'Sare Jahan Se Achcha' replaced the Christian hymn Abide With Me, a favourite of Mahatma Gandhi.
The Beating Retreat ceremony - a centuries-old military tradition going back to the days when troops disengaged from battle at sunset as soon as 'buglers' sounded the 'retreat' - was set to new tunes this year.
The ceremony is performed every year on January 29 and marks the end of the Republic Day celebrations.
A host of new tunes were added to the ceremony to commemorate 75 years of the country's independence (being celebrated as Azadi ka Amrit Mahotsav). These include 'Kerala', 'Hind ki Sena' and 'Ae Mere Watan Ke Logon'.
The Defence Ministry included the patriotic song 'Aey Mere Watan ke Logo' - written by Kavi Pradeep to commemorate the supreme sacrifice made by Indian soldiers during the 1962 Indo-China war - in the Beating Retreat ceremony in an effort to make the event more Indian.
'Sare Jahan Se Achcha' replaced the Christian hymn Abide With Me, a favourite of Mahatma Gandhi. The song had been a permanent fixture of the ceremony since 1950.
A thousand drones flew in formation in the capital, flashing the saffron, white and green of the national flag, before rearranging themselves into a silhouette of Independence hero Mahatma Gandhi.
The 10-minute drone show, according to the Defence Ministry, was to commemorate the 75 years of Independence.
A projection mapping show on the walls of North Block and South Block, added colours to the ambience.
Union Minister Jitendra Singh, speaking to news agency ANI, said that India will become the fourth country in the world after the UK, Russia and China to light up 1,000 drones in the sky during the Beating Retreat ceremony.
Foot-tapping music by the bands of Indian Army, Navy, Air Force and Central Armed Police Forces (CAPF) filled the air. They also stood in various formations.
President and Supreme Commander of the Armed Forces Ram Nath Kovind, Prime Minister Narendra Modi, Defence Minister Rajnath Singh, Army chief Manoj Mukund Naravane, Navy chief Admiral R Hari Kumar and Air Force chief Air Marshal V R Chaudhari and various other dignitaries were present at the ceremony.
This year's ceremony was conceptualised, designed, produced and choreographed under the 'Make in India' initiative.
The entry band played the 'Veer Sainik' tune, followed by Pipes & Drums Band, CAPF Band, Air Force Band, Naval Band, Army Military Band and Massed Bands.
Commander Vijay Charles D'Cruz was the principal conductor of the ceremony.
(With PTI inputs)