Domestic arms production

The Indian defense sector has witnessed a significant surge in investments, with the sector index climbing nearly 56% over the past year. This growth is driven by Prime Minister Narendra Modi's emphasis on domestic arms production, aiming to reduce reliance on imports. Companies like Hindustan Aeronautics and

have robust order books, reflecting strong demand. While state-owned companies dominate 85% of production, private entities such as the Adani Group and Tata Sons are making notable inroads. Despite high valuations, defense stocks have yielded substantial returns, exemplified by HDFC's defense fund, which provided annualized returns of nearly 73% since mid-2023.