Fortifying India: Reading Between the Lines of the 2025 Defence Budget

Posted on 12th August, 2025 (GMT 07:35 hrs)

ABSTRACT

In the shadow of escalating geopolitical tensions, India’s defense strategy for the fiscal year 2025-26, with a staggering Rs 681,210 crore budget (13.45% of the Union Budget), perpetuates a militaristic paradigm that prioritizes arms over human and ecological well-being. This allocation, blending indigenous manufacturing (e.g., Tejas, BrahMos) with heavy reliance on imports (e.g., Rafale, S-400), is marred by historical corruption scandals (Bofors, Coffin, Rafale) and shrouded covert operations via entities like the Special Frontier Force (SFF) and Research and Analysis Wing (RAW). Meanwhile, external debt servicing at USD 682.2 billion (19.2% of GDP) drains fiscal resources, exacerbating economic distress marked by bankruptcies, rising poverty, and wealth concentration among crony elites. Findings reveal that this defense-centric approach ignores profound ecological devastation, agrarian crises, and hunger epidemics, diverting public taxes to fuel a predatory military-industrial complex. War-mongering, akin to manufactured religious pogroms by the current political executive, fosters a false nationalistic fervor, sustaining a debt-ridden global techno-economic system that benefits tycoons while neglecting climate resilience, public health, and equitable flourishing.

Keywords: India defense budget, external debt, indigenous defense manufacturing, defense imports, corruption scandals, covert operations, ecological devastation, economic distress, disarmament

“That a political party which works for the defense and growth of capitalism is called “Socialist,” and a despotic government “democratic,” and a rigged election “free” are familiar linguistic-and political-features which long predate Orwell.” — Herbert Marcuse, One-Dimensional Man (1964)

1. Introduction

Amid a volatile geopolitical landscape riddled with engineered tensions along borders with China and Pakistan, India’s defense posture for 2025–26 masquerades as a necessity, channeling Rs 6,81,210 crore (USD 78.4–78.8 billion)—13.45% of the Rs 50,66,857 crore Union Budget and 1.9% of GDP—into militarism (Press Information Bureau, 2025). Yet, this expenditure unfolds against a backdrop of crippling fiscal strains: interest payments devour nearly a quarter of government outlays, while external debt surges to USD 736.3 billion (19.1% of GDP) by March 2025 (Times of India, 2025; Economic Times, 2025).

Drawing from the military-industrial complex theory, which warns of the undue influence of defense contractors and policymakers in perpetuating endless armament, India’s procurement strategy mixes homegrown systems like the Tejas LCA and Dhanush artillery with foreign acquisitions such as Rafale jets and S-400 defenses. These are tainted by scandals like the Bofors affair of the 1980s, the 2000–01 Coffin scam, and Rafale deal controversies that undermine public faith. Covert elements, including the SFF and RAW, operate in secrecy, hidden under security pretexts, aligning with dependency theory where reliance on imported technology entrenches neocolonial economic ties.

The true cost of this militarism beyond reported statistics is incalculable, siphoning resources from climate resilience, healthcare, rural revival, and ecological restoration. Framed as security, it props up a performative nationalism that distracts from ecological collapse, farmer bankruptcies, soaring poverty, and wealth hoarding by crony elites. By tethering the economy to war machinery, the state weaponizes defense spending as a tool for dissent suppression, equating security with destruction rather than peace and sustainability. In an era of rising hunger and environmental ruin, border tensions serve crony interests, mirroring religious pogroms orchestrated by the current political executive to perpetuate a predatory, debt-fueled techno-economic order where profits from conflict eclipse human needs. This phenomenon can be understood through Marxist notions of false consciousness, where nationalist fervour blinds the populace to their exploitation, channeling taxes into elite coffers instead of social welfare.

2. Analysis of India’s 2025-26 Defense Budget

India’s 2025-26 defense budget, unveiled on February 1, 2025, by the Ministry of Finance, totals Rs 681,210 crore (approximately USD 77.4 to 78.8 billion), marking a 9.53% hike from 2024-25 (Press Information Bureau, 2025; Delhi Policy Group; Reuters). As of August 12, 2025, this budget fuels the fiscal year from April 1, 2025, to March 31, 2026.

