In 1st Budget after Op Sindoor, defence gets huge boost for modernisation

The fresh boost will be targeted at increasing long-range standoff capabilities, military aircraft, missiles and armed drones in aftermath of Operation Sindoor.

Updated on: Feb 1, 2026, 14:38:33 IST

By Shishir Gupta

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Finance Minister Nirmala Sitharaman on Sunday announced a capital outlay of ₹5.95 lakh crore for defence, up from last year’s Budget of ₹4.92 lakh crore. While the total capital outlay has gone up about 22% from last year’s allocation, the budget for modernisation alone has been raised by 24%.

Defense budget gets boost (PTI)

The ministry had wanted an increase of 20%, sources aware of the matter said, with the fresh boost targeted at increasing long-range standoff capabilities, military aircraft, missiles and armed drones in the aftermath of Operation Sindoor.

Defence ministry officials feel that the Budget impetus will enhance their capability in modernising the armed forces and equipment. Several projects linked to Rafale fighter jets, submarines and unmanned aerial vehicles are in the pipeline, the sources added.

In FY26, the Budget for the defence ministry's capital outlay was ₹1.8 lakh crore. Capex allocations include ₹63,733 crore for aircraft and aero engines.

In 2025-26, the government had allocated ₹6.8 lakh crore for the defence budget. The capital outlay was pegged at ₹1,8 lakh crore, which increased to ₹1.87 crore in revised estimates.

“It is proposed to exempt basic customs duty on raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul requirements by units in the defence sector,” the finance minister said in her Budget speech on Sunday.

She also announced an exemption in basic customs duty on components and parts required for the manufacture of civilian, training and other aircraft.

ABOUT THE AUTHOR
Shishir Gupta
Shishir Gupta is Executive Editor at Hindustan Times and one of India's top journalists covering national security, strategic affairs, foreign policy and geopolitics. Over the past three decades, he has extensively reported on India's military, diplomatic and security landscape, covering every major conflict and national security challenge, from the 1999 Kargil War and the 2020 East Ladakh standoff to Operation Sindoor in 2025. He has also covered major terror attacks, including the IC-814 hijacking, the 26/11 Mumbai attacks and the 2025 Pahalgam terror strike, along with numerous Pakistan-backed terrorist incidents in the Kashmir Valley and across India. He has reported on national and state elections for more than three decades. A recognised authority on strategic affairs, Gupta has covered India's nuclear programme since the Pokhran-II (Shakti series) tests in May 1998 and has written extensively on global nuclear issues, Indian diplomacy and the country's expanding global outreach. He has also reported widely on international conflicts and terrorism, with a special focus on the Indian subcontinent. Gupta has interviewed Prime Minister Narendra Modi more than four times, including Modi's first interview with the print media after becoming Prime Minister in May 2014. His other interviews include three with the Dalai Lama, as well as conversations with Benjamin Netanyahu, Amit Shah, Yogi Adityanath, S. Jaishankar, Nirmala Sitharaman and Piyush Goyal. He is the author of Indian Mujahideen: The Enemy Within (Hachette, 2011) and Himalayan Face-off: Chinese Assertion and Indian Riposte (Hachette, 2014). He was awarded the Chevening-Wolfson Joint Scholarship at Wolfson College, University of Cambridge, UK, in 1998 and participated in the International Visitor Leadership Program (IVLP) of the US State Department in 2006. He received the Ben Gurion Prize from Israel in 2011 and the K. Subrahmanyam Prize for Strategic Studies in 2015 from the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA). Since 2024, he has hosted Point Blank, Hindustan Times' weekly YouTube show on global geopolitics.Read More

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