Introduction
Matters of defence continue to dominate the news, due to the security challenges faced by India and also since India’s defence sector is undergoing significant transformation, driven by modernization efforts, self-reliance initiatives, and strategic global partnerships. February 2025 was no exception when four major developments related to India’s defence were at the fore. These were the presentation of the budget on 01 February, the Aero India Show and the visits by The Prime Minister to France and USA. All significant in their own way, with major implications that are enumerated in the succeeding paragraphs.
Defence Budget
On 01 February, the Finance Minister, Nirmala Sitharaman presented her eighth budget. She is aware of the requirements of the Armed Forces and the existing regional and global security environment, with some new imponderables being the policies and strategic behaviour of the USA under President Trump.
From the ongoing wars in Russia–Ukraine and Israel-Gaza, three major lessons stand out, the first being the ‘need to develop hard power,’ the second is to have the ability the sustain and maintain that hard power, and thirdly the manner in which technology is transforming the battlefield. All three need substantial financial outlays in the form of budgetary support.
The defence budget for 2025-26 has been increased by 9.53%, bringing the total allocation to Rs 6.81 lakh crore ($79 billion). This steady expansion reinforces India’s commitment to military modernization and self-reliance in defence production is also aligned with the fact that 2025 has been labelled as the ‘Year of Reforms’ by the Ministry of Defence.
The key allocations are summarised below: –
- Revenue Expenditure: The revenue budget for all three Services has increased from Rs 2,82,772.67 crore in 2024-25 to Rs 3,11,732.30 crore reflecting a 10.24% increase for 2025-26 towards meeting day-to-day expenses, salaries, operations, training, and logistics.
- Pensions: The pension bill has increased from Rs 1,41,205 crore to Rs 1,60,795 crore, an increase of 13.87%.
- Capital Outlay: The capital expenditure for military modernisation has been set at Rs 1.8 lakh crore, reflecting a modest 4.6% increase from the previous allocation of Rs 1.7 lakh crore. However, what stands out is that the Defence Ministry returned Rs 12,500 crore as unspent funds under this category. Under capital expenditure, Rs 48,614 crore is for aircraft and aero engines while Rs 24,390 crore has been allocated for the naval fleet. An amount of Rs 63,099 crore has been set aside for other equipment.
- Defence Research and Development Organisation (DRDO): The budget has been increased by 12.41% to Rs 26,817 crore from the previous Rs 23,856 crore which includes advanced research in AI, robotics, and space warfare. Of this, Rs 14,924 crore has been allocated for capital expenditure and research projects.
- iDEX (Defence Innovation): Rs 449.62 crore reflects a threefold jump in two years.
- Border Infrastructure: The Border Roads Organisation has been allocated Rs 7,146 crore to enhance strategic infrastructure in border areas through the construction of roads, tunnels, and bridges in areas such as Ladakh, Arunachal Pradesh, Jammu and Kashmir, and Rajasthan.
Comments: Though the capital outlay figure is 4.6% more than the previous year, but the question is whether it is adequate to meet India’s efforts for modernization of its Armed Forces to counter the collusive threat faced from both China and Pakistan? As per the open domain, China’s defence budget for the year 2024 was $231 billion. Pakistan on one hand, is borrowing money to pay its interest on debts, but on the other hand in December last year approved the acquisition of China’s fifth-generation J-35A stealth fighter jets.
The fact is that the Revenue Budget, significantly dwarfs the proposed Capital outlay, at a time when acquisitions need to be given the topmost priority. There is a significant shortage of fighter aircraft, submarines, and Air Defence systems to name a few. War does not happen overnight; it sends warning signals well in advance. It is up to us to read those signals and interpret them correctly, and then prepare accordingly. Are Kargil, Parliament, 26/11, Udhampur, Uri, Pulwama, Galwan and now procurement of J-35A by Pakistan, not signals? Is it wise to wish them away and get on with business as usual? Or does prudence suggest – something else.
The Ministry has earmarked 75% or 1.1 lakh crore of its new capital procurement for domestic industry in accordance with the governments push for self-reliance. With 25 % of the domestic share being reserved for the private sector. While this is a step in the right direction, the larger question remains whether the public and private sector have capabilities and capacities to absorb this amount and deliver state of the art equipment on time.
There are also a few issues directly related to Capital Expenditure. The first being the outlay for committed liabilities, next is the factor of inflation which is greater than the 4.6% increase and finally is the fact that there has been a weakness in the Rupee versus the Dollar, which will again impact payments, particularly to foreign suppliers.
