New Delhi: The Ministry of Defence (MoD) has reported capital expenditure of ₹92,211.44 crore, amounting to 51.23% of its total capital outlay for Financial Year 2025–26, by the end of September 2025. This is a strong indicator of accelerated defence modernization and efficient financial planning, as India continues to bolster its armed forces and domestic defence industry.
The total capital outlay allocated to MoD for FY 2025–26 stands at ₹1,80,000 crore, a 12.66% increase over last year’s actual capital expenditure of ₹1,59,768.40 crore.
Timely Delivery of Key Defence Platforms
The early and significant utilisation of the capital budget is expected to ensure timely acquisition and delivery of critical defence platforms, including aircraft, ships, submarines, weapons systems, and electronic warfare equipment. These acquisitions are crucial to maintaining operational readiness and enhancing the combat capabilities of the Indian Armed Forces.
The majority of the current capital spending has been directed towards aircraft and aero engines, followed by land systems, armaments, projectiles, and other high-priority modernisation needs.
Boost to Indigenous Defence Manufacturing
In line with the government’s continued focus on self-reliance under Aatmanirbhar Bharat, the MoD has earmarked ₹1,11,544.83 crore for procurement from domestic defence industries in FY 2025–26. As of now, around 45% of this domestic procurement allocation has already been utilised, reflecting growing engagement with Indian defence manufacturers, including MSMEs and start-ups.
Since FY 2020–21, the ministry has consistently increased the proportion of capital procurement from Indian vendors to strengthen the domestic defence ecosystem, reduce import dependency, and encourage indigenous innovation.
Sustained Growth in Capital Outlay for Defence Services
The capital outlay for defence services has been on a steady upward trajectory, registering a nearly 60% increase over the past five years. The rising trend signals the government’s long-term commitment to equipping the armed forces with modern and technologically advanced systems while also boosting infrastructure in border areas and strategic regions.
MoD on Track for Full Utilisation of Capital Budget
With several big-ticket projects nearing approval and a healthy pace of expenditure, the MoD is confident of fully utilising the ₹1.8 lakh crore capital allocation by the end of the financial year. Simultaneously, the Ministry is also working on budgetary projections for revised estimates, ensuring better financial control and planning.
The capital expenditure not only strengthens India’s defence preparedness but also plays a vital role in economic growth by generating employment and creating opportunities in manufacturing, R&D, and infrastructure sectors.
