Defence Budget Increase in FY27: The defence sector may get a strong boost in the upcoming Union Budget. Sources say the government plans to increase defence spending and also change many rules to bring in more private companies. This is aimed to make India stronger in defence and reduce dependence on imports.
Sources say the Defence Ministry has already sent its plans for the Union Budget 2026-27. The ministry has asked for much higher spending than before. The defence budget for FY27 may rise by about 20-25%. The government wants to use this money for modern weapons, better capacity, and more Indian-made defence products.
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Big Changes Planned in Defence rules
#SourcesSay | Govt may raise defence budget by 20–25% in FY27, boost R&D, and allow private firms to bid alongside PSUs@priyadarshi108 #DefenceBudget #UnionBudget2026 #Defence pic.twitter.com/L9d71Z4ZTS
— ET NOW (@ETNOWlive) December 16, 2025
Along with more money, the government plans to change how defence manufacturing and buying works. Sources say the government may simplify defence acquisition rules. This step may reduce delays and make work faster. It may also encourage more private companies to enter the defence sector.
The Defence Ministry has also asked for much higher spending on defence research and development. Spending on defence R&D may increase to around Rs 35,000-40,000 crore. Right now, the amount stays near Rs 27,000 crore. The government wants to support new ideas and advanced technology. It also plans to give more policy and financial help to defence research projects.
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Private Companies to get Equal chance
Sources say the government may treat private defence companies and public sector companies equally. Private firms may soon get financial support similar to defence PSUs. This move may create fair competition in the defence industry.
Changes in rules may allow private companies to bid for more defence projects. These projects currently go mostly to large PSUs like Hindustan Aeronautics Limited, Bharat Electronics Limited, Mazagon Dock Shipbuilders Limited, and Bharat Dynamics Limited. If approved, private firms may compete directly with these companies.