While the 9.53 % increase, reflects the government’s emphasis on border security, military modernization, and self-reliance in defence production. The fact is that defence expenditure as a percentage of GDP has been falling. While there is considered to be an invisible barrier of 3%, in recent years the same has been below 2%. This year, it is pegged at 1.91 % of the GDP. Considering the regional and global challenges, there is a need to substantially increase the figure for the next few years. The time has come to face reality/facts and rise to the occasion as a nation. As Zulfikar Ali Bhutto once said, “we will eat grass, even go hungry, but we will get one of our own (Atom Bomb).
Another area of concern is defence R&D. Currently, approximately 1% of defence expenditure has been earmarked for R&D, compared to 13% by the US. This limits advancements in critical areas like hypersonic weapons, AI, and quantum technologies. If we need to focus on self–reliance and this is an area where we need greater investments.
Finally, the fact that the Defence Ministry surrendered Rs 12,500 crore as unspent funds under this category is reflective of a malaise in the system. The policies and procedures need an urgent review. But there must be urgency in overcoming these hurdles by simplifying the acquisition procedures to ensure that technology obsolescence does not outpace procurement cycles. Time-bound acquisition cycles are vital to align industry investments with the government’s goals and to provide state-of-the-art solutions.
Speaking at the 21st Subroto Mukerjee Seminar, the Defence Secretary Shri RK Singh was candid when he described India’s defence procurement system as “broken” and plagued by delays. He stated that; “Our procurement policy, for a long time, has been broken, and I make no secret of that. It is true, we have not been able to do things on time.” So, if the Defence Secretary can say this we have a serious problem! Which gives rise to an equally serious question, that should he be saying it, or resolving it?
Aero India
Aero India, a biennial air show and aviation exhibition was held from 10 to 14 February at Bengaluru. The event not only showcased the nation’s technological prowess and innovations but also provided a dynamic platform for international cooperation and strategic dialogue. It attracted over 900 exhibitors from 90 countries, including 26 Defence Ministers and 118 CEOs, underscoring India’s growing prominence in the global defence sector.
The IAF showcased its aviation power through an impressive fly past during the inaugural function on 10th February. In a first, the Army Chief, General Upendra Dwivedi and Air Force Chief, Air Chief Marshal AP Singh took to the skies together in the indigenous, Light Combat Aircraft (LCA) Tejas. The aircraft developed entirely in India, represents the country’s commitment to ‘Aatmanirbharta’ in defence.
Aero India 2025 also witnessed the presence of two fifth-generation fighters of Western and Eastern block. The Lockheed F-35 Lightening II, and the Russian Sukhoi Su-57 ‘Felon’. The inclusion of both the Su-57 and F-35 highlights India’s position as a key hub for international defence and aerospace collaboration and provide a rare side-by-side comparison of Eastern and Western fifth-generation fighter technology. Russia has offered to produce Su-57 stealth fighter jets in India with full technology transfer.
The Chief of the Air Staff, Air Chief Marshal AP Singh, has questioned the ability of Hindustan Aeronautics Limited (HAL) to meet the Air Force’s critical requirements in the backdrop of a lingering delay in the supply of new fighter jets. “I can only tell you our requirements and what our worries are. You have to alleviate those worries and make us more confident. At the moment, I am just not confident of HAL, which is a very wrong thing to happen… Everything is ‘ho jayega’ and ‘karenge’!”
Comments: But even as we write this, the question does crop up, was this the aatmanirbharta that we were looking for? The very heart of the Tejas fighter, the engine, is not made in India. The Kaveri engine project began in the late 1980s, with the aim of powering the Tejas. However, the engine could not meet the required standards and presently the future of the aircraft is dependent on the import of the General Electric F404/414 engine from USA.
The Kaveri engine project failed primarily because it could not meet the required thrust performance levels for the Tejas at high altitudes. It also had excessive weight, and combustion instability. The Kaveri engine was being developed by the Gas Turbine Research Establishment (GTRE), which is a laboratory under the Defence Research and Development Organisation (DRDO). How many projects have run into problems in the DRDO? Who has been held responsible? So, when the Air Chief hears words like ‘ho jayega’ and ‘karenge’, he has a valid point, because he has been hearing this since decades and has no faith. If suddenly there is an operational necessity, he will be responsible, and then he will hear words like “fight with as is where is”
We do need a fifth-generation fighter jet, as of yesterday. If China is willing to export the J-35 fifth generation stealth fighters to Pakistan, it is axiomatic that they have the numbers they need for their own air force. With the number of Air Force squadrons dwindling, the aspect of early procurement, at any cost, needs to be expedited.
