India's Defence Stocks Surge Amid 'Make in India' Push; Chinese Defence Shares Plummet Post Ceasefire

May 13, 2025 — Indian defence stocks experienced a significant surge today, with major players like Hindustan Aeronautics Ltd (HAL), Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders & Engineers Ltd (GRSE) witnessing gains of up to 9%. This rally is attributed to Prime Minister Narendra Modi's renewed emphasis on the 'Make in India' initiative, particularly in the defence sector, following the successful Operation Sindoor. 

Operation Sindoor, launched in response to the April 22 Pahalgam terror attack, showcased India's indigenous military capabilities. The operation's success has bolstered investor confidence in domestic defence manufacturing, aligning with the government's push for self-reliance under the Atmanirbhar Bharat mission. 

In contrast, Chinese defence stocks faced a downturn, dropping up to 9% following the unexpected ceasefire agreement between India and Pakistan. The de-escalation of tensions led investors to reassess the demand for defence equipment, particularly affecting companies like the manufacturer of the JF-17 fighter jet. India's defence sector has been on an upward trajectory, with indigenous defence production reaching a record high of ₹1.27 lakh crore in FY24, marking a 16.7% increase from the previous year. Defence exports have also seen a substantial rise, touching ₹21,083 crore, a 32.5% growth over the last fiscal. 

The government's commitment to enhancing defence capabilities is evident in its ambitious targets, aiming for ₹50,000 crore in annual defence exports by 2029. This vision is supported by policy reforms, increased FDI limits, and initiatives like the establishment of Defence Industrial Corridors in Tamil Nadu and Uttar Pradesh.

As India continues to strengthen its defence manufacturing and export potential, the stock market reflects this optimism, positioning the country as a significant player in the global defence landscape.