Budget 2025: As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025 on February 1, the defence sector is optimistic about significant measures aimed at bolstering India’s strategic capabilities and fostering self-reliance. This will be Sitharaman’s eighth Budget presentation, and the second one under Prime Minister Narendra Modi’s third term.
Past Allocations and Future Expectations
In the previous fiscal year, the Indian government allocated Rs 6.22 lakh crore to the defence sector, marking a 4.79 percent increase from the previous year’s budget. This allocation reflected the government’s continued commitment to modernising India’s armed forces and strengthening the ‘Atmanirbhar Bharat’ initiative, which focuses on reducing dependency on foreign defence imports. Experts believe that the upcoming Budget for 2025 will likely build on this momentum, with a focus on enhancing funding for both domestic production and research and development (R&D).
A Vision for Self-Reliance and Economic Growth
Sahil Luthra, Managing Director of Vijayan Trishul Defence Solutions, underscored the importance of sustained investment in the defence sector to reinforce national security and stimulate economic growth. According to Luthra, the defence industry is hopeful that the 2025 Budget will provide significant investments in the areas of domestic production, R&D, and incentives for the private sector.“
The Defence industry is eagerly awaiting substantial investments in these critical areas, as they are essential for both strengthening national security and promoting self-reliance under the ‘Atmanirbhar Bharat’ initiative,” Luthra said. He emphasized that these investments would not only fortify India’s strategic position but also play a pivotal role in contributing to the economy by boosting exports and creating high-skill jobs.
Experts in the sector believe that a continued focus on increasing domestic production capacity will reduce India’s dependence on foreign suppliers, furthering the nation’s goal of self-reliance. They also anticipate that increased funding for defence R&D will accelerate technological advancements, supporting innovation within the sector.
Innovation and Collaboration Between Sectors
Looking forward, Luthra stressed that innovation and increased collaboration between public and private players in the defence sector could define the growth trajectory in the coming years. The sector has witnessed significant progress in recent years, with private companies now playing a crucial role in developing defence technologies and systems. The government’s continued push for greater involvement of private players and investments in R&D is expected to foster an ecosystem of innovation that can drive the sector’s growth.“
In a stable economic scenario, we are hopeful for a Budget that prioritises innovation, supports strategic advancements, and enhances India’s self-reliance in defence manufacturing,” said Luthra.
Defence Sector’s Role in Economic Development
Apart from national security, experts highlight that the defence sector can also significantly contribute to India’s economic development. With increasing focus on domestic manufacturing, there is growing potential for India to become a global player in the defence export market. The government’s initiatives to support defence startups and promote the Make-in-India programme are expected to further elevate India’s position as a hub for defence manufacturing.
In the coming years, the defence sector is likely to become a critical driver of economic growth, contributing to employment generation, technology development, and a robust manufacturing ecosystem. This, in turn, will enable India to reduce its reliance on foreign suppliers while enhancing its geopolitical and strategic influence globally.
Strategic Focus for Budget 2025As the government prepares to unveil the Union Budget for 2025, the defence sector is hopeful that the government will continue its commitment to modernising India’s armed forces, fostering innovation, and encouraging self-reliance. The emphasis on domestic production, R&D, and public-private collaboration will likely play a key role in shaping the future of India’s defence capabilities, reinforcing national security, and driving long-term economic growth.
