India’s cumulative defense spending to reach $543.1 billion during 2026-30, driven by need for modernization, forecasts GlobalData

India has embarked on a comprehensive and multi-dimensional defense modernization initiative, driven by the need to enhance its qualitative edge over Pakistan and address capability gaps exposed during the recent Operation Sindoor, in which India targeted terrorist infrastructure within Pakistan. The operational challenges faced by the Indian military were further exacerbated by China’s alleged support for Pakistan in the form of military hardware, surveillance, and logistics during India’s operation. Against this backdrop, the country’s cumulative defense spending to reach $543.1 billion during 2026-30 forecasts GlobalData, a leading data and analytics company.

GlobalData’s latest report, “India Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2025-30,” reveals that of the projected India’s defense spending, the acquisition budget is estimated to account for approximately 31%. Additionally, in response to the need to replenish munitions expended during Operation Sindoor, the Indian government has sanctioned emergency funding of $6 billion (INR 500 billion). This funding is expected to be allocated for the urgent procurement of weapon systems, including ammunition, air defense systems, surveillance systems, missiles, and loitering munitions, among others.

During the operation, the Indian Air Force reportedly suffered combat losses, compelling the country’s policymakers to reassess its military preparedness levels. The urgency to swiftly overcome these vulnerabilities, particularly in light of a potential two-front war with its hostile neighbors, has led India to significantly increase defense modernization funding.

Abhijit Apsingikar, Aerospace & Defense Analyst at GlobalData, comments: “The persistent threat of cross-border terrorism originating from Pakistan has compelled India to take comprehensive measures to mitigate this risk. There will likely be an emphasis on acquiring relatively smaller yet more survivable surveillance platforms, and the Indian Ministry of Defense (MoD) is expected to expand its initial order for six Netra Mk-1A airborne early warning and control (AEWC) aircraft and expedite their induction for wider deployment.

“The MoD is also anticipated to acquire another variant of this aircraft, namely the Netra Mk-2, over the next few years, which will feature a larger radar for conducting surveillance over a longer range. Similarly, the Indian government is likely to approve the acquisition of a dedicated electronic warfare aircraft capable of performing signals intelligence and communications intelligence roles. The expedited development of long-range stand-off missiles and munitions, particularly air-to-air missiles, is expected to be prioritized, with projects like the Astra MK-III receiving specific attention.”

Furthermore, the Indian MoD is in the process of approving a follow-on order for an additional 97 Tejas Mk-1A multirole fighter aircraft, in addition to the 83 already ordered in 2021. The MoD is also anticipated to accelerate the Super Sukhoi modernization program, with upgraded fighters receiving new GaN AESA radars, enhanced engines, new decoys, and stand-off jammers.

Likewise, the Indian Army has started integrating a platoon of First-Person View UAVs within each infantry battalion. Efforts are also underway to expand the usage of Unmanned Ground Vehicles (UGVs) during the Indian Army’s offensive and defensive operations. Additionally, the Indian Army is likely to undertake an extensive retrofit upgrade of its armored forces, which are slated to receive modular armor, thermal imaging/night vision sensors, upgraded power packs, active protection systems, and integrated UAV support.

Moving forward, the focus will likely be on reducing the pace of force mobilization, with the Indian Army concentrating on developing more compact and easily mobilized fighting formations. Restructuring logistics will also take precedence, and the Army may invest in developing infrastructure for the pre-positioning and stocking of military weapons and equipment in dedicated, secured warehouses near the borders.

Apsingikar continues: “On the maritime front, the Indian Navy may prioritize the procurement of additional P-8I Poseidon Maritime Patrol Aircraft and focus on accelerating the induction of C-295 based patrol aircraft to augment its medium-range maritime reconnaissance capabilities. Having already tested the Matangi autonomous Unmanned Surface Vessel (USV) concept in December 2024, the Navy is likely to concentrate on the operational integration of USVs for not only surveillance and reconnaissance but also strike operations.

“Efforts are also underway to develop a High Endurance Autonomous Underwater Vehicle (HEAUV), with accelerated development trials for early induction. Concurrently, the Indian government has approved the construction of an Extra-Large Unmanned Underwater Vehicle, named Jalkalpi, which is expected to be integrated into the fleet between 2025 and 2027.”

Apsingikar concludes: “The simultaneous acceleration of all these procurement programs by the Indian Air Force, Army, and Navy indicates that India intends to regain and maintain its qualitative military edge over Pakistan and achieve reasonable parity with China’s military capabilities over the next decade. However, financing these initiatives adequately will remain a significant challenge. Moving forward, the Indian government is expected to consider creating appropriate regulations to establish formal funding channels for emergency procurements, with such funding provisions anticipated to reach as much as $11.1 billion by 2030.”

Source: GlobalData