Budget 2026: From Guns to GDP - India’s Defence Moment That Can Fuel The Nation's Growth

India’s defence industry is undergoing a major transformation, shifting from import dependence to emerging as a global manufacturing and export player. Policy reforms and strategic prioritisation have

boosted indigenous production. Union Budget 2026–27 presents an opportunity to address remaining structural gaps and position defence manufacturing as a pillar of India’s economic rise in an increasingly fragmented global order, said an ET report.The Union Budget 2026–27 comes at a crucial moment for India’s defence sector. It can help consolidate recent gains, plug long-standing gaps, and firmly establish defence manufacturing as a key driver of economic growth.Few sectors in post-liberalisation India have witnessed a transformation as rapid, sustained, and strategically driven as defence. What was once a closed, import-heavy, and public-sector-dominated space has, within a decade, been reshaped through consistent policy reform, institutional restructuring, and strong political focus.In today’s volatile global environment—marked by geopolitical fragmentation, trade wars, sanctions, and rising military conflicts—the timing is significant. As global supply chains fracture and countries seek trusted and diversified partners, defence manufacturing has emerged as a rare sector where economic competitiveness, strategic autonomy, and geopolitical relevance intersect.At a time when India’s broader economy faces pressure from protectionism, tariffs, and slowing global demand, defence manufacturing offers the potential to act as a powerful growth engine. It can anchor industrial expansion, boost exports, deepen technological capabilities, and strengthen national resilience simultaneously.The upcoming Budget therefore has a clear role to play. It can reinforce India’s long-term intent to build defence manufacturing into a central pillar of its economic and strategic rise.From Dependence to AmbitionHistorically, India’s defence industry was weighed down by a paradox. Despite being one of the world’s largest arms importers with a vast domestic market, it failed for decades to build a competitive indigenous industrial base. Production was concentrated in defence public sector undertakings and ordnance factories, innovation cycles were slow, and private sector participation remained limited.That legacy is now changing—and Budget 2026–27 could be decisive in ensuring the momentum is not just sustained, but accelerated.