Defence stocks in the spotlight as India, US to discuss $4 billion P-8I aircraft deal

Defence PSU stocks are likely to witness movement in the coming days, as reports indicate that a US delegation will visit India next week to negotiate the sale of six additional P-8I maritime patrol aircraft to the Indian armed forces.

The purpose of the visit is to negotiate the sale of approximately $4 billion worth of defence equipment to India, Bloomberg reported. The development comes as both the nations seek to strengthen their defence and trade relations amid ongoing tariff tensions.

Overall, the company is scheduled to receive 12 GE-404 engines by the end of the current financial year, ensuring production and delivery timelines for the LCA Mark-1A programme remain on track.

The report of the delegation’s visit comes as India-US trade negotiations are set to resume in Washington next week, following a pause after the US imposed additional tariffs on Indian imports due to New Delhi’s continued purchases of Russian oil.

Prime Minister Narendra Modi and US President Donald Trump have exchanged warm messages over the past few days, signalling an easing of recent tensions in bilateral ties.

Among defence stocks, PSU firms such as HAL, Bharat Electronics, Bharat Dynamics (BDL), Mazagon Dock Shipbuilders, BEML, and others are expected to be in focus.

Global conflicts (Russia-Ukraine, Israel-Hamas) brought back the spotlight on defence stocks. This, coupled with the government’s focus on building domestic capabilities, has further bolstered this sector. Finally, the recent India-Pakistan conflict has further heightened security concerns.

The Nifty India Defence index has gained over 2.1% in the last week. The sectoral gauge has zoomed over 37% in six months and has rallied nearly 18% since the beginning of 2025.

For a six-month period, shares of HAL and BDL have surged 32% each, BHEL has climbed 16.5%, BEML gained 66%, while Mazagon Dock zoomed 23.5%.

Last week, a report had suggested that defence sources have said that Moscow is studying possible investment plans to make the Su-57 in India. The development comes after Prime Minister Narendra Modi and Russian President Vladimir Putin’s recent closeness at the SCO Summit in China.

The report further stated that India has been looking forward to adding at least two to three squadrons of advanced fighter aircraft, with Russia’s Su-57 and America’s F-35 being the main contenders.

India and France on April 28 this year had signed an intergovernmental agreement to procure 26 Rafale (Marine) fighter jets for the Indian Navy under a ₹64,000-crore deal.

The agreement covers the supply of 22 single-seater and four twin-seater aircraft, along with associated weapons, simulators, training equipment and performance-based logistics support.

India has seen its defence exports grow by almost 34x in the past 10-11 years. It is gradually becoming a self-reliant producer with strong indigenous capabilities.