Defence Shares Rally on ₹1.05 Lakh Crore Deal

By Sulagna Halder 

Mumbai, 4 July 2025:

Following the approval of capital acquisition proposals totaling ₹1.05 lakh crore by the Defence Acquisition Council (DAC), which is chaired by Defence Minister Rajnath Singh, India's defence stocks saw a sharp increase on Thursday. This is one of the biggest procurement approvals under the "Make in India" campaign, which aims to increase domestic defense manufacturing and lessen dependency on imports. 

Armoured Recovery Vehicles, Electronic Warfare Systems for mountain terrain, Ballistic Helmets, Close In Weapon Systems, Surface to Air Missiles (SAMs), Naval Mines, Mine Countermeasure Vessels, and Submersible Autonomous Vessels are just a few of the many systems included in the enormous procurement package. With an emphasis on enhancing independence in the defense industry, all platforms must be purchased from Indian producers.

The stock markets reacted quickly. In addition to BEML and Cochin Shipyard, shares of Bharat Dynamics Ltd. (BDL) increased by more than 3%, while those of Hindustan Aeronautics Ltd. (HAL) and Bharat Electronics Ltd. (BEL) saw gains of about 2%. Outperforming more general indices, the Nifty India Defence Index increased by almost 2%. 

“This approval reflects India's growing capability in defense manufacturing and the government's strong intent to build a resilient supply chain," a senior defense ministry official stated. Additionally, it shows our dedication to strategic independence. The defense budget for the fiscal year 2024–2025 allots ₹1.72 lakh crore for capital acquisitions, with ₹1.05 lakh crore going to Indian suppliers. 

This is a component of a larger policy change intended to give domestic businesses priority for all vital defense platforms. According to analysts, this will significantly advance India's industrial and technological base in addition to bolstering the nation's defense readiness. 

Brokerage firms have high hopes for the future, especially for businesses engaged in naval defense projects. Shipyards such as Cochin Shipyard and Mazagon Dock may experience strong order flows in the upcoming quarters due to the package's inclusion of orders for mine countermeasure vessels and autonomous systems. Improved financial visibility and more transparent order pipelines are also anticipated to help defense PSUs.

Experts warn that timely execution and project management are critical to the success of this initiative, even though the procurement plan is viewed as a positive catalyst. Timelines for development and delivery may present difficulties for complex systems like SAMs and underwater autonomous platforms. 

This strategic procurement push offers a promising path for defense companies and the domestic industrial ecosystem, as the Indian government has reaffirmed its intent to modernise its military forces using indigenous technologies.