Following the news that Indian Finance Minister Nirmala Sitharaman presented the interim budget ahead of the general elections to be held later this year; Rouble Sharma, Defense Analyst at GlobalData, offers her view:
“India has unveiled an interim budget, which is strategically aimed at sustaining essential operations until a comprehensive budget can be presented. The Indian Ministry of Defense (MoD) has been allocated a substantial budget of $55.4 billion (INR 4.6 lakh crore) for the fiscal year 2024-2025, excluding pensions and civilian expenses. This interim defense expenditure, inclusive of pensions, stands at $75.7 billion (6.2 lakh crore).
“An allocation of $21 billion is earmarked for the acquisition expenditure of new military platforms and upgrades. This signals a strategic focus on enhancing and modernizing the capabilities of the armed forces, aligning with the evolving geopolitical landscape. The recently approved purchase of 31 armed MQ-9B SkyGuardian drones from the US reflects India’s dedication to integrating cutting-edge technologies into its defense infrastructure. The Indian Navy is also advancing its capabilities with the potential acquisition of 26 Rafale Marine aircraft, as France submits a detailed bid.
“Moreover, the announcement of a new scheme to strengthen deep technologies (deep-tech) for defense purposes and expedite ‘atmanirbharta’ (self-reliance) reflects the government’s intent in the interim budget. Such initiatives will help foster innovation, research, and development within the defense sector, aligning with the broader goal of achieving self-reliance in critical defense technologies.
“Notably, programs like the LCA-Mk2 and Future Infantry Combat Vehicle (FICV) to be developed under the ambit of the ‘Make in India’ initiative suggest a forward-looking approach, demonstrating the nation’s commitment to building a robust, self-sufficient defense industry capable of meeting contemporary challenges.
“While the final budgetary picture will emerge with the passing of the full budget in June-July this year, this interim allocation offers a glimpse into India’s current defense priorities. Balancing between personnel costs, efficient modernization, and emerging technology adoption will be the main challenges that the government will have to navigate.”