India’s Defence Budget May Touch ₹31.7 Trillion By 2047, Says CII-KPMG Report

India’s defence budget may rise nearly fivefold to ₹31.7 trillion in 2047, up from ₹6.81 trillion in 2025–26 (FY26), according to the Defence Industrial Sector Vision 2047 report by the Confederation of Indian Industry (CII) and KPMG India.

Unveiled on Thursday at the CII Annual Business Summit in New Delhi, the report—titled Atmanirbhar, Agrani, and Atulya Bharat 2047—projects that India’s defence production could increase more than sixfold, reaching ₹8.8 trillion by 2047 from ₹1.46 trillion in FY25.

Defence exports are expected to rise almost twelvefold, from ₹24,000 crore in FY25 to ₹2.8 trillion in 2047.

India’s Defence Budget To Double As GDP Share; R&D Spend To Rise

The report also forecasts that research and development (R&D) spending may grow from 4% to 8–10% of the defence budget.

It expects India’s defence budget to rise from 2% of gross domestic product (GDP) to 4–5%.

These figures represent key milestones, achievable only if three core conditions are met.

However, the report flags several challenges.

Budget constraints could limit spending on armed forces modernisation and indigenous military technology.

Regulatory delays and procedural inefficiencies continue to hinder procurement and local R&D.

Dependence on defence imports blocks innovation and self-reliance. There is also a shortage of skilled talent to handle advanced technology and systems.

Public-Private Partnerships Crucial For Boosting Defence Production

According to the report, stronger public-private partnerships are essential. Yet, many private firms hesitate to enter defence production due to a lack of sustained incentives.

It adds that intellectual property and technology-transfer issues with foreign partners present major roadblocks.

The report calls for better strategic planning, higher defence budget allocations, streamlined procedures, and effective policies.

It also urges a stronger innovation ecosystem through collaboration between the public and private sectors.

The report outlines a three-phase vision for India’s defence sector:

• By 2032, India should become self-reliant in critical defence production by reducing imports and promoting home-grown R&D and manufacturing.
• By 2038, India should rank among the top five global defence exporters, driven by high-quality equipment and strategic global partnerships.
• By 2045, India should lead in cutting-edge defence technologies by fostering academic, industrial, and governmental collaboration backed by major R&D investment.

CII and KPMG believe that by committing to these ‘strategic vectors’, India can transform its defence capabilities and realise its ambition of becoming a developed nation by 2047.

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