Press Release
Mannat Ghumman
IMPRI Center for International Relations and Strategic Studies, IMPRI Impact and Policy Research Institute, New Delhi, hosted a panel discussion on ‘Defence, Foreign Policy, and the Union Budget 2025-26’ under its 6th Annual Series of Thematic Deliberations and Analysis of the Interim Union Budget 2025-26.
Dr Simi Mehta, CEO & Editorial Director of IMPRI, served as the chair and moderator of the discussion, offering a comprehensive synthesis of the key insights shared by the panelists. She framed the discussion within the broader goal of making India a $5 trillion economy and achieving Viksit Bharat by 2047, emphasizing that economic strength and strategic defence planning must go hand in hand. She welcomed the distinguished panelists and highlighted how their perspectives collectively provided an in-depth analysis of India’s defence and foreign policy considerations in light of the Union Budget.
Dr Mehta underscored the significance of budgetary allocations to the Ministry of Defence and the Ministry of External Affairs, linking them to India’s strategic aspirations. She noted that this year’s budget continues to prioritize India’s immediate neighborhood while expanding financial outreach to Eurasia and Latin America, reflecting India’s evolving global commitments. She also pointed out how the government’s push towards self-reliance in defence production and exports signals a stronger emphasis on economic diplomacy and strategic partnerships.
Throughout the discussion, she tied together various themes raised by the panelists, from defence modernization and procurement challenges to India’s role in international economic frameworks. She acknowledged the encouraging signals from the budget, particularly in fostering economic diplomacy and strengthening India’s international partnerships, while also cautioning about the importance of efficient policy execution.
Major General (Dr) P K Chakravorty, VSM (Retd.) delivered a compelling address at the panel on Defence, Foreign Policy, and the Union Budget, who delved into the nuances of India’s defence budget and its broader implications. He highlighted the allocation of approximately INR 6.81 lakh crores to defence, emphasizing that while it accounts for about 1.9% of GDP, experts argue that it should be closer to 3% to ensure modernization and preparedness. He noted that despite budgetary constraints, India’s defence exports are increasing, citing sales to countries like Indonesia, Vietnam, and Armenia.
He underscored the importance of streamlining procurement processes, reducing bureaucratic hurdles, and fostering private sector involvement to enhance efficiency. He also discussed the role of indigenous defence production, mentioning advancements in weapon systems such as the Pinaka and Tejas aircraft, and the necessity of sustained government support to drive innovation. Furthermore, he stressed the importance of civil-military fusion, where investments in border roads, the Coast Guard, and defence technology research, including artificial intelligence and quantum computing, are crucial for national security.
Major General Chakravorty also reflected on the strategic landscape, pointing out emerging global alliances and conflicts, such as the evolving axis of Iran, North Korea, Russia, and China, and the ongoing war in Ukraine, which present new challenges for India’s security apparatus. He applauded the government’s increased defence allocations and efforts to integrate private enterprises into the sector, particularly through initiatives like iDEX, which encourages entrepreneurship and innovation. However, he cautioned that the long and complex acquisition processes could delay the deployment of critical military assets.
He also highlighted infrastructural improvements, including projects enhancing connectivity in Jammu & Kashmir, which not only serve defence purposes but also contribute to civilian benefits. The discussion reinforced that while financial allocations are crucial, structural reforms and efficient implementation are equally imperative to ensure that India’s defence forces remain well-equipped and agile in a rapidly changing global security environment.
Prof. Annapurna Nautiyal, Vice Chancellor of Hemvati Nandan Bahuguna Garhwal University, Uttarakhand. Prof. Nautiyal emphasized the intrinsic link between foreign policy and defence, asserting that both must be approached together for national security and growth. She acknowledged the challenges in these domains but stressed the importance of finding viable solutions to strengthen India’s position globally.
She highlighted that inclusive development, employment growth, and advancements in agriculture, industry, health, education, and tourism play a crucial role in shaping foreign policy. Additionally, she underscored the significance of artificial intelligence, machine learning, robotics, cyber technologies, and space technologies in the modernization of India’s defence sector. Prof. Nautiyal reiterated the government’s vision of making India a ‘Viksit Bharat’ by 2047 and achieving a robust economy by 2030.
Prof Nautiyal further elaborated on India’s foreign policy approach, highlighting the ‘Neighbourhood First’ initiative, which prioritizes regional alliances before extending global outreach. She pointed out India’s proactive engagement with countries like Maldives, South Africa, and others through aid and trade partnerships. She also observed that while the world claims to be multipolar, it remains largely influenced by unilateral decisions, particularly by the United States. She critiqued economic sanctions and tariffs as tools of economic dominance, noting that India has successfully navigated such challenges by diversifying trade relations, particularly with Russia for energy security. A
dditionally, she emphasized the importance of balancing hard power with soft power in foreign policy. She noted that while global powers leverage economic influence, military strength remains a critical factor in international relations. Prof Nautiyal concluded by stressing that India’s defence and foreign policy strategies must continue evolving to counter technological challenges, artificial intelligence, and cybersecurity threats, ensuring long-term national security and diplomatic resilience.
Prof Nawal K Paswan from Sikkim University provided further insights into the implications of the defence budget and its role in India’s strategic positioning. She emphasized that the marginal increase in defence allocation is necessary for ensuring India’s transition to a technologically advanced combat-ready force. While the government has shown intent by simplifying defence procurement procedures, Paswan noted that bureaucratic inefficiencies still hinder effective utilization.
