PM Modi on Defence Spending, Trade & India’s Global Role

NEW DELHI: Prime Minister Narendra Modi on Sunday underscored the necessity of modernizing India’s defence sector, citing the evolving global landscape and the need for preparedness. He also called on the private sector to increase investment in research and development, and to ensure the benefits of economic growth are shared equitably.

“Since Day 1, our government has been clear we will do whatever it takes to support our defence forces and strengthen them,” Modi told the Press Trust of India in an interview. “Yes, this year’s allocation is a record high, but viewing it in isolation only provides a limited perspective…As technology reshapes the world, our armed forces must be equipped with the best of Indian innovation and industry. As a nation that is playing an increasingly important role in the world, we have a duty to modernise our defence sector in line with current realities.”

The Prime Minister’s comments come amid increasing global instability, marked by shifting power dynamics between the United States and China, and ongoing conflicts in Ukraine and West Asia. India also faces security challenges in its own neighbourhood, compounded by the rise of cyber warfare.

Modi highlighted the significance of Operation Sindoor, noting it demonstrated the benefits of the reforms undertaken by his government over the past decade. “The entire nation is proud of the courage shown by our armed forces during Operation Sindoor. During the operation, one could see the benefits of the reforms we have undertaken in the last decade. Defence budgets, modernisation, etc, all these are parts of our continuous effort and need not be linked to any particular issue. Yes, the reality is that our nation has to be strong and be prepared at all times, and that is what we are doing,” he said.

The Union Budget 2026-27 allocates ₹7.85 lakh crore to the defence sector, a 15 percent increase over the previous budget and the largest allocation to any ministry or department, according to Modi. He emphasized the government’s commitment to supporting the armed forces and strengthening them.

Turning to the topic of recent trade agreements, Modi stated they are integral to India’s increasing global integration. He noted that deals with the UK and the EU have been years in the making and will provide Indian producers with access to new markets, as well as opportunities for service professionals.

“These trade agreements are significant not merely because of tariff reductions but because of supply-chain integration and market access in advanced economies,” Modi explained. “They gradually liberalise manufacturing tariffs, deepen services integration and create new avenues for labour-intensive exports such as textiles, footwear, electronics and engineering goods. In that sense, they support structural transformation rather than simply boosting headline trade numbers. These FTAs also anchor domestic reform to external commitments. They widen export opportunities, reduce tariff disadvantages relative to competitors, and integrate Indian firms more deeply into global value chains.”

Modi also issued a call to the Indian private sector, urging a “decisive response” to the government’s reforms. He stressed the importance of increased investment in research and development, the adoption of cutting-edge technologies, and the strengthening of supply chain capabilities. He also emphasized the need for Indian firms to compete on quality and productivity, rather than relying on protectionist measures.

“Indian firms must invest more aggressively in research and development, adopt frontier technologies, deepen supply-chain capabilities and compete on quality and productivity rather than on protected margins. Incentives and tariff preferences can catalyse growth, but durable competitiveness must rest on innovation, efficiency and scale,” he said. “Equally, as productivity rises, the gains must be shared fairly between workers, shareholders and owner-managers. Sustainable growth requires social legitimacy. Rising real wages, skill upgrading, and stable employment reinforce domestic demand and social cohesion, which, in turn, support long-term investment.”

The Prime Minister also addressed the emphasis on women in the recent Budget, stating that their welfare is a guiding principle for his government. He highlighted the significance of Nirmala Sitharaman’s record-breaking nine consecutive budget presentations as an inspiration to women across India.

Modi specifically referenced the Budget’s provisions for hostels, noting that many girls discontinue their education due to the difficulties of commuting long distances. He also pointed to initiatives related to the training of Allied Health Professionals, emphasizing the crucial role women play in the healthcare sector.

“Many girls drop out not because of a lack of talent, but because commuting long distances to labs and late study hours are difficult. This intervention directly addresses that constraint,” he said. “Further, steps related to training of Allied Health Professionals will benefit women. Women have always been at the centre of caregiving, but Here’s largely in the informal sector. By training 1.5 lakh caregivers next year and expanding institutions for Allied Health Professionals, with a target of 1 lakh trained over 5 years, we are embarking on a large-scale effort to formalise care work. This does two things: it creates dignified, certified employment for women and simultaneously strengthens India’s healthcare capacity.”