India’s defense sector presents a strong investment opportunity in 2025, fueled by record budget allocations and a strategic pivot to self-reliance. The Union Budget 2025-26 earmarked ₹6.81 lakh crore (~$78.8 billion) with a 9.5% increase from the previous year, emphasizing indigenous procurement with 75% of modernisation funds allocated to domestic industries. India’s annual defense production hit an all-time high of ₹1.50 lakh crore, growing 18% year-on-year, supported by both public and private sectors. Recent Defense Acquisition Council approvals totaling ₹67,000 crore include cutting-edge drones, radars, and missile systems, strengthening India’s strategic capabilities. Analysts like Narendra Solanki highlight robust demand, strong order books, and government policy continuity, making defense stocks attractive with projected revenue growth of 15-17% in FY26. The government’s push through initiatives like Atmanirbhar Bharat and Defence Industrial Corridors underpins a positive long-term outlook for domestic defense manufacturing and exports, encouraging investor confidence in this expanding sector.