Category	Percentage	Amount (Rs crore)
Defense Budget	13.45% (reported = actual?)	6,81,210
Other Union Budget Sectors	86.55%	43,85,647

Context and Significance

This allocation, justified by think tanks like the Delhi Policy Group as vital for “modernization” against foes like China and Pakistan, reserves 75% of modernization funds for domestic procurement under “Viksit Bharat @ 2047” (Press Information Bureau, 2025; Reuters, 2025). As the largest ministerial outlay at 13.45%, it eclipses urgent imperatives like climate adaptation and poverty alleviation, entrenching a military-industrial nexus where growth and legitimacy hinge on perpetual conflict readiness. This distracts from real crises: ecological devastation from deforestation and pollution, economic distress with widespread bankruptcies in the public sector, rising poverty amid wealth concentration, and hunger affecting millions, all while borders are inflamed to benefit war-profiteering tycoons in a crony landscape. From a green theory perspective in international relations, this militarism expands India’s ecological footprint, prioritizing destructive hardware over sustainable security frameworks that address climate vulnerabilities as THE felt existential threat.

Breakdown

Per the Press Information Bureau and Delhi Policy Group, the budget divides as follows:

Component	Amount (Rs crore)	Percentage of Total	Notes
Total Defense Budget 2025-26	6,81,210.27	100%	9.53% increase from FY 2024-25, 13.45% of Union Budget
Capital Outlay on Defense Services	1,80,000	26.43%	4.65% higher than FY 2024-25 BE, focus on modernization
Capital Acquisition (Modernization)	1,48,722.80	–	Includes R&D and infrastructure, 75% for domestic procurement
Domestic Procurement from Industries	1,11,544.83	–	75% of modernization budget, includes Rs 27,886.21 crore for private
Revenue Expenditure for Armed Forces	3,11,732.30	45.76%	10.24% higher than FY 2024-25, for pay, sustenance, operations
Defense Pension	1,60,795	23.60%	13.87% higher than FY 2024-25, includes OROP for 34 lakh pensioners
Ex-Servicemen Contributory Health Scheme (ECHS)	8,317	–	19.38% higher than FY 2024-25 BE, for ex-servicemen healthcare
Defense R&D Budget (DRDO)	26,816.82	3.94%	12.41% higher than FY 2024-25, includes Rs 14,923.82 crore for capital
iDEX Scheme Allocation	449.62	–	For innovation, nearly tripled in two years, includes ADITI sub-scheme
Indian Coast Guard Capital Budget	5,000	–	43% jump from FY 2024-25 (Rs 3,500 crore)
Indian Coast Guard Total Budget	9,676.70	–	26.50% higher than FY 2024-25, includes Rs 4,676.70 crore for revenue
Border Roads Organisation (BRO) Capital Allocation	7,146.50	–	9.74% higher than FY 2024-25 BE, for border infrastructure development

Comparative Analysis and Challenges

With a 7.8% CAGR in capital acquisition since 2016–17 (MP-IDSA, 2025), defense lingers at 1.9% of GDP, insufficient per Delhi Policy Group, as 72% goes to pensions and salaries. This imbalance stalls a holistic notion of progress, favouring a status quo that profits elites while sidelining poverty reduction and environmental safeguards (Reuters, 2025). Applying dependency theory, this reliance on foreign tech imports reinforces economic subordination, where crony capitalists benefit from deals that deepen debt without fostering genuine self-reliance.

Policy Implications and Future Outlook

Domestic procurement (Rs 1,11,544.83 crore) and iDEX (Rs 449.62 crore) tout self-reliance, but hikes in Coast Guard (26.5%) and BRO (9.74%) entrench border militarization. As Laxman Behera notes (Reuters, 2025), modest capital rises fail to address tensions, instead fueling a crony system where war industries thrive on public funds, diverting from health and education amid rising hunger and ecological crises. This aligns with theories of nationalism as ideology, where state-orchestrated patriotism masks class exploitation.

2. Analysis of Transport Costs in India’s 2025-26 Defense Budget

Transport costs for arms and ammunition, embedded in military logistics, are subsumed under broader categories, reflecting the opacity of a system that prioritizes destruction over long-term nourishing of the basic means of life’s subsistence.

