India may see massive fivefold increase in defence budget by 2047: set to become third biggest defence spender

India’s defence budget is projected to grow from Rs 6.8 lakh crore in 2024–25 to Rs 31.7 lakh crore by 2047, according to a joint report by the Confederation of Indian Industry (CII) and global consultancy KPMG.

The report forecasts that defence production in India will also see strong growth. It is expected to rise from Rs 1.6 lakh crore in 2024–25 to Rs 8.8 lakh crore by 2047. Alongside this, India’s defence exports are projected to increase from the current Rs 30,000 crore to Rs 2.8 lakh crore, helping the country position itself as a global supplier in the sector.

A major increase in capital expenditure is also indicated. The money spent on infrastructure and modern equipment is likely to increase from 27% to 40%. Spending on research and development in defence is also projected to double, rising from 4% to 8–10%. Meanwhile, the share of GDP allocated to defence could increase from 2% to 4–5%.

With these, India is likely to move from being the world’s fourth-largest defence spender to the third-largest by 2047.

However, the report also points out several hurdles. India continues to rely on imports for critical military technologies, which weakens domestic self-reliance. There is also a shortage of skilled manpower to handle complex defence systems and new technologies.

Geopolitical tensions in the region, including border disputes and global power rivalries, could also pose risks and force the government to shift focus from long-term investments to short-term responses.

The report emphasises the importance of strong partnerships between government and private firms, but says incentives and policy support will be crucial to attract private players into defence manufacturing. Technology transfers and intellectual property rights in collaborations with foreign partners also remain sensitive and unresolved issues.

India’s growing role as a strategic player in South Asia and the wider Global South adds urgency to these reforms, with defence planning now seen as a central part of national development.