Budget 2026: Markets Eye 8-10% Defence Outlay Hike, Seek Execution Momentum
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Moneycontrol•14-01-2026, 09:28
Budget 2026: Markets Eye 8-10% Defence Outlay Hike, Seek Execution Momentum
- •Markets anticipate an 8-10% increase in the defence budget for 2026, with anything above 10% considered a positive surprise.
- •Allocations are expected to prioritize drones, arms and ammunition, and defence electronics, aligning with operational needs and indigenization.
- •The focus has shifted from mere announcements to execution momentum, faster DAC approvals, and clearer timelines for order conversion.
- •Key trends include increased emphasis on drones, counter-UAV systems, missiles, air defence, and defence electronics.
- •Challenges persist with slow conversion of capital expenditure into orders, execution delays, supply-chain issues, and working-capital pressures for PSUs.
Why It Matters: Markets expect a moderate defence budget hike but prioritize execution and order conversion over just allocations.
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