Transport Costs

From Press Information Bureau and PRS India, we get the following:

Component	Amount (Rs crore)	Percentage of Total	Notes
Total Defense Budget 2025-26	6,81,210.27	100%	9.53% increase from FY 2024-25, 13.45% of Union Budget
Capital Outlay on Defense Services	1,92,388	28.25%	Includes acquisition of arms, ammunition, and equipment, may cover logistics infrastructure
Revenue Expenditure for Armed Forces	3,11,732.30	45.76%	For pay, sustenance, operations, likely includes some logistics costs
Defense Pension	1,60,795	23.60%	13.87% higher than FY 2024-25, includes OROP for 34 lakh pensioners
Other Expenses	59,181	8.69%	Includes spending on transportation, Rashtriya Rifles, Agnipath scheme, and other establishment expenditure

“Other Expenses” (Rs 59,181 crore) likely encompasses transport, per PRS India, though not isolated, mirroring a lack of transparency that allows crony profits while ecological costs—like carbon emissions from logistics—soar unchecked. Capital outlay (Rs 1,92,388 crore) may include procurement logistics, as noted in Standing Committee on Defence (2019) reports on shortfalls and DAP 2020 amendments. Within environmental security frameworks, these hidden costs contribute to global warming, undermining long-term human security far more than any border skirmish.

Comparative Analysis and Challenges

A 7.8% CAGR since 2016-17 contrasts with 1.9% GDP share, critiqued by Delhi Policy Group for limiting development amid 72% manpower costs (Reuters). This perpetuates import reliance, ignoring bankruptcies in local economies and poverty spikes, consistent with military-industrial complex critiques where perpetual readiness serves corporate interests over broader societal needs.

Policy Implications and Future Outlook

Domestic focus could cut transport via local production, but iDEX (Rs 449.62 crore) indirectly bolsters logistics for elites. Behera (Reuters, 2025) warns marginal increases won’t suffice, as debt servicing drains resources from climate and social needs in a hunger-plagued nation. This underscores the need for a peace dividend framework, redirecting funds toward disarmament .

3. Comparison: Budgets for Education, Health with Defense Budget

The 2025-26 Union Budget starkly favors defense (Rs 681,210 crore) over education (Rs 128,650 crore) and health (Rs 98,311 crore), highlighting a misalignment that exacerbates social woes while borders burn with manufactured conflicts.

Budget Comparison

Sector	Allocation (₹ crore)	Share of Union Budget	Key Notes
Defence	6,81,210	13.45%	Highest allocation; up 9.53% from FY 2024-25; includes transport costs categorized under “Other Expenses” (₹ 59,181 crore).
Education	1,28,650	2.54%	Up 6.22% from FY 2024-25; supports AI, skill development, and school infrastructure.
Health	98,311	1.94%	Enhances medical education and healthcare infrastructure.
Climate Finance	3,412	0.07%	Allocation to Ministry of Environment, Forest & Climate Change; includes pollution control, afforestation, wildlife programs.

Percentage Comparison

Defense (13.45%) towers over education (2.54%) and health (1.94%), with combined social sectors at 4.48% vs. “Other Sectors” (82.07%, Rs 41,58,686 crore).

Category	Percentage	Amount (Rs crore)
Defense	13.45%	6,81,210
Education	2.54%	1,28,650
Health	1.94%	98,311
Other Sectors	82.07%	41,58,686

Contextual Insights

Defense’s dominance (1.9% GDP) prioritizes tensions with China/Pakistan, but falls short of 2.5–3% for so-called “modernization” (hyper-industrial, extractivist, consumerist “development”?!), with 72% on pensions/salaries. Education’s 6.22% rise aids NEP 2020, yet at 4.6% GDP, it lags targets amid implementation hurdles. Health’s modest share expands medical seats but underserves access needs. This disparity reflects opportunity cost theory in economics, where defense crowds out investments in human capital, perpetuating cycles of poverty and inequality.

4. Key Points on Covert Variables in India’s Defense

Research indicates covert elements like intelligence and special forces bolster defense, yet they obscure accountability, diverting from real threats like climate collapse.

Beyond visible spending, covert activities—intelligence, operations, cyber defense—sustain security, funded opaquely within the Rs 681,210 crore budget.

Key Organizations

• Special Frontier Force (SFF): Paramilitary under RAW, Tibetan refugee-based, for border ops against China.
• Research and Analysis Wing (RAW): External intelligence for espionage in Pakistan/China.

Other Covert Activities

Cyber ops protect infrastructure; diplomatic/economic measures aid objectives, all classified.

Context and Funding

Likely budgeted secretly, these perpetuate militarism, ignoring economic distress and environmental neglect. In theoretical terms, they embody shadow state frameworks, where unaccountable power structures advance elite agendas under the guise of national interest.

5. Analysis of Covert Variables in India’s Defense

India’s Rs 681,210 crore defense allocation (13.45% of Rs 50,66,857 crore Union Budget) as of August 12, 2025, masks covert variables amid tensions, diverting from eco-social imperatives.