PM’s Visit to France
Prime Minister Narendra Modi’s visit to Paris from 10-11 February reinforced the deep and longstanding defence cooperation between France and India as part of the Strategic Partnership. At the heart of this burgeoning relationship is a staggering $20 billion, that India has spent over the years on defence deals. The list includes six Scorpene-class submarines, 36 Rafale fighter jets for the Air Force, and 27 naval variants for the Indian Navy.
Both the leaders welcomed the continuation of the cooperation of air and maritime assets in line with the ambitious Defence Industrial Roadmap agreed in 2024. Both leaders commended progress in collaboration in construction of Scorpene submarines in India, including indigenisation, and in particular the work carried out with a view to the integration of DRDO developed Air Independent Propulsion (AIP) into P75-Scorpene submarines and the analyses conducted regarding the possible integration of the Integrated Combat System (ICS) into the future P75-AS submarines.
They welcomed the commissioning of the sixth and final submarine of the P75 Scorpene-class project, INS Vaghsheer, on 15 January 2025.They mentioned the ongoing discussions on missiles, helicopter engines and jet engines as also the excellent cooperation between the relevant entities in the Safran group and their Indian counterparts. Prime Minister Modi also invited the French Army to take a closer look at the Pinaka MBRL, emphasising that an acquisition of this system by France would be another milestone in Indo-French defence ties. In addition, President Macron welcomed the decision to include India as an observer to the Eurodrone MALE programme managed by OCCAR, which is another step forward in the growing strength of the partnership in defence equipment programmes.
While France offers India its finest military exports with few caveats, the deal is notably lean on technology transfer. The sophisticated ICS for Indian submarines will enhance undersea warfare capabilities, but the absence of deeper tech-sharing agreements leaves India wanting. For a country determined to indigenise its defence production under the “Make in India” initiative, this gap is both conspicuous and consequential.
However, the defence partnership is not a one-way street. In an unexpected twist, India has offered France its Pinaka multi-barrel rocket launcher—a battle-tested system integral to the Indian Army. Should France proceed with this acquisition, it would mark a watershed moment, the first significant Indian defence export to a major Western power. This move could unlock new markets for India’s burgeoning arms industry, reinforcing its status as not just a consumer but a credible supplier of advanced military hardware.
Comments: On the face of it, it all sounds hunky-dory. We will have to wait and see if France will actually be interested in a short range MBRL. More modern and longer-range versions of MBRLs are readily available, but in terms of cost the Pinaka would be the cheapest. A few months ago, a French delegation in India was given a demonstration about the capabilities of the Pinaka rocket system. France, presently has 13 upgraded M270 systems, of which it has sent six to Ukraine since the beginning of the war.
The Pinaka comprises six launch vehicles, accompanied by the loader systems, radar and links with network-based systems and a command post. There are two versions of the Pinaka, Mark I, which has a range of around 40 kilometres and the Mark-II version that can fire up to 80 kilometres. There are plans to enhance the range of the system, first to 120 km and then even up to 300 km.
Having said so much, it is pertinent to state that the base vehicle of the Pinaka System or the prime mover is imported from Czechoslovakia. This by itself has caused number of slippages. Thereafter the integration of the components is done by L&T and Tata Advance Systems Ltd. The Indian Army has so far received only 4 Regiments worth of integrated Pinaka Mk1 weapon system. The order for another 6 Regiments is pending. Therefore, while fully comprehending the advantages of exporting military equipment, the moot point is, that it is obviously more important to kit up our own army before we even think of kitting up a foreign army. This predicament is alarming because our other Rocket Launcher System, the Smerch has its own set of problems. Due to the Ukraine war, the Smerch rockets may not be available, as also there maybe difficulty in getting life extension of the existing ammunition.
PM’s Visit to USA
The Prime Ministers first meeting with Donald Trump’s in his second term on 13th February also had a substantial defence dimension. With focus on enhancing defence collaboration, this meeting set the stage for strategic initiatives aimed at expanding military technology exchanges, co-production ventures, and strengthening bilateral defence ties.
The two leaders announced plans to finalize a new 10-year framework for the US-India Major Defence partnership in the 21st century. They also agreed to move forward on ongoing defence procurement negotiations for several platforms, including land and air systems and coproduction agreements.
The United States will review its arms transfer regulations, including the International Traffic in Arms Regulations, to streamline defence trade, technology exchange and maintenance, spare supplies and in-the-country repair and overhaul of US-provided defence systems.
President Trump and Prime Minister Modi launched a new initiative, the “U.S.-India COMPACT (Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology) for the 21st Century” to drive transformative change across key pillars of cooperation. Under this initiative, they committed to a results-driven agenda with initial outcomes this year to demonstrate the level of trust for a mutually beneficial partnership.
