Stocks like Mazagon Dock, Bharat Electronics, and Bharat Forge have surged in recent years, riding a wave of bullish sentiment powered by rising defence exports, policy reform, and closer strategic ties with Washington. The sector, long dismissed as a sleepy backwater of government contracts and delays at the Defence Research and Development Organisation, is now being re-rated by investors who see it as India’s next sunrise story.At the centre of investor excitement is a proposed Reciprocal Defence Procurement Agreement between India and the United States. If signed, it would grant Indian companies ‘national’ status in US defence contracts, bypassing the restrictive ‘Buy American’ rules that have historically locked them out of the Pentagon’s $900 billion annual budget. For Indian companies, that’s a master key if they develop the wherewithal to turn the lock.
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