Defence Stocks Surge as Markets React to PM Modi’s ‘Made in India’ War Cry. Nifty Defence Index Jumps 4%

Mumbai, May 13, 2025 – Defence stocks were in full battle mode on Tuesday, as shares of companies like Bharat Dynamics, MTAR Technologies, Zen Technologies, Hindustan Aeronautics (HAL), and others soared on the National Stock Exchange (NSE). The sharp rally followed Prime Minister Narendra Modi’s assertive address to the nation on Monday, where he highlighted the role of indigenous defence systems in the ongoing Operation Sindhoor.

The Nifty India Defence index surged as much as 4.57% to hit an intraday high of 7,465, with all 18 constituents trading higher. By 1:57 PM, the index remained strong at 7,425.95, up 4.03% for the day.

A Nation at War, Markets at Work
The rally came just hours after PM Modi’s May 12 address to the nation, where he lauded India’s success in “new-age warfare” during the ongoing Operation Sindhoor—a high-profile military engagement with Pakistan.

“India has showcased its excellence in new-age warfare. The time has come for ‘Made in India’ defence equipment,” the Prime Minister declared.

This comment set the stage for a surge in defence stocks, as the market interpreted Modi’s statement as a clear signal that domestic defence production will remain a long-term policy priority. The defence ministry also confirmed that the majority of military hardware used in Operation Sindhoor—ranging from missile systems to surveillance drones—was developed indigenously.

Stocks That Took Off

The broader Nifty India Defence index has now jumped 14.27% year-to-date, further reflecting the long-term market confidence in India’s strategic defence push.

India’s Defence Evolution

India has made significant progress in reducing its dependence on foreign defence imports. In FY24, the country recorded its highest-ever domestic defence production at ₹1.27 lakh crore. Today, nearly 65% of India’s defence needs are met through indigenous manufacturing, compared to an import dependency of over 65% a decade ago.

The transformation is supported by:

• Large-scale procurement of locally developed systems
• Faster approvals for indigenous projects
• Increased funding to public and private defence players
• Technology partnerships led by DRDO and Indian firms

Where the Defence Budget Go?

The defence sector’s growth is also reinforced by a robust fiscal push. The Union Budget for FY25 earmarked ₹6.2 lakh crore for defence, with ₹1.72 lakh crore allocated to capital expenditure—primarily aimed at modernisation and procurement of domestically made platforms.

Focus areas for investment include:

• Fighter aircraft and drones (HAL, BDL)
• Naval shipbuilding (Mazagon Dock, Cochin Shipyard)
• Electronic warfare systems (Data Patterns, Zen Technologies)
• Military transport and equipment (BEML)

This integrated military-industrial buildout is not just about defence—it’s now a full-fledged economic driver.

Outlook:

The defence index has risen 14.27% year-to-date, and 4.01% since the start of April, showing steady momentum. With geopolitical uncertainty remaining high and a clear national focus on strategic autonomy, the market is betting big on defence as a structural growth theme.

From the battlefield to the bourse, India’s defence story is taking centre stage. As the country ramps up its indigenous capabilities, markets are rewarding companies that power its military future. With policy support, rising budgets, and shifting global dynamics, the rally in defence stocks may be just getting started.

The question now is—are investors witnessing the rise of India’s next long-term growth engine?