Indian defence companies have added more than $5 billion to their market value following a sharp rise in geopolitical tensions with neighbouring Pakistan, Bloomberg has reported. The surge comes as New Delhi intensifies its response to a deadly terror attack in Kashmir last month.
India has accused Pakistan of harbouring terrorists linked to the 22 April mass shooting that killed 26 civilians in Indian-administered Kashmir. In a retaliatory move, Indian forces reportedly carried out overnight strikes on Wednesday, targeting nine suspected “terrorist infrastructure” sites across the border.
Investor confidence in India’s defence sector has surged amid expectations of increased government spending on military preparedness. A custom index tracking ten domestic defence firms has risen by approximately 5% since the attack. Key beneficiaries include Hindustan Aeronautics Ltd., India’s state-owned aerospace manufacturer, and Solar Industries India Ltd., a leading missile and explosives company.
Mumbai-based Mazagon Dock Shipbuilders Ltd. saw its shares rise by as much as 4.6%, while Hindustan Aeronautics gained nearly 2% on Wednesday alone, underscoring growing market optimism around defence-linked investments.
In light of the escalating crisis, Prime Minister Narendra Modi has postponed upcoming state visits to Croatia, the Netherlands, and Norway. He is also expected to skip the 80th anniversary celebrations of the end of the Second World War in Moscow. India will instead be represented by a senior-level delegation.
