India’s Defence Sector in 2025: A Critical Analysis of Capabilities, Progress and Limitations

Reading Time: 4 minutes In 2025, India’s defence sector presents a picture of ambitious aspirations juxtaposed with deeply embedded institutional limitations. The increased budgetary outlay, significant political emphasis on indigenous manufacturing, and geopolitical recalibration towards Western partners suggest a country determined to move away from dependency on foreign platforms. However, beneath this high-level narrative lies a more nuanced reality. India’s Ministry of Defence has continued to struggle with capital allocation inefficiencies, chronic delays in procurement cycles, and uneven execution of modernisation programmes. As a result, while some indigenous platforms have begun to enter service, India’s actual warfighting capabilities remain constrained by systemic friction, especially in readiness, logistics, and integration across services. The Union Budget for FY 2025–26 allocated ₹6.81 lakh crore to defence, reflecting a 9.53% increase over the previous year. Within this, capital expenditure was pegged at ₹1.8 lakh crore, with ₹1.12 lakh crore earmarked for domestic acquisitions. In