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February 2, 2022

India announces modest increase in defence budget with focus on self-reliance

The government allocated $70bn for the defence ministry in FY2022-23, a rise of 4.5% over the last revised estimates.

The Government of India has announced a modest increase in its defence budget, with a larger focus on self-reliance, as it seeks to reduce its dependence on weapon imports.

In the union budget for financial year 2022-23, Indian Finance Minister Nirmala Sitharaman allocated $70bn (Rs5.25tn) for the defence ministry.

The figure represents an increase of approximately 4.5% over the last revised estimates, and a 9.8% rise over the budget estimates of 2021-22.

The cumulative increase in the capital budget since 2019-20 has been $6.53bn (Rs489.75bn), indicating an increasing focus on modernisation. This increase will also help to pursue the objectives of ‘Aatmanirbhar Bharat’, a government policy to achieve self-reliance.

The share of domestic capital procurement was also increased from 64% in FY 2021-22, to 68% of the Capital Acquisition Budget of the Defence Services for the FY 2022-23. This figure translates to $11.29bn (Rs845.98bn).

The government also plans to invest in defence research and development (R&D) for industry, start-ups, and academia. In addition, 25% of the defence R&D budget will be allocated to the private industry.

The private industry will be encouraged to participate in designing and developing military platforms and equipment.

The government also plans to establish an independent nodal umbrella body to meet testing and certification requirements.

Commenting on the defence budget, Minister of Defence Rajnath Singh said on Twitter: “It is a Budget which would give fillip to ‘Make in India’, boost demand and build capacities for a stronger, prosperous and confident India.”

Last month, the Indian Armed Forces selected Saab’s AT4 weapon system through a competitive bidding process.

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