Encounter kashmir
[Representational Image] J&K: Encounter with security forces, army leaves 2 militants dead.Reuters

Finance Minister Arun Jaitley said the government will spend 2.46 trillion rupees ($40 billion) in the defence sector in 2015/16.

In July 2014, while presenting the Narendra Modi government's first budget, Jaitley said the defence sector would get an annual outlay of Rs.229,000 crore, around 1.8 percent of the gross domestic product.

Prime Minister Narendra Modi had presented a vision statement under his 'Make in India' campaign where local manufacturers of defence equipment had an important role.

"This year too, I have provided adequately for the needs of the armed forces. As against likely expenditure of this year of Rs 2,22,370 crore the Budget allocation for 2015-16 is Rs 2,46,727 crore," Jaitley said in his budget speech.