Defence Budget 2026: What India Bought Last Year vs What’s Coming Next - Rafales, Submarines, Drones?

New Delhi: The Union Budget 2026 has marked a historic rise for India’s defence sector, allocating Rs 7.85 lakh crore, a sharp increase from Rs 6.81 lakh crore last year, underscoring the government’s renewed focus on military modernisation in the post-Operation Sindoor security environment. According to official figures, the defence outlay for 2026–27 stands at Rs 7,84,678 crore, roughly 2 % of India’s projected GDP, representing a 15.19% increase over FY 2025–26. Defence now accounts for 14.67 % of total central government expenditure, the highest among all ministries.Of the total outlay, capital expenditure, used for new weapons, aircraft, ships, submarines, drones, and other modernisation, has been pegged at Rs 2,19,306 crore, while revenue

expenditure stands at Rs 5,53,668 crore, including Rs 1,71,338 crore for pensions. This substantial capital boost is a direct response to the financial requirements arising from emergency procurement after Operation Sindoor, which saw Indian armed forces launch decisive strikes on terrorist camps in Pakistan and Pakistan-Occupied Kashmir (POK).“It is the first budget since Operation Sindoor, and a double-digit increase for the defence ministry was always on the anvil,” officials told Times Now, highlighting that the capital allocation, set above Rs 2 lakh crore, is the highest ever in India’s history.

Last Year’s Acquisitions and Modernisation Progress

FY 2025–26 was a busy year for India’s armed forces, with a focus on strengthening capabilities across air, land and sea domains.Indian Air Force (IAF)The IAF received additional Tejas Mk1A aircraft as part of the indigenous fighter expansion programme.Rafale deliveries continued, with plans for a potential 114-aircraft deal by March 2027 still under discussion. Negotiations remain in the works, including indigenous content requirements and price discussions after the Defence Acquisition Council’s approval.Preparations for air-to-air refuellers and AWACS systems have been finalised, with costings done for joint procurement with the USA and Israel (refuellers) and Brazil (AWACS). These platforms are considered force multipliers for the IAF, dramatically enhancing operational reach and surveillance capabilities.Indian NavyThe Navy expanded its fleet with new warships and interceptor craft, improving coastal and blue-water defence.MH-60R Seahawk helicopters were inducted for anti-submarine warfare, and the Navy also advanced plans for air-independent propulsion (AIP) submarines.A Rs 25,023 crore allocation in the new budget reflects the government’s intent to continue strengthening naval capabilities with both surface combatants and sub-surface platforms.Indian Army & Joint ServicesApproval and induction of MALE drones, unmanned surveillance systems and advanced artillery were major achievements.Procurement of precision-guided munitions, upgraded tanks and air defence systems (like QRSAM) ensured readiness for conventional and high-intensity operations.The Army also benefited from enhanced ammunition stocks, leveraging domestic production under Make in India initiatives.According to Times Now exclusive, the combination of Operation Sindoor’s operational success and the prior year’s acquisitions gave the armed forces a significant strategic edge, strengthening both deterrence and rapid-response capability along India’s borders.

Budget 2026–27: Big-Ticket Acquisitions & Modernisation Plans

The 2026–27 budget builds on last year’s acquisitions with highly strategic investments, prioritising future-ready technology and self-reliance.Air PowerRafale fleet expansion continues, with negotiations ongoing for 114 additional aircraft.Funding for aero engines, training platforms and indigenous programmes under DRDO-Safran collaboration has been earmarked. This Rs 2,650 crore project aims to develop next-generation engines for fighter aircraft.Procurement of air-to-air refuellers and AWACS will enhance aerial reach, surveillance and strike capabilities.Key Numbers

Category	Allocation	Purpose
Aircraft And Aero Engines	63,733	Fighter jets, engines, AWACS, refuellers
Naval Fleet	25,023	Warships, submarines, interceptor craft
Army And Others	2,19,306	2,19,306
Revenue Expenditure	3,65,668	Operations, salaries, training
Defence Pensions	1,71,338	Retired personnel support

Naval FleetCapital outlay supports surface vessels, submarines and next-generation combat systems, including AIP submarines.The Navy is also looking at autonomous vessels and interceptor craft to strengthen coastal and littoral security.Army & Joint SystemsProcurement of advanced drones, long-range missiles and air-defence systems will continue.Indigenous production of artillery, UAVs, and precision munitions will expand under Make in India initiatives.Industrial & Strategic BoostCustoms duty exemptions on aircraft parts and raw materials will support the aerospace ecosystem, including maintenance, repair and overhaul activities.More than 75 % of capital acquisitions are earmarked for domestic industry, aligning with Aatmanirbhar Bharat goals.The budget positions India for defence exports, already exceeding Rs 23,000 crore (~$3 billion), with BrahMos missiles exported to the Philippines and discussions underway with Vietnam and Indonesia.The Indo-Saudi defence exhibition will showcase Indian capabilities, with participation from 30 public and private sector firms, including Bharat Forge and Munitions India Ltd, leveraging India’s operational successes during Operation Sindoor.