India's defence sector is anticipated to experience a significant boost by the year 2047, with the total defence budget projected to reach Rs 31.7 lakh crore, according to a joint study report by the Confederation of Indian Industry (CII) and KPMG.

This marks nearly a five-fold increase from the Rs 6.8 lakh crore allocated in 2024-25.

The report, released on May 31, projects India's defence production to grow strongly, reaching Rs 8.8 lakh crore by 2047, up from Rs 1.6 lakh crore in 2024-25.

Defence exports are also expected to surge from the current Rs 30,000 crore to Rs 2.8 lakh crore by 2047.

A key focus of the upcoming defence strategy is to increase the share of capital expenditure in the total budget, from 27% in 2024-25 to 40% by 2047, indicating greater investments in infrastructure, technology, and weapon systems.

Spending on research and development (R&D) in defence is also set to increase from 4% to between 8% and 10%.

Furthermore, the percentage of GDP allocated to defence is expected to rise from 2% to 4-5% by 2047.

These developments are likely to enhance India's global standing in defence expenditure, with the country projected to move from its current 4th place to 3rd place by 2047.

However, the report highlights that reliance on defence imports for critical technologies remains a significant challenge, hindering self-reliance and innovation in the domestic defence manufacturing sector.

 Source - The Economics Times