As Russian President Vladimir Putin prepares to visit India for the 23rd India-Russia Annual Summit on December 4th and 5th, 2025, defense stocks in India are attracting significant attention. Market participants are keenly awaiting the outcomes of bilateral discussions, especially concerning potential agreements on advanced missile defense systems and fighter jets.
Analysts suggest that investors should closely monitor themes related to India-Russia defense cooperation, as announcements regarding local manufacturing, joint ventures, or technology transfers are likely. Developments in these areas could act as a catalyst for Indian defense public sector undertaking (PSU) stocks such as Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), and their related vendor ecosystem. This would reinforce the narrative of a multi-year domestic defense capital expenditure cycle.
The summit is Putin's first visit to India since the Russia-Ukraine war began and since India's Operation Sindoor. Defense cooperation, particularly a potential new S-400 air defense system contract, is expected to be a key focus during talks between Putin and Prime Minister Narendra Modi, reaffirming the strategic partnership between the two countries.
A notable aspect of a potential new S-400 deal is Russia's offer of up to 50% technology transfer for the S-400 missiles and supporting systems. This could enable Indian companies like Bharat Dynamics Limited (BDL) to participate in local assembly and accelerate the production of the 48N6 missile, which was approved in October. Nearly half of the S-400 support ecosystem could be indigenized, aiming to reduce costs and boost domestic defense capabilities. If implemented, this technology transfer would mark a significant step toward India's goal of self-reliance in advanced defense systems.
India and Russia are expected to explore renewed collaboration on various defense projects during the summit, including Moscow's offer to supply two to three additional S-400 regiments to the Indian Air Force. This offer comes as India's reliance on Russian military equipment remains high, with an estimated 60-70% of its arsenal originating from Russia.
Despite strong historical ties, Russia's share of India's defense imports has decreased considerably. According to the 2025 SIPRI report, India's defense imports from Russia accounted for 36% of its total imports for the 2020-2024 period, a significant decline from previous years. This decrease reflects India's diversification strategy and its intent to avoid over-dependence on any single country.
Analysts believe that while the structural India-Russia partnership remains stable, the near-term market reaction will depend on defense-related announcements, the visibility of technology transfers, and external geopolitical factors. The summit is expected to address trade imbalances between the two countries, with discussions focusing on reducing non-tariff barriers and increasing the purchase of agricultural products, medicine, and pharmaceuticals from India. Discussions may also include mobility of Indian talent into Russia. Overall, the key areas to watch include defense, technology transfer, deeper joint collaboration, and joint production of defense equipment.
