Union Budget 2026: Ex-DRDO Director On Defence Outlay Expectations, Rs 50k Cr Export Goal & More

Ahead of the Union Budget 2026, former-DRDO Director, Ravi Kumar Gupta, shared defence sector’s key expectations from the budget set to be tabled on February 1, 2026, including the roadmap ahead for India to become a net defence exporter.

On how India’s defence sector will play an active role in south Asian nation’s growth story, he said, “Our defence production has already crossed Rs 1.5 lakh crores and is rising rapidly, thanks to the present government’s stress on Aatmanirbharta.”

“A significant hike in the forthcoming budget for defence, both, in the capital and the revenue heads, commensurate with the worsening global security environment, combined with even higher stress on Aatma Nirbhar Bharat, will further contribute to Bharat’s growth story,” he added.

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India’s Defense Acquisition Council (DAC) has already approved capital acquisition proposals worth Rs 790 million in its winter session, taking FY26YTD approvals to Rs 3.3 trillion, nearly double the capital outlay on defence of Rs 1.8 trillion, according to a MOFS report.

To further boost self-reliance in the defence sector, the ex-DRDO official outlined a 3 pronged approach in terms of budgetary allocations.

1. Significant increase in defence budget for procurement of Make in Bharat defence systems, preparing the nation to face simultaneous multiple threats in multiple theatres.
2. Higher allocation for defence R&D taking it to around 8 to 10% of defence budget
3. Enhancing investments in defence related infrastructure. These include mobility, logistics, air and naval bases and training, as well as boosting the test and evaluation facilities.

Defence exports target for 2029 has been set to Rs 50,000 crore, which Gupta consider to be a “very modest” goal, as it makes up for only a fraction of global trade.

“In order to boost defence exports, the local manufacturers need financial stability and support. Sustained supply orders from our own defence forces are the biggest support in this direction. Thus, enhancing budget allocations for defence as stated above and reducing bureaucratic hurdles will go a long way in increasing defence exports,” the defence sector expert said .

“Startups and small entrepreneurs have immense potential to directly and indirectly contribute to defence exports, though they lack in financial strength to beat global competition. Creating budgetary provisions for extended such support will significantly boost our defence exports,” he noted. 

On what’s the immediate need of India’s defence vertical, the former DRDO official said, the Indian armed forces is still the biggest consumer of indigenously manufactured defence products. 

Further, he suggested that the present process of clearing products takes over 5 years due to bureaucratic clearances, making it economically unviable for private enterprises, and creating a higher reliance on importing warfare equipments. This makes policy changes in procurement of defence goods crucial. 

Meanwhile, he also highlighted the big-ticket items that need to be “sanctioned without further delays”. 

“Procurement of many IDDM products that have already cleared trials has been pending. This must be done and budgetary provisions be made accordingly  R&D programs like TEDBF, 6th Gen fighter aircraft and development of longer range ballistic missile (ICBMs) is need of the time. A national programme for indigenous design and development of wide range of Gas Turbine Engines needs to be initiated and funded, catering for complete range of fabrication, testing and evaluation ecosystem,” Gupta said.  

He also noted that items like “Aircraft Carriers, SSNs, need to be sanctioned without further delays.”