India’s Defence Modernisation Drive: Ambition Without Alignment
The government's ambitious pursuit of defence modernisation is emblematic of a deeper governance issue: a mismatch between fiscal capacity, institutional coherence, and geopolitical ambition. While the eye-catching budgetary allocation for FY 2026-27 and recent procurement policies signal intent, a closer scrutiny reveals enduring structural challenges in implementation, accountability, and sustainability.
The Institutional Landscape: India's Defence Framework
India’s defence planning ostensibly rests on the foundation of three pillars: the Defence Acquisition Procedure (DAP) 2020, the Atmanirbhar Bharat initiative promoting domestic production under the Defence Industrial Corridors, and the union budget allocations made annually. For FY 2026-27, the defence budget has been increased to Rs. 6.63 lakh crore, with Rs. 1.62 lakh crore earmarked for capital expenditure — a steep 12.95% rise over the previous year.
Additionally, the Defence Ministry has streamlined procurement processes through digitised platforms and rolled out a new ‘Urgent Procurement Scheme’ for emergency buys. However, section-level operationalisation remains patchy, as illustrated by delays in executing the Strategic Partnership Model (SPM) for private sector involvement.
Crucially, procurement and manufacturing policies hinge on the Defence Research and Development Organisation (DRDO), which has faced long-standing criticisms over inefficiency and delays. An audit by the Comptroller and Auditor General (CAG) in 2025 noted that only 30% of DRDO projects were completed within their original timelines. This level of institutional stagnation undermines the claims of self-reliance and modernisation.
The Argument: Data Reveals the Cracks
The headline figure of Rs. 6.63 lakh crore is indeed striking, making India the fourth-largest defence spender globally. But what lies beneath these numbers? A disproportionate portion of the budget — over 55% — is allocated to salaries and pensions. Capital expenditures, while increased, remain insufficient to meet India’s stated goal of overhauling obsolete inventory, including artillery systems and naval platforms. For example, out of the 41 naval ships sanctioned for procurement, only 18 have been commissioned since 2015. Such delays amplify concerns about readiness in the face of China’s expanding naval fleet.
While the Ministry of Defence projects confidence in domestic manufacturing, India’s share of indigenous equipment in total defence imports remains below 30%, as per the Stockholm International Peace Research Institute (SIPRI). Atmanirbhar Bharat rhetoric often papers over persistent dependency on foreign Original Equipment Manufacturers (OEMs). The collaboration with French firm Naval Group on Scorpène submarines epitomises this uneasy balance between ambition and capacity.
In addition to delayed execution, bureaucratic bottlenecks compromise India’s ability to rapidly respond to dynamic regional pressures. Consider the sluggish pace of implementing recommendations from the 2019 Shekatkar Committee, which proposed rationalising manpower costs and streamlining defence logistics. Out of 99 actionable points, fewer than 40 have shown measurable progress by 2026.
Counter-Narrative: Is Incremental Progress Sufficient?
Defenders of the prevailing policy direction argue that Rome wasn’t built in a day, and neither will India’s defence infrastructure. They cite incremental progress such as the commissioning of INS Vagsheer in 2024 and the induction of Rafale jets as tangible markers of success. Moreover, proponents of the Atmanirbhar Bharat initiative point to growing investments in micro, small, and medium enterprises (MSMEs) within the defence ecosystem, which saw a 25% increase in participation through the Defence Industrial Corridors this year.
While such arguments are valid in isolation, they fail to address the broader structural inefficiencies that erode overall outcomes. The reliance on short-term successes, such as emergency procurement systems, risks overshadowing the need for sustained capacity building. With China’s defence budget reaching a staggering $229 billion, incremental progress may be grossly inadequate to counterbalance regional asymmetry in the Indo-Pacific.
International Perspective: A Lesson from South Korea
South Korea’s defence modernisation drive offers instructive parallels to India’s ambitions but underscores stark differences in execution. Like India, South Korea aspires to reduce dependency on imports and bolster domestic production. However, Seoul’s ‘Defence Reform 2.0’ leverages transparent procurement mechanisms and robust private-sector participation through its Agency for Defense Development (ADD). As of 2026, indigenous systems constitute 75% of South Korea’s arsenal, bolstered by thriving exports amounting to $17 billion annually. What India’s DRDO struggles with — efficient R&D outcomes — South Korea addresses through decentralised collaboration with universities and corporations.
