Defence Budget 2026: Industry Demands Long-Term Policy Clarity for Manufacturing Growth

• Experts urge Union Budget 2026 to prioritize next-gen defence technologies like AI, cybersecurity, and unmanned systems for strategic navigation.
• Fiscal incentives, enhanced tax credits for R&D, and support for export-oriented clusters are crucial for strengthening the defence industrial base.
• Increased R&D allocations, from current 5% to higher levels, are needed to accelerate innovation and reduce lifecycle costs.
• Industry calls for a PLI 2.0 scheme to incentivize domestic component and UAV system manufacturers, fostering a robust drone ecosystem.
• Long-term policy continuity, predictable funding, and industry trust in developing cutting-edge technologies are vital for sustained defence manufacturing.

Why It Matters: Industry seeks long-term policy clarity, increased R&D, and fiscal incentives in Defence Budget 2026 to boost manufacturing.