President Donald Trump has unveiled a proposal for a record-breaking $1 trillion defense budget for fiscal year 2026, aimed at significantly strengthening America’s military capabilities. This proposed budget represents a nearly 12 percent increase over current defense spending and is part of Trump’s broader national security agenda.
While he mentioned that some of the funding would come from savings driven by the Department of Government Efficiency, specific allocations remain undisclosed. The substantial rise in U.S. defense expenditure is expected to benefit Indian defense exporters, especially those supplying equipment and components to American defense firms.
India’s defence exports to the United States have surpassed $2.8 billion over the past five years, positioning the U.S. as the largest recipient of Indian defence shipments. In FY 2024-25 alone, India recorded all-time high defence exports worth Rs.23,622 crores (approximately $2.76 billion), with a significant share attributed to demand from the U.S. market.
Here are a few defence stocks which could benefit from these advancements:
Hindustan Aeronautics Ltd
With a market capitalization of Rs.2.75 lakh crore, the shares of Hindustan Aeronautics Ltd closed at Rs.4,101.05 per share on Friday, showcasing a 1.75 percent surge from its previous close.
Hindustan Aeronautics Limited (HAL) has been expanding its role in the U.S. defence supply chain through key collaborations and component exports. In June 2023, HAL signed an MoU with GE Aerospace to manufacture fighter jet engines for the Indian Air Force, further solidifying ties with American defence players. Over the years, HAL has supplied aircraft spares, engine parts, and structural components to U.S.-based companies like Boeing and Honeywell, contributing to their global defence platforms.
HAL’s export portfolio also includes the Light Combat Aircraft (LCA) Tejas and Advanced Light Helicopter (ALH Dhruv), along with the delivery of two Hindustan 228 transport aircraft to Guyana in FY 2023-24. As the U.S. ramps up defence spending, HAL is well-positioned to benefit through increased demand for its aerospace manufacturing capabilities. While HAL’s core focus remains the Indian Armed Forces, its strategic partnerships enable participation in joint ventures, technology transfers, and co-development projects with U.S. firms.
Bharat Forge Ltd
With a market capitalization of Rs.47,853 crore, the shares of Bharat Forge Ltd closed at Rs.1,004.05 per share on Friday, showcasing a 3.53 percent surge from its previous close.
Bharat Forge, through its defence arm Kalyani Strategic Systems Ltd (KSSL), achieved a major milestone by exporting Indian-made artillery cannons to the U.S. for the first time. In February 2025, it signed a Letter of Intent with U.S.-based AM General to supply 105mm and 155mm mounted, towed, and ultra-light gun systems, along with plans for co-developing next-generation artillery solutions.
In FY 2024-25, Bharat Forge secured defence export contracts worth USD 500 million, with a large share linked to the U.S. market. This deal highlights India’s growing stature as a reliable defence exporter. Chairman Baba Kalyani called the development “pathbreaking,” as KSSL continues to expand its global presence in high-tech military equipment.
Bharat Electronics Ltd
With a market capitalization of Rs.2.08 lakh crore, the shares of Bharat Electronics Ltd closed at Rs.285.30 per share on Friday, showcasing a 1.84 percent surge from its previous close.
Bharat Electronics Limited (BEL) has significantly expanded its presence in the U.S. market through strategic contracts and exports. In January 2022, BEL secured a $73 million contract with Hyperion Global Group LLC to develop, manufacture, and supply Internet of Things (IoT) devices for the U.S. market. This agreement also includes provisions to negotiate product upgrades worth up to $365 million over the next five years.
In March 2023, BEL received export orders totaling approximately $52 million, covering communication equipment, electronic assemblies, micromodules, and mechanical parts for clients in the U.S., France, and Israel. These developments reflect the growing global trust in BEL’s advanced manufacturing capabilities and support India’s push for defense and electronics exports under the ‘Aatmanirbhar Bharat’ initiative.
Written by – Siddesh S Raskar
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