India’s 2024 defence budget: modernization and strategic growth in spotlight

As India consolidates its position in the global defence landscape, the upcoming budget is anticipated to provide crucial insights into the nation’s commitment to bolstering its defence capabilities.

As India continues to strengthen its position in global military strength rankings, expectations are high for significant announcements in the defence sector in the upcoming budget. India currently holds the fourth spot in the Global Firepower Military Strength Rankings 2024, surpassing nations like the United Kingdom and Japan. The rankings estimate India’s total military personnel at 5,137,550, positioning it as a major superpower in defence.

Finance Minister Nirmala Sitharaman is set to present the interim budget on February 1, and the defence sector is likely to be a focal point. In the 2023-24 financial year, India proposed $72.6 billion in defence spending, reflecting a 13% increase from the previous period’s initial estimates. The previous budget emphasized the addition of fighter jets and the development of infrastructure along the tense border with China.

Key expectations for the 2024 budget in the defence sector include:

  1. Continued Focus on Digitization, Modernization, and Indigenization: The government is expected to persist in its efforts to enhance digital capabilities, modernize the armed forces, and promote indigenous defence production.
  2.  Potential Increase in Defence Budget: Defence experts have advocated for an increase in the defence budget to around three per cent of the GDP. A significant budget hike is anticipated to meet contractual obligations, allocate resources for modernization, and address strategic needs.
  3. Addressing Salary Hikes and Pension Funds: The budget is likely to address the financial aspects, including salary hikes for military personnel and allocation for pension funds.
  4. Emphasis on Research and Development: Continuous investment in research and development is expected to be a priority, fostering innovation and technological advancements in the defence sector.
  5. Strategic Partnerships with Domestic Industries: The government may continue to strengthen strategic partnerships with domestic industries, encouraging the growth of the indigenous defence manufacturing ecosystem.

As India consolidates its position in the global defence landscape, the upcoming budget is anticipated to provide crucial insights into the nation’s commitment to bolstering its defence capabilities.