Context and Significance

Covert factors—intelligence, special ops, cyber—complement overt efforts, managed by RAW and SFF, under PMO/MHA. This opacity aligns with securitization theory, where threats are constructed to justify exceptional measures, often at the expense of democratic oversight and alternative peace-building approaches.

Key Covert Variables

• SFF: 10,000 personnel for guerrilla ops post-1962 war, under RAW for border intel.
• RAW: Post-1962/1965, espionage like 1971 Bangladesh support, Kahuta infiltration.
• Other: NTRO cyber espionage; special forces strikes (2016/2019); covert diplomacy.

Funding and Budgetary Implications

Classified within budget (e.g., DRDO Rs 26,816.82 crore), estimated RAW at Rs 1,500-2,000 crore.

Comparative Analysis and Challenges

Covert ops add depth but lack transparency, echoing scams (Rafale, Bofors), risking corruption in a crony system that profits from secrecy while poverty rises. This challenges liberal peace theories, which advocate transparency and civil society involvement over clandestine militarism.

Policy Implications and Future Outlook

Self-reliance may enhance covert tech, but modest capital (4.65% rise) limits, per Behera (Reuters, 2025). These sustain false security narratives, mirroring pogroms to uphold predatory economics.

5. India’s External Debt And Defense Expenditure

For 2025-26, defense (Rs 681,210 crore, USD 78.4-78.8 billion) contrasts with external debt (USD 682.2 billion, Rs 57.3 lakh crore as of December 2024), highlighting fiscal misprioritization amid social neglect.

External Debt

Total: USD 682.2 billion (8.3% up from 2023), 19.2% GDP.

Composition: Commercial 37.2%, NRI deposits 19.5%, short-term 17.9%, multilateral/bilateral 22.7%. Debt service 5.8%.

Context: Sustainable with reserves (USD 675.6 billion). This fits debt-trap diplomacy frameworks, where borrowing sustains militarism but entrenches vulnerability to global creditors.

Defense Expenditure

1.9% GDP, up 9.53%.

Breakdown: Capital Rs 180,000 crore (26.4%), revenue Rs 311,732 crore (46%), pensions Rs 160,795 crore (24%), other Rs 59,181 crore (transport included).

Context: Emphasizes self-reliance, but high costs limit, per Behera (Reuters).

Warning from the IMF:
The International Monetary Fund (IMF) warned in its 2023 Article IV consultation report that India’s general government debt could exceed 100% of GDP in the medium term due to high long-term risks, particularly from significant investments needed for climate change mitigation and resilience against natural disasters. The IMF suggested new concessional financing, private sector investment, and carbon pricing to address these challenges. It also noted risks from global economic slowdowns, supply disruptions, and domestic weather shocks, while highlighting potential growth from strong consumer demand and private investment. The IMF reclassified India’s exchange rate regime as a “stabilised arrangement,” citing central bank interventions.

The Indian government, however, contested the IMF’s assessment. K.V. Subramanian, India’s IMF executive director, called the 100% debt-to-GDP projection “extreme,” arguing that sovereign debt risks are limited since it is predominantly denominated in domestic currency. He noted India’s public debt-to-GDP ratio has remained stable, fluctuating from 81% in 2005-06 to 84% in 2021-22, and back to 81% in 2022-23, despite global shocks. The government emphasized exchange rate flexibility and disputed the IMF’s exchange rate reclassification. Finance Minister Nirmala Sitharaman had earlier (October 2023) stated efforts to reduce government debt, which stood at Rs 155.6 trillion (57.1% of GDP) in March 2023. The IMF acknowledged India’s economic optimism, projecting 6.3% growth for 2023-24 and 2024-25, potentially higher with structural reforms.

IMF Warns India on Debt Concerns, Says It May Exceed 100% of GDP VIEW HERE ⤡ (As reported on 20/Dec/2023 ©The Wire)

Contextual Analysis

Defense boosts (e.g., BRO Rs 7,146.5 crore) fuel border tensions, but 1.9% GDP is inadequate for threats, with high pensions limiting funds. Debt (19.2% GDP) is manageable, but servicing outpaces social budgets, in a crony setup where war profits distract from poverty and ecology. This exemplifies fiscal illusion theory, where debt-financed militarism hides true costs from taxpayers.

India’s defense eclipses social sectors, with debt servicing amplifying strains, perpetuating a system where manufactured conflicts serve elite interests over disarmament and equity.

6. India’s Defense Arsenal and Corruption Challenges: Indigenous Manufacturing or Foreign Imports?

India’s arsenal reportedly/projectedly mixes indigenous efforts with imports, but systemically perpetuated corruption scandals underscore a military-industrial complex that profits elites while ignoring ecological and economic catastrophes.

