India’s Quest for Strategic Supremacy: From Retaliation to Resilience.

Indian equities declined for a second consecutive session on Friday, erasing nearly $83 billion in market capitalization, as escalating military tensions between India and Pakistan intensify.

The nuclear-armed rivals have been embroiled in heightened conflict since Wednesday, following India’s targeted strikes on multiple “terrorist infrastructure” sites within Pakistan—an action taken in retaliation for last month’s deadly attack in Indian-administered Kashmir. In response, Pakistan launched its own counterattacks, triggering a series of cross-border hostilities that have since intensified. India's military spending for 2024-25, which ranks fifth-highest in the world, saw a 1.6% increase, totalling $86.1 billion during the year.

• Why is the Defence budget so pivotal?

Well, the defense budget of India is as important as the education, health, and welfare budgets, but it plays a pivotal role amidst the geo-political tensions that arise and which can be unpredictable. Also, having a good defence budget can shape a country’s development trajectory.

• Role of 'Atmanirbhar Bharat' and Innovation

For decades, India has remained heavily reliant on imported defence equipment to meet its strategic needs. However, recent policy shifts under the Atmanirbhar Bharat initiative have significantly catalyzed domestic innovation within the defence manufacturing sector. India exports a wide range of defence equipment, including complete weapon systems like the BrahMos supersonic cruise missile, Akash air defence missiles, Pinaka rockets, and Dornier-228 aircraft. The country also exports various other items like artillery guns, radars, armoured vehicles, and personal protective gear. India's export portfolio includes both high-end technologies and more basic items like ammunition and small arms.

Furthermore, the Aero Summit that happened in Feb 2025 at Yelahanka Air Force Station in Bengaluru showcased India’s air power, homegrown innovations, and advanced global aerospace technology. This exhibition gave India an opportunity to be more visible and gain an edge. India's exports of defence equipment, including arms and ammunition, have jumped nearly 150% since 2020 to cross $2.40 billion in the fiscal year that ended in March 2024. However, its arms exports are lower than those of nations like Australia and South Korea, and far below those of China, the world's fourth-largest arms exporter.

Given the India-Pakistan war-like situation, especially after the violation of the ceasefire by Pakistan soon after the announcement of the ceasefire, it has become imperative for the defence systems to stay active throughout. We have seen how the S-400 has protected by neutralising and demolishing all the drones sent by Pakistan after the retaliation operation Sindoor was carried out. However, despite volatility, analysts note that investors may remain invested in India due to continued expectations of trade deals and economic resilience.

sources: https://www.reuters.com : economictimes.indiatimes.com : https://www.pib.gov.in www.livemint.com