annual defence exports to Rs 50,000 crore by FY26 and Rs 3 lakh crore by FY29, reflecting its ambition to become a major global defence supplier.</span></p> <p><span style="font-size:14px"><em><strong>(KNN Bureau)</strong></em></span></p> 42718 https://knnindia.co.in/news/newsdetails/sectors/india-eyes-rs-2-lakh-crore-in-defence-contracts-for-fy26 2025-07-07 15:53:42 knnindia.co.in