Defence Minister Rajnath Singh announced plans to increase private sector participation in defence manufacturing from 25-30% to 50%, triggering a sharp rally in private defence stocks on May 25, 2026.
Apollo Micro Systems led the gains with an 11% surge, while Astra Microwave climbed 5.3%, Paras Defence rose 5.36%, DCX Systems gained 4%, and Data Patterns added 3.6%. The Nifty India Defence index climbed 1.2% during afternoon trade.
Singh emphasised that private firms are evolving from supplying basic components to developing sophisticated weapon systems. The shift represents a strategic reorientation—moving defence manufacturing beyond the traditional dominance of public sector undertakings and ordnance factories.
“The private sector is not just a supplier of nuts and bolts in defence, but also a producer of state-of-the-art weapons systems. All have to work together to make India the hub of munitions and automation,” Singh said last week.
The government has outlined several initiatives to accelerate this transition, including policy reforms, FDI liberalisation, and a strategic partnership model. More concretely, the government has curated a list of 5,000 items for indigenisation, mandating that armed forces procure these domestically. Young innovators in the sector are also being encouraged through targeted initiatives.
On the ground, Singh inaugurated a new ammunition manufacturing unit in Shirdi, expected to employ 2,000 people and support MSMEs. The factory spans 200 acres and is set to export defence equipment globally.
The same event saw the unveiling of India’s first 300 KM Universal Rocket Launching System ‘Suryastra’ and the foundation stone laying for its missile complex.
