India\u2019s FY25 defence capex stays at 0.49% of GDP vs 1% in US; Private sector defence production hits milestone \u2013 key stocks in focus<\/p>\n
New Delhi, July 11, 2025 \u2013 India may be at par with global economies in terms of total defence expenditure as a percentage of GDP (~1.8\u20132%), but it continues to significantly lag behind in capital investment, especially when compared to countries like the US, UK, and EU. In FY25, only 24.9% of India\u2019s \u20b96.2 lakh crore defence budget is earmarked for capital expenditure (capex) \u2014 well below the 37% in the US, 33% in the UK, and 31% in the EU.<\/p>\n
This capex-GDP mismatch is critical as India seeks to modernise its armed forces and boost indigenous production amid rising geopolitical tensions in the Indo-Pacific and Middle East. Experts argue that unless capex allocation improves, defence readiness and domestic manufacturing targets could face serious constraints.<\/p>\n
Also Read : TCS Q1 Beats Estimates with Rs.12,760 Cr Profit; Declares Rs.11 Dividend<\/a><\/p>\n India\u2019s defence capex in FY25: \u20b91.55 lakh crore (0.49% of GDP)<\/p>\n<\/li>\n EU average capex: 0.4% of GDP<\/p>\n<\/li>\n UK: 0.6% of GDP<\/p>\n<\/li>\n US: 1% of GDP, rising from 0.92% in FY17<\/p>\n<\/li>\n India: Declined from 0.56% in FY17 to 0.49% in FY25<\/p>\n<\/li>\n<\/ul>\n Despite a steady defence budget, the capex share has remained flat at ~25% over 8 years, showing a limited structural shift in India\u2019s procurement priorities. \u201cWe will seek to increase the share of defence expenditure in GDP from 1.9% to 2.5%,\u201d a senior official from the Defence Ministry said, echoing similar strategies announced by NATO nations.<\/p>\n With FY25 marking a pivotal year for India\u2019s defence sector, traders are closely watching defence-linked stocks, especially in the private space. According to government data, private firms are expected to contribute 25% of India’s total defence production this fiscal, a new record. The number of indigenised items has doubled to 14,000 between FY23 and FY25, largely driven by startups and MSMEs.<\/p>\n Bharat Electronics (BEL) \u2013 PSU major with strong visibility from radar, missile systems<\/p>\n<\/li>\n HAL, Mazagon Dock, BEML \u2013 with strong order books and indigenous push<\/p>\n<\/li>\n Data Patterns, Paras Defence, Astra Microwave \u2013 private players benefiting from import substitution<\/p>\n<\/li>\n<\/ul>\n While defence stocks have rallied over the past year, market participants believe the next leg of growth will come from the execution of Make-in-India contracts, export approvals, and visibility on multi-year orders.<\/p>\n As India negotiates strategic defence pacts and explores tech transfer with the US, France, and Israel, the market anticipates more policy clarity on increasing capex allocation. Global volatility, China\u2019s assertiveness, and the Russia-Ukraine war are likely to keep global defence stocks buoyant.<\/p>\n Traders should stay tuned for updates from the Defence Acquisition Council (DAC), budget reallocations in the upcoming Parliament session, and new orders under the iDEX and DAP frameworks.<\/p>\n India\u2019s FY25 defence capex stays at 0.49% of GDP vs 1% in US; Private sector defence production hits milestone \u2013 key stocks in focus New Delhi, July 11, 2025 \u2013 India may be at par with global economies in terms of total defence expenditure as a percentage of GDP (~1.8\u20132%), but it continues to significantly […]<\/p>\n","protected":false},"author":4,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-11371","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/11371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=11371"}],"version-history":[{"count":3,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/11371\/revisions"}],"predecessor-version":[{"id":11376,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/11371\/revisions\/11376"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/11372"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=11371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=11371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=11371"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=11371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Capex Trends and Global Comparison<\/h2>\n
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Market Impact and Sectoral Signals<\/h2>\n
Stocks to Watch:<\/h3>\n
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Outlook Ahead<\/h2>\n
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