A Futuristic Budget for Defence

Hyderabad: Defence and space technology firms have received the Union Budget as a signal of long-term intent, with industry players reading the fine print for what it unlocks indirectly.For Eon Space Labs, the emphasis on manufacturing depth, supply chains and enabling technologies stood out more than top-line defence numbers. Sanjay Kumar, one of the cofounders, said the Budget’s continued focus on domestic manufacturing, critical minerals and stronger supply chains points to long-term thinking.“What matters is how effectively capital expenditure translates into strategic technology demand. Predictable procurement will help indigenously designed EO and IR imaging payloads scale faster,” he said, adding that customs duty exemptions on aircraft parts and raw materials supporting civil and defence manufacturing could ease production cycles.Punit Badeka, another cofounder of Eon Space, pointed to persistent bottlenecks at the supplier level. “Electronics components, boards and subsystem vendors remain a challenge. The continued support for domestic manufacturing through allocations for electronics components and semiconductors, along with MSME liquidity and scale-up measures, should help reduce pressure across the supplier base,” he said.From the aerospace start-up ecosystem, Red Balloon Aerospace said the Budget’s value lay in what it builds. Dr Venkata Sai Kiran Chakravadhanula, cofounder and CEO, said, “This Budget is less about headline weapon systems and more about building the infrastructure that supports them. The focus on near-space capabilities, surveillance, precision manufacturing and semiconductors shows a clear intent to strengthen the foundation. The market pull is indirect but evident, especially for private defence and finance-backed deep-tech start-ups.”Larger defence manufacturers also welcomed the capital-heavy approach. Amit Mahajan, director at Paras Defence and Space Technologies, said the allocation strengthens confidence across the sector. “The substantial defence outlay underscores a sustained commitment to modernisation, indigenisation and capability expansion. It strengthens long-term demand visibility for domestic defence manufacturers and supports India’s transition from a buyer to a builder of advanced defence systems,” he said. Mahajan said the prioritisation of capital expenditure, along with policy continuity around self-reliance, creates a supportive environment for firms working in strategic electronics, optics, surveillance and space-enabled solutions.ACMIIL Research said the 15 per cent rise in defence spending improved order visibility across aerospace and avionics, while exemptions for imported capital goods and aircraft components could lower costs for both civil and defence aviation manufacturing. It said such measures support public sector firms as well as private suppliers in the defence ecosystem.Retired officers welcomed the higher allocation but cautioned against reading numbers alone. Col. Raja Shekhar (retd) said R&D timelines often slowed down due to decision-making delays and coordination gaps. “Execution will depend heavily on bureaucratic processes and how state governments respond,” he said.Major Shiva Kiran (retd) said the increase was necessary given recent security developments. “Macro figures matter, but the real test is whether allocations reach unit level. Better equipment and resources on the ground will decide preparedness,” he said.



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