Ministry of Finance (MoF) hikes defence Budget 15.3% to Rs 7.84 lakh crore for FY27

Key facts

• Total FY27 defence allocation set at Rs 7.84 lakh crore, up from Rs 6.81 lakh crore in FY26, marking a 15.3% rise.
• Revenue expenditure for defence services fixed at Rs 3.65 lakh crore.
• Capital outlay raised 21.8% to Rs 2.19 lakh crore against revised estimate of Rs 1.86 lakh crore.
• Defence pensions allocated Rs 1.71 lakh crore and civil defence spending Rs 28,554.61 crore.
• Basic customs duty exempted on components for manufacture of civilian, training and other aircraft.
• Basic customs duty waived on raw materials imported for maintenance, repair or overhaul by defence units.
• Indigenous defence production touched record Rs 1.54 lakh crore in FY 2024-25.
• Defence exports hit all-time high of Rs 23,622 crore in FY 2024-25.
• Domestic share in defence equipment now 65%, with Defence Public Sector Undertakings contributing 77% of output.
• Two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu have attracted over Rs 9,145 crore investments.
• 788 industrial licences issued to 462 companies under liberalised FDI and Production-Linked Incentive (PLI) regime.
• Defence Acquisition Procedure (DAP) 2020 and Defence Procurement Manual (DPM) 2025 streamline capital acquisition.