Institutional Critique: Accountability and Coherence
India's defence strategy suffers from two major institutional deficiencies. First is the lack of inter-agency coherence, wherein the DRDO, defence ministry, and private players operate in silos rather than symbiosis. Second is the chronic absence of accountability mechanisms. The CAG has repeatedly flagged non-compliance in audit reports, yet penal consequences remain elusive. Even the National Security Council appears underutilised as a strategic coordination body.
The elephant in the room remains regulatory capture by entrenched bureaucracies, which stymie innovation or private sector entry. The Strategic Partnership Model, originally meant to fast-track private-sector involvement, has devolved into prolonged processes that deter industry confidence.
Assessment: Aligning Ambition with Governance
Where does this leave India’s defence modernisation drive? The numbers may rise, and headlines soar, but without addressing structural inefficiencies, incremental progress will remain the glass ceiling. Immediate reforms should focus on streamlining procurement under a unified framework, decentralising R&D partnerships, and negotiating more equitable licensing contracts with OEMs.
The realistic next steps involve empowering MSMEs through local innovation subsidies, fast-tracking Shekatkar Committee recommendations, and pushing for an independent oversight body to audit defence policies. If India intends to meet its stated goals of regional dominance and self-reliance, ambition must be matched by alignment — fiscal, institutional, and operational.
- Question 1: What percentage of India's Rs. 6.63 lakh crore defence budget for FY 2026-27 is allocated to capital expenditure?
- a) 25%
- b) 50%
- c) 12.95%
- d) 24.42%
- Correct Answer: d) 24.42%
- Question 2: Which of the following committees recommended rationalising manpower costs and defence logistics?
- a) Kasturirangan Committee
- b) Shekatkar Committee
- c) Subramaniam Committee
- d) Kelkar Committee
- Correct Answer: b) Shekatkar Committee
Practice Questions for UPSC
Prelims Practice Questions
- Statement 1: The defence budget is Rs. 6.63 lakh crore.
- Statement 2: Over 55% of the budget is allocated for capital expenditures.
- Statement 3: There is a 12.95% increase in capital expenditure compared to the previous year.
Which of the above statements is/are correct?
- Statement 1: There are significant bureaucratic delays in the Strategic Partnership Model.
- Statement 2: India’s domestic production accounts for over 50% of its defence needs.
- Statement 3: The emergency procurement systems have proved fully effective.
Which of the above statements is/are correct?
Frequently Asked Questions
What challenges does India face in its defence modernisation drive?
India's defence modernisation faces several challenges, including a mismatch between fiscal capacity, institutional inertia, and geopolitical goals. Despite significant budgetary allocations, structural inefficiencies in procurement processes and a reliance on foreign manufacturers hinder timely upgrades and self-reliance.
How does the Atmanirbhar Bharat initiative contribute to India's defence capabilities?
The Atmanirbhar Bharat initiative aims to bolster domestic production within India's defence sector by promoting investment in indigenous manufacturing. However, while it has seen a rise in participation from micro, small, and medium enterprises, reliance on foreign equipment remains a significant challenge, limiting overall self-sufficiency.
What were the findings of the CAG audit on the Defence Research and Development Organisation (DRDO)?
The CAG audit revealed that only 30% of DRDO projects were completed within their original timelines, highlighting issues of inefficiency and delays in project execution. This underperformance raises concerns about the DRDO's capability to meet India's defence needs and self-reliance objectives.
What percentage of India’s defence budget is allocated to salaries and pensions, and what impact does this have?
Over 55% of India’s defence budget is allocated to salaries and pensions, which significantly limits the capital expenditure available for modernisation and procurement of new equipment. This allocation can jeopardize the military's operational readiness against growing regional threats, particularly from countries like China.
How does South Korea's defence modernisation approach differ from India's?
South Korea's defence modernisation strategy, particularly through its 'Defence Reform 2.0', emphasizes efficient procurement processes and higher domestic production, resulting in 75% indigenous military systems. This contrasts sharply with India, where bureaucratic challenges have led to delays and continued dependence on foreign suppliers.
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