Record Defence Budget Allocation Expected to Strengthen Border Infrastructure and Indigenous Defence Industry

As Union Finance Minister Nirmala Sitharaman prepares to present the Union Budget for the Financial Year 2025-26 on Saturday, February 1, expectations are high for the Ministry of Defence to receive its highest-ever budgetary allocation. The funds are set to focus on enhancing border infrastructure and further boosting India’s indigenous defence industry.

In the previous fiscal year (2024-25), the Ministry of Defence was allocated Rs 6,21,940.85 crore (around USD 75 billion), marking it as the highest-funded ministry in the budget. A substantial portion of the funds was directed toward the Border Roads Organisation (BRO), which received an allocation of Rs 6,500 crore. This was a 30% increase from the previous year and a staggering 160% rise from the 2021-22 budget.

For the 2025-26 budget, sources within the Ministry of Defence suggest that the BRO is expected to receive an even larger share of the funds. This boost comes as the government intensifies efforts to strengthen its border infrastructure in response to China’s aggressive development along the Line of Actual Control (LAC).

“The Government is steadfast in its commitment to improving border infrastructure. The Union Budget for the BRO will provide additional support to strategically significant projects, including last-mile connectivity in border areas,” a senior source within the Ministry of Defence stated.

This heightened focus on border infrastructure has been a priority for the government, particularly following the 2020 Galwan clash with China. In October 2024, Defence Minister Rajnath Singh inaugurated 75 new BRO infrastructure projects, valued at Rs 2,236 crore. These included roads, bridges, and other infrastructure across key border states such as Jammu and Kashmir, Ladakh, and Arunachal Pradesh, alongside projects in Uttarakhand, Sikkim, Himachal Pradesh, West Bengal, Rajasthan, Nagaland, Mizoram, and the Andaman & Nicobar Islands.

Since 2020, India has significantly ramped up its border infrastructure efforts, with the government increasing the BRO’s capital outlay by 40% in 2022-23. The completion of 102 infrastructure projects in high-altitude and extreme weather conditions in 2021, including the world’s highest motorable road at Umling La (19,024 feet), further illustrates the government’s commitment to border development.

The allocation for defence in 2024-25 was Rs 1 lakh crore (18.43%) higher than in 2022-23, with an increase of 4.79% over the previous year. A significant portion of this budget—27.66%—was designated for capital expenditure, with further allocations for operational preparedness, salaries, defence pensions, and civil organisations under the ministry.

Looking ahead, the 2025-26 budget is expected to continue reinforcing the government’s commitment to ‘aatmanirbharta’ (self-reliance) in defence technology and manufacturing. It is anticipated that the funds will support both the modernisation of the Armed Forces and the creation of job opportunities for the youth, contributing to both national security and socio-economic growth.

The budget is also expected to fund key strategic infrastructure projects that enhance India’s border security. Notable projects funded in previous years include the development of the Nyoma Airfield in Ladakh, the Shinku La tunnel in Himachal Pradesh, and the Nechiphu tunnel in Arunachal Pradesh. With a record defence budget on the horizon, similar projects are likely to see further progress, reinforcing India’s border security and self-reliance in defence manufacturing.