In the midst of rising tensions between India and Pakistan, the country’s defense companies have experienced a significant surge in market value. According to a report by Bloomberg, India’s defense sector has added over $5 billion to its market value following the escalation of tensions with its neighboring country. This comes after New Delhi accused Islamabad of harboring terrorists linked to a brutal mass shooting in Kashmir that claimed the lives of 26 civilians last month.
The situation took a turn for the worse when India struck nine “terrorist infrastructure” sites across the border in Pakistan in overnight attacks. As a result, a custom market index tracking ten Indian defense firms shows a growth of around 5% since the April 22 terrorist attack. This growth is largely attributed to expectations that these firms will benefit from the worsening geopolitical situation. Companies like Hindustan Aeronautics Ltd., a domestic aerospace firm, and Solar Industries India Ltd., a missile company, are among those that have seen an increase in their market value.
As of Wednesday, Mumbai-based Mazagon Dock Shipbuilders Ltd. saw a gain of as much as 4.6%, while Hindustan Aeronautics gained nearly 2%. The escalating situation has also had an impact on Indian Prime Minister Narendra Modi’s schedule, with reports suggesting that he has postponed his upcoming trips to Croatia, the Netherlands, and Norway. Furthermore, Modi will not be attending the celebrations in Moscow marking the 80th anniversary of victory in World War II, and instead, India will be represented by an alternate high-level delegation.
The ongoing tensions between India and Pakistan have sparked concerns globally, and the recent development in the defense sector is a clear indication of the impact of geopolitical situations on the economy. As the situation continues to unfold, it will be interesting to see how India’s defense companies continue to perform and how the country’s diplomatic efforts shape up in the coming days. With the international community keeping a close eye on the situation, one thing is certain – the relationship between India and Pakistan will be closely watched in the days to come.
