First Budget After Operation Sindoor: ₹1 Lakh Crore Jump in Defence Spend; Big Boost for Jets, Naval Fleet

In

the first Budget presented after Operation Sindoor, the central government unveiled a significantly higher defence outlay aimed squarely at strengthening air and naval capabilities and accelerating domestic manufacturing. Union Finance Minister Nirmala Sitharaman on Sunday, February 1, set aside Rs 7,84,678 crore as defence outlay for 2026-27 as against last year's allocation of Rs 6,81,210 crore. The Budget pegs capital expenditure at ₹2,19,306 crore, including ₹63,733 crore for aircraft and aero engines and ₹25,023 crore for the naval fleet.

Defence Budget Breakdown

• The total capital outlay has been pegged at Rs 2,19,306 crore.

• The revenue expenditure has been put at Rs 5,53,668 crore that included Rs 1,71,338 crore for pensions.

• Under capital expenditure, Rs 63,733 crore has been set aside for aircraft and aero engines while Rs 25,023 crore is allocated for the naval fleet.

• In her budget speech, Finance Minister Nirmala Sitharaman proposed exempting basic customs duty on components and parts required for the manufacture of civilian, training and other aircraft.

• She also announced to waive 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 two decisions are expected to help the defence aerospace industry.

How Defence Spending Compares With Last Year

In 2025-26, the government allocated Rs 6,81,210 for defence budget. The capital outlay was pegged at Rs 1,80,000 crore which increased to Rs 1,86,454 crore at revised estimate stage.The Defence Ministry was seeking higher military spending this time. The Defence Ministry wanted a 20% increase in military spending after the May conflict, according to Reuters. The report said that the Indian government is likely to ‍ease conditions for foreign investments into defence ‍units. The Federation of Indian Chambers of Commerce and Industry, which has 250,000 companies as members, has suggested setting up defence-industrial corridors and an export-promotion council to meet the country's defence-export target of $5.5 billion by ‍2029.

All About Operation Sindoor

India had launched Operation Sindoor on May 7, targeting terror infrastructure at nine known locations in Pakistan and Pakistan-occupied Kashmir in retaliation for the April 22 Pahalgam attack that killed 26 civilians.Pakistan responded to the Indian attack on terror infrastructure with a swarm of drones and missiles, all tracked and destroyed by Indian forces. In response, Indian armed forces mounted fierce counter-attacks and inflicted heavy damage to several airbases in Pakistan. The hostilities ended with an understanding on stopping the military actions following talks between the Director Generals of Military Operations of both sides on the afternoon of May 10 following a request by Islamabad.According to Indian Army chief General Upendra Dwivedi, the forces had mobilised their troops during Operation Sindoor and were "fully prepared" for ground operations. Operation Sindoor remains ongoing and any misadventure by the adversary will be dealt with effectively, he said earlier this month.