The decision to buy 114 Rafale aircraft at a cost of ₹3.25 lakh crore, 96 of which will be manufactured in India, is an event of exceptional significance. Along with the Tejas aircraft from Hindustan Aeronautics Ltd, the Rafales (36 of which are already in operation in India, with some being deployed by the Navy) will replace the ageing MiG 29 fleet of over 100 aircraft. France’s 4.5-generation Rafales could well become the backbone of India’s Air Force. India has scored a geopolitical point here, resisting US efforts to sell its F-35.
Efforts to indigenise the production of the Advanced Medium Combat Aircraft (fifth generation) with the involvement of private players also seem to suggest that Russia’s SU-57 may not take the centrestage, after all. This pivot affirms India’s multi-alignment in a fractious world. Besides multi-alignment, strategic autonomy is also being put into practise in defence procurement. According to the March 2025 report of the Parliamentary Standing Committee on Defence, 89 per cent of the contracts for defence equipment, finalised between March 2019 and December 2024, were signed with Indian vendors. India’s defence ecosystem is coming of age, despite issues of delayed deliveries; defence exports are in the region of ₹25,000 crore (with a two-third contribution from the private sector).
Indeed, the multi-pronged push to boost defence capabilities — acquiring aircraft, developing cyber warfare skills through the National Quantum Mission, building capacity in critical minerals, electronics and semi-conductors — acquired a sense of urgency after Operation Sindoor. This is reflected in the hike in defence outlay in the Budget. A 22 per cent rise in capital outlay to ₹2.19 lakh crore or 28 per cent of the total outlay of ₹7.84 lakh crore, marks a break from the past. This could entail higher spending on R&D, cyber warfare, unmanned systems and boosting exports. Both Operation Sindoor and the recent US action in Venezuela brought home the primacy of drone, satellite and precision warfare, marked by real-time intelligence. Even as India easily overcame Pakistan’s challenge in Operation Sindoor, what became obvious was the extent to which Pakistan benefited from Chinese technology and weaponry — a point flagged by the Ministry of Defence as it made a case for raising the defence budget to 2.5 per cent of GDP in late 2025.
The defence Budget allocation of ₹7.84 lakh crore is about 2 per cent of GDP and close to 14 per cent of the total Budget size. This reverses a decline on both counts since FY20. Since salaries and pensions account for half the defence budget, and will stay that way, large budgetary increases with an accent on modernisation are a must. In the present context, Operation Sindoor necessitated a replacement of ammunition and spares as well. Be that as it may, an integrated approach to defence, electronics and semi-conductors, as spelt out in recent policies and Budgets, is the way forward.
Published on February 13, 2026