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The Indian government has proposed a record defence budget of Rs 7.8 lakh crore for 2026-27, increasing by 15% from the previous year. Key strategies include the Agnipath scheme to reduce pension liabilities and a focus on domestic arms procurement, with 75% of the capital acquisition budget earmarked for local industries.

The Agnipath allocation increased by 56% to Rs 15,173 crore to support the recruitment of 1.1 lakh soldiers. Despite these measures, the total defence pension allocation rose to over Rs 1.71 lakh crore, reflecting ongoing pension obligations.