Presenting the 2011-2012 budget to parliament, the minister set the military budget at just over 1.64 trillion rupees ($36.28 billion), up from last year's 1.47 trillion rupees.

"Needless to say, any additional requirement for the security of the nation will be provided for," Mukherjee said.

More than 40 percent of the Indian defense budget for 2011 will be spent on capital expenditure, while the rest will go toward maintaining one of the world's largest standing armed forces.

Local analysts speculate that such a significant increase in defense spending could indicate the government's drive to bolster India's defense capability by the extensive acquisition of modern weaponry.

An ongoing tender to supply 126 light fighter jets to the Indian air force is among the major acquisition projects carried out by the military.

Six major aircraft makers - Lockheed and Boeing from the United States, Russia's MiG, France's Dassault, Sweden's Saab and the EADS consortium of British, German, Spanish and Italian companies - are in contention to win the $11 billion tender.

India is expected to make its choice in July of this year.