Defence outlay raised to Rs 7.84 lakh crore in Budget 2026-27, boost for aerospace sector

The government on Sunday set aside Rs 7,84,678 crore as defence outlay for 2026-27 as against last year's allocation of Rs 6,81,210 crore.

The total capital outlay has been pegged at Rs 2,19,306 crore. The revenue expenditure has been put at Rs 5,53,668 crore that included Rs 1,71,338 crore for pensions.

Under capital expenditure, Rs 63,733 crore has been set aside for aircraft and aero engines while Rs 25,023 crore is allocated for the naval fleet.

In 2025-26, the government allocated Rs 6,81,210 for defence budget.

The capital outlay was pegged at Rs 1,80,000 crore which increased to Rs 1,86,454 crore at revised estimate stage.

In her budget speech, Finance Minister Nirmala Sitharaman proposed exempting basic customs duty on components and parts required for the manufacture of civilian, training and other aircraft.

She also announced to waive basic customs duty on raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul requirements by units in the defence sector.

The two decisions are expected to help the defence aerospace industry.