Defence Spending Should Increase To 2.5–3 Per Cent Of GDP, Can Do A 10-15 Per Cent Increase In Capex Every Year: Def Secy Rajesh Kumar Singh

India aims to increase defence spending from the current 2 per cent of GDP to 2.5–3 per cent, Defence Secretary Rajesh Kumar Singh said at Network18’s Reforms Reloaded summit on 22 September.

Singh outlined plans to boost capital expenditure by 10–15 per cent annually. “A 10 per cent increase is adequate to meet requirements. In the medium term, with the Finance Commission, we can seek a 17–18 per cent increase over the next five years,” he said.

India intends to spend $25–30 billion annually over the next decade, with a strong focus on indigenisation, reported Money Control.

Singh highlighted that at least 75 per cent of capital expenditure will remain within the country, building on last year’s 88 per cent domestic spend.

“In areas where technology readiness is high, we will do entirely indigenous procurement,” he added.

Singh identified priority areas for investment, including drones, UAVs, underwater drones, satellite imagery, and precision munitions.

An RFP worth Rs 30,000 crore for Medium Altitude Long Endurance (MALE) drones is expected soon.

He noted that Bharat Dynamics Ltd and Munitions India Ltd have struggled to meet demand, while private sector investment in munitions and missiles remains limited.

To encourage broader participation, the government plans to open procurement, promote start-ups, and move from nomination-based contracts to open bidding with price discovery.

Singh said the capex document will be simplified by December, with the Defence Acquisition Procedure (DAP) ready from January.

India has signed or is close to signing contracts worth Rs 1.5 lakh crore, with another Rs 75,000 crore in the pipeline, keeping spending at or above last year’s Rs 2.09 lakh crore.

Singh also emphasised balancing defence partnerships: “Whichever country is ready to share critical technology, we can go with those countries,” including both the US and Russia.

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