India's Defence Capex May Reach ₹2.8 Trillion by FY30 as Drone Push Accelerates
India's defence spending on capital equipment could rise to ₹2.8 trillion by FY2030, driven by military modernisation, indigenous manufacturing and growing demand for drones and advanced weapons, according to a new Kotak Institutional Equities report. The outlook comes as the government intensifies efforts to expand domestic defence production and strengthen self-reliance.
ndia's defence sector is entering what analysts describe as a multi-year growth phase, supported by rising capital expenditure, expanding defence exports and a stronger emphasis on domestic manufacturing.
Kotak Institutional Equities has projected that India's defence capital expenditure (capex) could grow at an estimated 11% compound annual growth rate (CAGR) between FY2026 and FY2030, reaching approximately ₹2.8 trillion by the end of the decade. The brokerage attributed the outlook to continued military modernisation, higher indigenous procurement and strategic lessons drawn from recent conflicts.
The report comes as India's defence procurement strategy increasingly prioritises locally manufactured systems, including drones, air defence platforms, naval equipment and advanced surveillance technologies.
India defence capex FY30
The Indian government has accelerated several defence acquisition programmes in recent months.
Earlier this month, the Defence Acquisition Council (DAC) approved capital acquisition proposals worth about ₹52,000 crore, including anti-drone electronic warfare systems, surface-to-air missile systems, naval unmanned aerial systems and high-altitude surveillance platforms for the armed forces.
Separately, Reuters reported in June that India is preparing what could become its largest-ever military drone procurement programme, valued at more than $2 billion, with orders expected to be placed primarily with domestic manufacturers under an accelerated procurement process.
The government has also continued expanding indigenous defence manufacturing under the Aatmanirbhar Bharat initiative, with the Ministry of Defence encouraging greater participation by private industry and startups.
Official Statements
Speaking at the National Defence Industries Conclave earlier this year, Defence Minister Rajnath Singh said India should work in "mission mode" to become a global hub for drone manufacturing within the next few years. He stressed that an indigenous drone ecosystem is essential for strategic autonomy, defence preparedness and self-reliance.
According to the Ministry of Defence, hundreds of startups and MSMEs have joined the defence innovation ecosystem through the iDEX programme, supporting the development of new defence technologies.
Higher defence investment is expected to benefit India's public and private defence manufacturers, including companies involved in aircraft, naval platforms, missiles, electronics and unmanned systems.
The growing focus on domestic production could also strengthen India's defence export ambitions, reduce dependence on imported equipment and support long-term industrial development. Analysts say increased investment in drones reflects changing battlefield requirements observed in recent international conflicts, where unmanned systems have become increasingly important.
The Ministry of Defence is expected to continue issuing procurement orders under its indigenous acquisition programme, while several large drone and advanced weapons contracts are anticipated to move through the procurement process. Official timelines for future orders will depend on government approvals and tender procedures.
Breaking News Disclaimer
India defence capex FY30 is developing story. Information is based on verified reports, official statements and publicly available sources at the time of publication. UpdatedPlus.com will update this article as additional verified information becomes available.
