India is planning a significant ramp-up of its defence expenditure, aiming to increase the share of defence spending in GDP from the current 1.9 per cent to 2.5 per cent over the next five-year plan, Defence Secretary RK Singh told CNBC-TV18 in an interview.
Singh maintained that the government intends to seek additional allocations as part of the 16th Finance Commission’s five-year cycle, with flexibility to request further capital expenditure from the finance ministry if required. However, he noted that it was too early to comment whether the government will seek additional funds in the current fiscal’s revised estimates.
“Based on a faster pace of expenditure, we can ask for additional money during the revised estimate stage if it is felt that the requirements are more,” Singh said. “It really depends on the absorptive capacity of the industry, our own ability to spend money quickly, to sign contracts faster, to take procurement decisions faster.”
India’s defence procurement plan
On these lines, RK Singh told CNBC TV18, “We intend to sign defence contracts of Rs 2 lakh crore in FY26.” This, he added, will include 3 Apache helicopters from the US this month, and progress on contract for 5th generation Advanced Medium Combat Aircraft (AMCA) programme which is expected to be awarded in next 3-6 months. Further, the defence secretary noted that the development and flight testing phase for the AMCA would take around 10 years. In the interim, the acquisition of 5th generation fighter jets from key strategic allies is being explored.
Jefferies on defence capex
Earlier, a report by Jefferies had maintained that India’s defence capital expenditure skyrocketed 328 per cent YoY in May 2025. The surge was driven by the government’s intensified focus on national security and self-reliance on defence manufacturing, especially after the Centre carried out the May 2025 ‘Operation Sindoor’.
Jefferies had earlier also highlighted that this capex momentum is part of a broader strategic push with India’s defence budget expected to grow at a CAGR of around 14 per cent through FY30.
Defence Secy on ‘Operation Sindoor’
Addressing speculation surrounding Operation Sindoor, the defence secretary declined to disclose any operational losses. Responding to reports suggesting multiple Rafale jets were affected, he said firmly, “You have used the term Rafales in plural — I can assure you that is absolutely not correct.”