Union Budget 2026: Defence Ministry Gets Rs 7.8... ... Union Budget 2026 LIVE: Finance Minister Nirmala Sitharaman Ninth Budget Today All Updates

Union Budget 2026: Defence Ministry Gets Rs 7.8 Lakh Crore Allocation

The Centre has earmarked Rs 7.8 lakh crore for the defence ministry in the Union Budget for 2026–27. Of this, Rs 2.19 lakh crore has been allocated under the Capital Outlay for the modernisation of the armed forces.

Overall, the defence budget has been increased by 15 per cent. Capital outlay for FY 2026–27 has been raised by 21.84 per cent, from Rs 1.80 lakh crore in FY 2025–26 to Rs 2.19 lakh crore, reflecting a strong push towards capability enhancement.

Several major defence procurement projects are in the pipeline, including contracts for Rafale fighter jets, submarines and unmanned aerial vehicles.

The Defence (Civil) budget has been marginally reduced by 0.45 per cent compared to last year’s allocation of Rs 28,554.61 crore. Meanwhile, allocations for Defence Services (Revenue) and Capital Outlay stand at Rs 3,65,478.98 crore and Rs 2,19,306.47 crore, registering increases of 17.24 per cent and 21.84 per cent, respectively.

The allocation for Defence Pensions has also been enhanced to Rs 1,71,338.22 crore.

To further support the defence manufacturing ecosystem, Finance Minister Nirmala Sitharaman announced a proposal to exempt basic customs duty on raw materials imported for manufacturing aircraft components used in maintenance, repair and overhaul operations within the defence sector.

Separately, the Finance Minister also proposed lowering the customs tariff on all dutiable goods imported for personal use from 20 per cent to 10 per cent, in response to global tariff pressures.