As India accelerates its transition from import dependant to a technology-driven and self-reliant defence manufacturing ecosystem, the Union Budget 2026 must deepen industry led research, design and development. It must scale capital and R&D support, along with a stable tax and regulatory framework, for companies building advanced defence technologies.

Defence innovation cannot only remain government led. The industry must be entrusted with greater responsibility for developing cutting edge technologies, whether indigenous or through structured global partnerships, backed by dedicated capital budgets, design linked incentives and long-term visibility of funding. Selection and procurement frameworks should differentiate between companies with proven development and manufacturing heritage, and those that merely aggregate or assemble.

Beyond core defence platforms, strong support is needed for drones, counter drone systems and aerospace technologies, where rapid innovation cycles demand testing infrastructure, development grants and assured procurement pathways. Space and emerging strategic technologies should form the second pillar of budgetary focus, with targeted incentives to scale private sector participation in launch systems, satellites and dual use applications critical to national security.

Amit Mahajan, Director, Paras Defence and Space Technologies Limited