Committed to ramping up indigenisation, the Ministry plans to spend at least 75% of its capital expenditure within India, while also advocating for a minimum 17% annual hike in the defence budget to fuel the nation’s strategic ambitions.
In an interview with CNBC-TV18 at the Reforms Reloaded in New Delhi, Singh said the Defence Ministry is preparing to issue a request for proposal (RFP) for the MALE drones, which will cost the government around ₹30,000 crore. He added that the government could place orders worth up to ₹75,000 crore during the remainder of the financial year 2025-26, including for Airborne Warning and Control System (AWACS) aircraft.
These procurements aim to bridge critical capability gaps within India’s defence forces, including the acquisition of 4.5-generation fighter jets.
“If you don’t have 5th generation fighter jets immediately, you can make up for it by having a larger number of 4 and 4.5 generation fighters,” Singh explained, pointing out that the Indian Air Force has flagged these capability gaps.
He further outlined plans to enhance defence readiness through the acquisition of AWACS, drones, unmanned aerial vehicles (UAVs), and aerial refuelling aircraft, among other platforms.
India’s defence budget spending
On defence budget spending, Singh highlighted the Ministry’s long-term expenditure plans, “India’s new defence roadmap indicates that the government could look at spending $35 billion or more every year for the next 15 years.”
Emphasising the focus on indigenisation and self-reliance, he stated, “75% of the capex will be spent within India, and the government will exhaust its allocated budget this year as well.”
“Last year, for the first time, we exhausted our budgets, and this year we will repeat that. We have already awarded three-fourths of last year’s contracts,” Singh said.
He stressed that consistent budget utilisation will strengthen their case for increased funding: “Once we stop surrendering budget, we can convince the Finance Ministry to give us more.”
India’s defence capex plans
The Ministry expects a 10% increase in defence capital expenditure in the upcoming budget and will push the Finance Commission for at least a 17% hike.
Singh also noted that India’s defence spending has fallen below 2% of GDP, with the government aiming to raise it to between 2.5 and 3% to adequately meet national security demands.
