Archive · 14 Jan 2026
India's Defence Budget and PSU Reforms
India is planning to spend more money on defence and other important areas in the upcoming budget.
The government wants to make the country stronger and more self-reliant.
They are also planning to make changes to public sector banks, like merging smaller banks to create bigger and stronger ones.
This is to help the economy grow in a healthy way.
The budget will focus on areas like defence, infrastructure, and healthcare, and there won't be any big changes in taxes or populist measures.
The government is also looking to sell parts of some big companies, like LIC, to the private sector.
All these changes are aimed at making India's economy stronger and more competitive.
India's defence budget for 2025 is Rs 6.81 trillion, with expectations of further increases.
Domestic procurement for defence has risen to 75%, up from less than 60% five years ago.
Defence-linked stocks and mutual funds have seen significant growth due to increased defence spending.
Three notable defence-focused mutual funds are Invesco India PSU Equity Fund, HDFC Defence Fund, and Canara Robeco Manufacturing Fund.
The government plans to increase capital expenditure in defence and allied sectors, with a 15% increase in defence capex expected in FY27.
- Who
- Indian government and investors
- What
- Increased defence spending and PSU reforms
- When
- Budget 2026 and beyond
- Where
- India
- Why
- Long-term growth and strategic resilience
- Defence Budget 2025
- Rs 6.81 trillion
- Domestic Procurement Percentage
- 75%
- Export Target by FY30
- Rs 500 billion
- Invesco AUM
- Rs 14.49 billion
- HDFC Defence Fund AUM
- Rs 73.91 billion
- Canara Robeco AUM
- Rs 16.42 billion
- Invesco CAGR (10 years)
- 17.87%
- HDFC Defence Fund Return (1 year)
- 13.09%
- Canara Robeco Return (1 year)
- 2.74%
- Expected Capex for FY27
- Rs 12.4 lakh crore
- Expected Defence Capex Increase
- 15% over FY26