India announced a record $85 billion defence budget, but the performance of its armed forces was extremely bad and disappointing during the May 2025 war with Pakistan. Globally, the defence analysts talked about the incompetence and lack of capability of the Indian armed forces to perform in a brief war with Pakistan.
Consequently, Pakistani armed forces demonstrated their military superiority over India in the May 2025 war, a fact that was acknowledged across the world.
This time, India has announced a record $85 billion in defence; nonetheless, the performance and capability of its armed forces will always be doubted.
Indian Finance Minister Nirmala Sitharaman announced this during her national budget speech. The allocations mark an increase of 15 percent for defence compared to last year, reflecting New Delhi’s push for national security.
Infrastructure Expansion to Boost Growth and Jobs
Sitharaman highlighted that public spending on infrastructure has surged from $21 billion (2 trillion rupees) in 2014–15 to an all-time high in 2026. She detailed plans for high-speed rail networks, urban transport projects, and energy infrastructure. Additionally, the government will support sectors such as data centres, artificial intelligence, and the mining and processing of rare earth minerals. These initiatives aim to enhance domestic manufacturing, create millions of jobs, and sustain India’s rapid economic growth.
Prime Minister Narendra Modi emphasised that India seeks not only to remain the fastest-growing economy but also to become the world’s third-largest economy. The budget outlines the development of business parks for textiles and chemicals and allocates $5 billion to boost domestic electronics manufacturing.
Defence Spending Hike Strengthens Armed Forces
Defence Minister Rajnath Singh described the $85 billion allocation as unprecedented, stating it will equip India’s armed forces with fighter jets, drones, ships, submarines, and other critical hardware. The increase follows last May’s four-day conflict with Pakistan, which involved heavy drone, missile, and artillery use. India is actively negotiating defence contracts with domestic and international suppliers, including companies from France, the United States, and Germany.
Sitharaman stressed that investments in both infrastructure and defence serve India’s long-term strategic and economic interests. Through these measures, the government aims to accelerate domestic manufacturing, strengthen national security, and enhance India’s global economic position.