Weapons and Planes Manufactured in India

Driven by Make in India, yet highly import-dependent:

• Tejas LCA: HAL/DRDO, 40+ delivered, engine imports.
• ALH Dhruv: HAL, 300+ units, Shakti engines (France co-dev).
• LUH: HAL, 240 ordered.
• AMCA: DRDO/HAL, prototype by 2028-30.
• Arjun MBT: DRDO/HVF, 118 Mk-1A.
• Pinaka MBRL: DRDO/Tata/L&T, 90km range.
• ATAGS: DRDO/Bharat Forge/Tata, 307 approved.
• Astra Missile: DRDO, 110km BVR.
• BrahMos Missile: Indo-Russian JV, exported.
• INS Vikrant: CSL, operational.

Challenges: Low R&D (Rs 26,816.82 crore), delays, 50-60% imports, corruption risks. This self-reliance rhetoric masks structural adjustment frameworks imposed by global institutions, where domestic production still feeds into profit-driven cycles in favour of the parasitic global economy.

Licensed Production

• Su-30MKI: Russia/HAL, 272 units.
• T-90S: Russia/HVF, 1,250+.
• Dhanush Gun: Bofors-based.
• AL-31FP Engines: Russia/HAL.

Defense Equipment Borrowed or Imported from Other Countries

Largest importer (9.8% global, SIPRI 2019-23; Russia 36%, France 33%, USA 13%):

• Rafale: France, 36+26M, USD 9.4+7 billion; losses reported May 2025.
• MiG-29/29K: Russia, low availability; losses May 2025.
• Su-30MKI (Imported): Russia, losses May 2025.
• C-17, C-130J: USA.
• Chinook, Apache: USA.
• S-400: Russia, 5 squadrons.
• Barak-8: Israel/DRDO.
• Spike ATGM: Israel.
• AK-203: Russia co-prod.

Borrowed/Leased:

• MQ-9B Drones: USA, 2 leased, 31 pending.
• INS Chakra II: Russia, returned 2021.
• T-72 (Historical): Soviet.

Dependency bridges gaps but fuels scandals, delaying self-reliance, and exemplifying arms race theory where escalation benefits suppliers over peace.

Corruption Challenges

• Bofors Scandal (1980s): Kickbacks in Swedish gun deal, eroding trust.
• Rafale Deal (2016): Allegations of crony favoritism, offsets to allies.
• Coffin Scam (2000-01): Overpriced coffins during Kargil.

Reforms (DAP 2020) aim transparency, but opacity persists, enabling crony profits in a system where war distracts from poverty, bankruptcies, wealth gaps, and ecological havoc. Tensions, like religious divides, sustain this predatory order, channeling taxes to tycoons instead of disarmament, health, education, and sustainability.

7. Conclusion

India’s 2025-26 defense strategy, ensnared in a web of bloated budgets, import dependencies, covert machinations, and corruption, exemplifies a flawed paradigm that sacrifices societal and ecological health for illusory security. Theoretical lenses—from the framework of military-industrial complex exposing elite profiteering, to Marxist false consciousness unveiling nationalist distractions, dependency theory highlighting neocolonial traps, and green frameworks underscoring environmental costs—reveal how this militarism perpetuates inequality, debt burdens, and crises like hunger and bankruptcy. As borders simmer with engineered conflicts akin to domestic pogroms, public resources are funneled to crony tycoons, sustaining a global techno-economic system on the brink.

A coherent path forward demands disarmament: reallocating funds to education, health, and climate resilience, fostering genuine self-reliance through peace-building and equitable development. By dismantling this predatory cycle, India can transcend false narratives, prioritizing human and other-than-human flourishing over perpetual war, and charting a sustainable future where security means harmony with people and planet, not dominance through destruction.

Post-Script: India’s Unstable Cart of Cartographies

India’s cartographic boundaries are often depicted inconsistently across international platforms, creating confusion about the country’s actual territorial extent. Disputed regions—such as those occupied by China, claimed in Arunachal Pradesh or Ladakh, or contested with Pakistan—are represented differently depending on the source, reflecting both diplomatic tensions and geopolitical stakes.

These inconsistencies are not merely technical; they intersect with political narratives, including ideological visions of an expanded “Akhand Hindu Rashtra” and the economic illogic of neoliberal statecraft. Historical decisions, such as the reluctance to negotiate territorial disputes after the 1962 Sino-Indian war, reveal how national security, political image, and public perception intertwine in the handling of borders.

References

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