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India's defence budget for 2026-27 is set at Rs 7.8 lakh crore, a 15% increase from last year. The government aims to control military expenditure by restructuring revenue spending, utilizing the Agnipath scheme to lower pension costs, and focusing on domestic procurements to reduce reliance on costly imports.

Under the Aatmanirbhar Bharat initiative, 75% of the capital acquisition budget is designated for domestic industries, with Rs 1.39 lakh crore allocated for procurement. The Agnipath scheme's budget increased by 56% to Rs 15,173 crore, with recruitment expected to rise to 1.1 lakh. However, total pension allocations rose to Rs 1.71 lakh crore due to existing obligations, including an increase in the Indian Army's pension bill from Rs 141,751 crore to Rs 151,631 crore.