In the first post-Operation Sindoor Budget, the defence sector is hoping for a substantial allocation for updating its arsenal. This would include a greater focus on drones, surveillance, long-range missiles, newer jets and the latest submarines.In the Budget 2026-27, the focus is likely on “Atmanirbhar Bharat” (self-reliance) in the sector, with emphasis on capital spending to acquire new weapons and equipment.Of the Rs 6.81-lakh crore allocation for the present year, Rs 1.71 lakh crore is for capital expenditure.The Ministry of Defence is reportedly seeking a hike of up to 20 per cent in the allocation for capital acquisition. This is intended to address “committed liabilities” and high-tech procurements like the 114 Rafale fighter jets or the signing of the deal for the next generation submarines being offered by ThyssenKrupp Marine Systems (TKMS) of Germany in partnership with Mazagon Docks Shipbuilders Limited (MDL).Analysts expect the capital outlay to grow to bridge the readiness gap highlighted by recent tensions with Pakistan.In the present fiscal year, 75 per cent of the modernisation budget was earmarked for domestic industry. This could potentially rise or see stricter implementation to favour Indian private players and MSMEs.The Budget is likely to pivot from traditional heavy platforms to more asymmetric and digital capabilities. Significant funding is likely for drones, counter-drone systems and swarm technologies.Given the ongoing situation along the Line of Actual Control (LAC) and the Line of Control (LoC), the revenue expenditure, including the daily operational cost, is expected to remain high.The Border Roads Organization (BRO) is expected to receive a continued boost to accelerate strategic tunnels and all-weather roads in Ladakh and Arunachal Pradesh.On the research front, the DRDO’s R&D funding is expected to rise from its allocation of Rs 26,817 crore. This would be needed to align with recommendations for frontier technology like drones, AI and quantum computing.