She also pointed out that INR 1,80,000 crore has been allocated to capital outlay, a 4.65% rise from the previous year, with a strong focus on domestic manufacturing. He elaborated on the necessity of streamlining recruitment processes to ensure timely induction of personnel and prevent unspent funds from being returned due to administrative delays. Another crucial aspect he highlighted was the importance of a long-term strategic vision in defence budgeting, advocating for a more structured approach in planning expenditures and acquisitions.
Paswan further elaborated on India’s commitment to strengthening border infrastructure, particularly in light of recent geopolitical tensions. She highlighted the importance of incorporating emerging technologies such as hypersonic weapons and drone warfare to maintain military superiority. She also discussed the underutilization of allocated funds in defence procurement, attributing it to the sluggish recruitment process and procedural complexities. She stressed that a unified framework for streamlining services would be crucial in optimizing defence expenditure.
Additionally, she emphasized that India’s security apparatus must align itself with global trends in cyber warfare and artificial intelligence-driven surveillance. She noted that a significant push toward defence research and development, particularly in collaboration with private firms and startups, would be instrumental in achieving technological self-sufficiency. She also pointed out the increasing importance of strategic partnerships with international allies, particularly in the Indo-Pacific region, to counterbalance growing threats in global geopolitics.
Prof Prabir De from RIS provided an economic perspective, linking defence and foreign policy expenditures to India’s global standing. He examined the budgetary trends within the Ministry of External Affairs, which, despite receiving less than 1% of the total budget, plays a crucial role in diplomatic outreach and economic cooperation. He highlighted India’s push for greater connectivity through infrastructure projects like the Modified Wooden Scheme, which supports research and development in the private sector.
He also discussed India’s export policies, focusing on the importance of digital public infrastructure (DPI) in boosting international trade and streamlining global transactions. He noted that strategic investments in digitalization would facilitate smoother cross-border transactions and bolster India’s position in global trade negotiations. Additionally, he pointed out that an integrated approach to economic and defence policies is essential in ensuring long-term financial stability while enhancing national security capabilities.
De emphasized India’s need to align its export policies with global standards while rationalizing its duty structures to enhance competitiveness. He noted the INR 2,250 crore allocation for DPI as a game-changer in global commerce. Additionally, he addressed India’s growing emphasis on green shipping and semiconductor development, key industries that could transform India’s trade and diplomatic relations.
The professor also pointed out India’s strategic investment in foreign relations, with increasing financial support to key partners, including the Maldives and Sri Lanka. He highlighted that India’s foreign aid policies must be viewed through the lens of economic diplomacy, ensuring that investments yield tangible geopolitical benefits. He also stressed that while the focus on domestic manufacturing and supply chain diversification is commendable, India must actively participate in global economic alliances to secure long-term trade benefits and technological advancements.
Prof Swaran Singh from JNU analyzed the convergence of defence and foreign policy budgets in shaping India’s long-term strategic vision. He highlighted the increasing importance of India’s diplomatic efforts, noting the steady budgetary rise for the Ministry of External Affairs, which saw a significant 23% increase last year due to the G20 summit. He also examined India’s foreign aid commitments, such as Bhutan receiving INR 2,000 crore, and noted that these investments reflect India’s regional and global strategic ambitions.
Singh pointed out that India’s foreign policy framework is increasingly aligning itself with defence strategies to maintain stability in South Asia and counter emerging global threats. He discussed the need for a pragmatic approach to diplomatic investments, ensuring that India’s financial resources are strategically directed toward fostering long-term partnerships and securing its geopolitical interests.
Singh underscored the role of hydroelectric projects, cultural diplomacy, and infrastructure investments such as the Chabahar port in expanding India’s geopolitical influence. He pointed out that while the Ministry of Defence receives the largest budgetary allocation, the Ministry of External Affairs plays a crucial role in implementing India’s foreign policy.
He also noted that increased allocations to passport services and diplomatic outreach indicate India’s rising global ambitions. His analysis underscored how budgetary decisions reflect India’s aspirations to emerge as a major global power while balancing economic and security concerns. He concluded by emphasizing that the effectiveness of these budgetary allocations will depend largely on their execution and the ability of various ministries to coordinate efforts in achieving strategic national objectives.
Prof Sanjukta Bhattacharya, Retired Professor from Jadavpur University and Visiting Professor at IMPRI, analyzed the geopolitical implications of India’s budgetary decisions, particularly in the realm of defence and foreign policy. She emphasized how a single international event can trigger cascading shifts in geopolitical alignments, citing recent conflicts in Israel and broader tensions in the Middle East. She underscored India’s strategic positioning in global politics and its efforts to manage emerging security challenges. Bhattacharya noted that while India’s defence budget saw a 9.52% increase, its share of GDP remains at 1.9%, which raises concerns about whether this allocation is sufficient to support India’s global ambitions.
Bhattacharya further analyzed the shift from personnel-intensive to technology-intensive defence capabilities, emphasizing the need for modernized equipment, cybersecurity, and enhanced surveillance infrastructure. She discussed India’s ‘Make in India’ initiative, stressing that 75% of defence procurements are now sourced domestically. However, she questioned the feasibility of self-reliance given the country’s current industrial capacity. She also examined India’s strategic partnerships in the Indian Ocean region and how increased budgetary allocations to the Coast Guard reflect growing concerns over maritime security. Additionally, she highlighted India’s diplomatic outreach through increased financial commitments to Bangladesh and Africa, underscoring how economic and military investments are intertwined in India’s broader foreign policy framework.
IMPRI’s 6th Annual Series of Thematic Deliberations and Analysis of Union Budget 2025-26
IMPRI’s 6th Annual Series of Thematic Deliberations and Analysis of Union Budget 2025-26
Acknowledgement- This article is written by Mannat Ghumman, an Intern at IMPRI.
