India’s defense sector outpaced the market today, with Bharat Electronics Ltd (BEL) and Dynamatic Technologies surging 15% and 18%, respectively, after the government fast-tracked a $5 billion indigenous drone defense program. The move follows the interception of a Pakistan-linked drone carrying advanced Turkish Bayraktar missiles near the LoC.
While the Nifty 50 fell 2.8%, the Nifty Defense Index rallied 12%—its sharpest gain since the 2019 Balakot strikes. “Investors see defense as the only safe bet,” said Motilal Oswal’s Nitin Agarwal. Meanwhile, the rupee’s slide to 86.50 forced RBI to inject ₹25,000 crore ($3B) into forex markets.
Strategic Shifts:
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Indigenous Push: DRDO unveiled “Project Guardian,” a AI-powered anti-drone system.
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Import Bans: India halted Turkish defense imports, impacting Tata-Baykar drone JVs.
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Diplomatic Fallout: U.S. urged restraint, while China blamed India for “regional destabilization.”
