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Ever ignored a dusty corner in your home during Diwali cleaning, only to find it hiding something valuable? That’s what we’ve done with India’s defence sector.
For years, we saw it as slow, government-heavy, and full of red tape. But while we were looking elsewhere, something big was brewing. India’s defence exports rose from just ₹686 crore in 2013-14 to an impressive ₹23,622 crore in 2023-24—a 34x jump. And now, India aims to hit ₹50,000 crore by 2029.
Make In India
How Does This Boom Affect Us?
Take Neha from Vadodara. She always stuck to “safe” stocks like FMCG and banks. But when she saw India exporting defence tech to 80+ countries—including the USA, France, and Armenia—and her cousin’s defence ETF return 60% last year, curiosity replaced caution. She started with a small SIP.
The Hidden Impact of Defence Tech
Now here’s something most people miss:
When I first learned that MRI machines and GPS had roots in defence research, my jaw dropped. Defence tech isn’t just about war—it often trickles down to our daily lives. Wi-Fi and cellular networks began as military innovations.
Today, Indian startups are building UAVs, missile systems, and AI tools for border surveillance—which also support disaster relief and smart cities.
Here’s the thing: tech built for survival is rugged and scalable. Like a neem tree—slow to grow, but built to last.
Pioneers Running Away?
And we’ve had pioneers. Dr. Arogyaswami Paulraj, a Tamil Nadu native and Indian Navy Commodore, helped develop SONAR systems during the Indo-Pak war of 1972. He retired early from the Navy as a Commodore in 1991, then moved to Stanford University. There, in 1992, he invented MIMO—the backbone of 4G and 5G wireless. He’s now in the US National Inventors Hall of Fame.
So was it brain drain or brain trade? I can give you thousands of such cases where scientists used government grants to conduct research and, after initial breakthroughs, moved to the US or Europe.
Thankfully, that’s changing. With Atmanirbhar Bharat, DRDO incubators, and startup-friendly reforms, scientists are staying back to build here.
The New Face of Defence: Integration and Innovation
Defence today isn’t just manufacturing—it’s also integration and calibration. These are the real cash cows. Indian companies, even young startups, are excelling here.
- Look at the BrahMos missile—jointly built with Russia, now a leading export.
- Or our integration of the S-400 missile system with Akash and anti-aircraft guns. This hybrid strategy—foreign tech + indigenous systems—is working.
Mishra Dhatu Nigam is developing critical alloys. L&T has evolved from a fabricator to a full-spectrum defence player—covering land, sea, and air.
The Numbers Speak for Themselves
India’s defence momentum is undeniable:
- Nifty India Defence Index surged 64% last year vs. Nifty 50’s 11%
- ₹6.2 lakh crore defence budget
- 70% of capital procurement reserved for indigenous firms
What’s fueling this? Startups, PSUs, and policy all working together.
Investment Opportunities
Take Motilal Oswal’s Nifty India Defence ETF:
- HAL: 24% weight, ₹2.4L cr market cap, 23% ROCE (better than Infosys!)
- BEL: 19% weight, strong DRDO links
- ideaForge: 1.2%, up 89% since IPO
The Aditya Birla Sun Life Defence Index Fund offers similar exposure.
Start Small:
- Allocate 15% of your portfolio
- SIP ₹50,000/month depending on your risk appetite
- Track DRDO tie-ups, HAL, BEL, and ideaForge
The Risks to Consider
Yes, there are risks:
- HAL missed 67% of targets in 2023
- CAATSA sanctions loom over Russian imports
- At 38x P/E, valuations are steep (global peers trade at 18x)
But…
- India’s defence exports are growing 10x faster than global averages
- US imports by India rose 200% since 2020—reducing reliance on Russia
Catalysts to Watch
- Union Budget (2026): Eyes on defence allocation
- BrahMos-Next trials (2025)
- UAV export contracts (2025)
Final Thoughts
Don’t just watch this goldmine. Own a piece. Your competitor’s SIP is already running.
Start your allocation today—and this could be India’s next IT moment. At least ₹50,000/monthly SIP for the next 10 years. You’ll be glad you did.
Feel free to get in touch with our team for portfolio rebalancing. Or Visit Primeidea.in
