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Can India Execute Its Defence Orders?
Good Morning. India’s defence manufacturers are entering 2026 with record order books and very little room for delays. After a year of policy reform and big approvals, India's real challenge lies in execution. Will India be able to deliver aircraft, ships and systems on time, scale factories fast enough and keep supply chains moving?
In other news, the Finance Ministry asked financial institutions to report vigilance issues related to its appointees, promptly. Meanwhile, home sales took a hit in 2025 due to higher prices and layoffs in the IT sector.
For India’s Defence Manufacturers, 2026 Will Be All About Execution
What?
India’s defence manufacturers head into 2026 with order books fuller than ever, and with far less room for error. After a year of intense tendering activity and policy reform, the question is no longer about whether orders will come, but whether companies can execute them on time, at scale and if they can do so without stretching already tight capacities.
With approvals largely in place and capital allocations on the rise, defence procurement is expected to remain elevated over the next 18–24 months.
However, in 2026, success for the sector will depend less on new announcements and more on execution: how quickly companies turn orders into deliveries, expand capacities, and stabilise supply chains under tighter timelines.
Why It Matters
Analysts cautioned that execution will define outcomes in 2026.
“India’s defence order books are robust, indicative of strong revenue for the next two to three years. Most capacities are over-booked, so what we would look out for in 2026 and beyond would be the execution of these orders — and the availability of required resources, skill-sets, people, MSME supply chains and capital, to fulfil present and future orders,” said Jyoti Gupta, lead research analyst with Nirmal Bang.
Supply chains are also key to exports. A Client Associates spokesperson highlighted: “Healthy order books support sustained execution while supply chain and R&D capabilities become critical differentiators as exports scale.”
India’s defence exports have risen more than 15-fold over the last eight years, with potential to double to Rs 50,000 crore within the next five years, according to a recent B&K Securities note.
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Rs 1.6 trillion
That’s how much foreign investors pulled out of Indian equities in 2025, marking the largest annual exit on record.
Here is how the year’s flows shaped up:
• FPIs were net sellers in eight of the 12 months, with only April, May, June and October seeing inflows.
Total foreign portfolio investment (FPI) outflows for 2025 stood at about Rs 1.58 lakh crore in equities, even as FPIs bought over Rs 59,000 crore in Indian debt.
Context: Analysts link the selling to persistent global pressures, including a strong US dollar, elevated US bond yields and geopolitical uncertainty that has dampened risk appetite for emerging markets.
Future: Some strategists, however, remain cautiously optimistic about 2026. Garima Kapoor, deputy head of research and economist at Elara Securities India, told PTI that foreign flows could rebound if nominal growth and earnings pick up, the US–India trade deal closes, and Federal Reserve rate cuts soften the dollar.
Himanshu Srivastava, principal manager-research at Morningstar Investment Research India, said the timing and pace of global rate cuts and tariff developments will be key to any FPI return.
Home Sales Soften In 2025
Home sales in the top seven cities fell 14% in 2025 to 3.95 lakh units as compared to 4.59 lakh units in 2024. Home sales value, however, rose 6% to Rs 6 lakh crore as compared to Rs 5.68 lakh crore in 2024, as per a report by real estate consultancy firm Anarock.
Turning Point: The softening of home sales is attributed to hardening property prices, layoffs in the IT sector, geopolitical tensions and other uncertainties, after four years of strong growth.
Pivot: “The average residential price growth rate tapered down from double digits in previous years to single digits in 2025,” said Anuj Puri, chairman of Anarock Group. New launches in 2025 saw a 2% annual increase – from 4.12 lakh units in 2024 to 4.19 lakh units in 2025.
Review Of Power Trading Fee
Power regulator Central Electricity Regulatory Commission (CERC) is mulling rationalisation of power trading fee, PTI reported. A CERC official said that they’ve firmed up a staff paper on 'Review of Transaction Fee charged by the Power Exchanges' in December 2025.
Why It Matters: The move assumes importance as the regulator approved market coupling this July. The move centralises price discovery for exchanges, replacing the current system of multiple prices across platforms. It is proposed to be introduced in a phased manner starting January 2026.
The Shift: The regulator is known to be examining the current transaction fee framework, capped at 2 paise per unit. Suggestions are afoot about a fixed transaction fee of 1.5 paise per unit for most trading segments. As per the existing structure, exchanges typically charge close to the ceiling.
FinMin Bats For A Tight Vigil
The finance ministry directed public sector banks and financial institutions, including insurance companies, to promptly report vigilance-related matters concerning whole-time directors (WTDs) of their companies, PTI reported on Sunday.
Context: The directive comes after several instances where adverse information about board-level appointees was not promptly reported. Such information, be it court observations or inputs from enforcement agencies are being reported only when vigilance clearance is sought by officers.
The Scoop: Earlier this year, the government demoted Union Bank of India Executive Director (ED) Pankaj Dwivedi to General Manager (GM) of Punjab & Sind Bank. In an ongoing case in the Delhi High Court, it was alleged that the appointment violated regulations due to the lack of vigilance clearance.
Obesity To Boost Pharma Growth
Obesity drugs could emerge as a key growth driver for the pharma industry, as new weight-loss therapies expand treatment beyond diabetes, Sun Pharmaceutical Industries Managing Director Kirti Ganorkar said.
The Scoop: He added that improving access to GLP-1-based treatments will help address the growing burden of lifestyle diseases such as obesity and diabetes.
Break: The comments come amid a broader recovery in the sector. Ratings agency ICRA projects revenue growth of 7-9% for its sample set of Indian pharmaceutical companies in FY2026, supported by 8-10% growth in the domestic market and 10-12% growth in Europe, according to its sector outlook. ICRA also noted that growth in the US market is likely to moderate due to price pressures and regulatory headwinds.
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