In a major announcement to deepen defence ties, President Trump said the US would increase military equipment sales to India “by many billions of dollars starting this year” ultimately paving the way to providing the F-35 stealth warplanes. This includes the procurement of advanced defence systems, such as the Javelin missiles and Stryker vehicles. Additionally, India is set to receive six more P-8I Poseidon aircraft for the Indian Navy, which will significantly boost the country’s maritime reconnaissance and anti-submarine warfare capabilities.
But a less-defined portion of the joint statement potentially holds the most significance. The leaders resolved to advance military cooperation in multinational settings to advance global peace and security. The two sides “committed to break new ground to support and sustain the overseas deployment of the US and Indian militaries in the Indo-Pacific.” This could hint at changes in defence cooperation to expand interoperability and jointly improve regional security. What remains unsaid is whether this is a way of giving a military dimension to the QUAD.
Comments: Despite rising US arms sales to India, bureaucratic hurdles and export controls limit the transfer of sensitive technologies. The new defence framework announced at the summit may help address these challenges. The bottom line is to build trust rather than new acronyms.
The Donald Trump administration is offering F 35 aircraft known for its ability to operate undetected at supersonic speeds to India in order to woo it away from the Russian Sukhoi Su-57 in a government-to-government transfer package, without provisions for offset, technology transfer, and subsequent bulk production by Hindustan Aeronautics Limited (HAL).
Can India afford the F35? As per reports, the F-35 fighter is under scrutiny for escalating costs and performance issues. A 2024, US Government Accountability Office (GAO) report indicates that none of the F-35 variants—F-35A, F-35B, or F-35C—are meeting availability targets, with fleet readiness declining over the past five years. Projected lifetime sustainment costs have risen from $1.1 trillion in 2018 to $1.58 trillion in 2023. The US Air Force now estimates annual operating costs per aircraft at $6.8 million, surpassing the initial $4.1 million target.
Technical and manufacturing challenges persist. A $16.5 billion modernisation initiative aimed at upgrading radar, weapon systems, engine enhancements and software has repeatedly been delayed due to software stability issues.
While the F-35 represents a big advancement in military technology, its escalating costs and persistent issues raise questions about its suitability for nations like India, which must balance defencemodernisation with fiscal responsibility.
India will be skeptical over the deal following the lengthy delay in the delivery of GE F404 engines for the Tejas. Our aim in the long run is self-reliance. The route for self-reliance is a tedious process. It can be aided only by genuine transfer of technology partnerships, coupled with achieving technology threshold in critical areas. The trust factor is very important, and along with that comes the sincerity of giving us a complete package including ammunition, maintenance, and spares.
Conclusion
Buying defence equipment is never easy because of the numerous issues involved which include the price, sustenance costs, delivery schedules, supply chains for critical spares, transfer of technology, training and integration with existing systems and finally restrictive clauses of use.
The other challenge is maintaining multiple weapon systems with different origins as there is no commonality in ammunition, spares, oils, and lubricants amongst others. But to give credit to the Air Force it has over the years it has had fighter aircraft from Russia, France, and UK simultaneously.
India has been diversifying its military partnerships. Traditionally dependent on the Soviet Union and later Russia, India is shifting its focus towards the West, with the US and France as key partners. Though India has enhanced its own defence manufacturing capability with the participation of the private sector. Amongst the key challenges are, ensuring availability of sufficient investments and the induction of advanced technology, on a continuing basis for maintaining a competitive edge.
This shift has transformed India from being the largest defence importer to a more self-reliant nation, capable of exporting defence equipment to a growing number of countries. But the country faces several dilemmas in trying to reform its defence industry as the normal rules of market economics do not apply. While a lot is being done there are miles to go before we sleep.
ABOUT THE AUTHORS
Maj Gen VK Singh, VSM was commissioned into The Scinde Horse in Dec 1983. The officer has commanded an Independent Recce Sqn in the desert sector, and has the distinction of being the first Armoured Corps Officer to command an Assam Rifles Battalion in Counter Insurgency Operations in Manipur and Nagaland, as well as the first General Cadre Officer to command a Strategic Forces Brigade. He then commanded 12 Infantry Division (RAPID) in Western Sector. The General is a fourth generation army officer.
Major General Jagatbir Singh was commissioned into 18 Cavalry in December 1981. During his 38 years of service in the Army he has held various command, staff and instructional appointments and served in varied terrains in the country. He has served in a United Nations Peace Keeping Mission as a Military Observer in Iraq and Kuwait. He has been an instructor to Indian Military Academy and the Defence Services Staff College, Wellington. He is a prolific writer in defence& national security and adept at public speaking.
