India's arms trade surplus reached a record $691 million in FY26, marking a dramatic tenfold increase from $63 million in FY18, according to latest Datanomics data. The arms trade surplus represents a significant milestone in India's defence manufacturing capabilities, with arms exports rising threefold over the past eight years while imports doubled during the same period. When excluding volatile petroleum sector from total exports, arms accounted for 0.21% of India's outbound shipments in FY26, rising five times over nine years. This surge aligns with a major geopolitical shift as India's biggest partners such as the US and Israel have been replaced by Armenia, Romania, and Slovenia, reflecting changing global dynamics and strained ties with Turkey.
India has confirmed its intention to strengthen defence ties with the UAE amid reports of potential BrahMos missile exports, according to Ministry of External Affairs spokesperson Randhir Jaiswal. Responding to questions about reports of India selling BrahMos missiles to the UAE, Jaiswal stated "We have a close defence relationship with the UAE and we want to make these ties even stronger." However, he did not confirm the reported deal and added that the Defence Ministry would be in a better position to provide details. The MEA's statement comes as Reuters reported that discussions between India and the UAE over the potential sale of BrahMos and Akashteer systems are at an early stage but are moving quickly, with sources indicating the talks are progressing fast.
Shares of Bharat Dynamics and Bharat Electronics rose up to 2% on Monday following reports that India is in talks with the United Arab Emirates for the potential export of key defence platforms. Bharat Dynamics Ltd. climbed more than 2% to ₹1,401.7 per share on the National Stock Exchange (NSE), while Bharat Electronics gained 1.12% to ₹431.70, recovering from the previous session's decline. The positive market reaction reflects investor confidence in India's expanding defence export opportunities, with both companies positioned to benefit from potential UAE orders. The Nifty India Defence Index jumped 1.47% on Monday and recorded its highest-ever close, as reported by multiple sources, with overseas defence sales rising to more than $4 billion in FY26 according to government data.
The UAE is exploring new defence acquisitions after facing attacks from Iran during the recent Middle East conflict and is looking to enhance protection of critical infrastructure, including the Strait of Hormuz, a vital global energy route. Reuters quoted sources as saying the UAE has shown interest in a number of Indian weapon systems including BrahMos and Akashteer, with the talks currently at initial stages but progressing quickly. BrahMos, jointly developed by India and Russia, is among the world's fastest supersonic cruise missiles with a 290-km range and can be launched from land, sea and air platforms. The Akashteer system is an automated air defence control and reporting system developed by Bharat Electronics Ltd in collaboration with the Indian Army, designed to integrate radars, sensors and weapon systems for faster response against aerial threats. Any export of the BrahMos system will require Moscow's approval due to the joint development arrangement.
The potential UAE deal has highlighted India's extensive defence manufacturing ecosystem that contributes to the BrahMos programme. Bharat Dynamics Ltd (BDL), the production agency for the BrahMos missile system, is widely seen as the most direct beneficiary of additional domestic and export orders. Bharat Electronics Ltd (BEL) could benefit from interest in Akashteer, the automated air-defence command-and-control system developed jointly with the Indian Army. Hindustan Aeronautics Ltd (HAL) could gain given its role in integrating the air-launched BrahMos missile onto the Indian Air Force's Su-30MKI fighter aircraft, with the government recently approving procurement of more than 110 air-launched BrahMos missiles worth about ₹10,800 crore. Other companies positioned to benefit include Data Patterns for electronics and testing equipment, Solar Industries for missile warhead components, Premier Explosives for propellants, NIBE Ltd for missile canisters, and engineering firms such as Goodluck India and Paras Defence for various missile components.
India's defence exports have experienced dramatic growth, surging to over $4 billion in the year ending March 2026, compared to just $7.26 million in 2013-14, according to Indian government data. The Philippines signed a nearly $375 million BrahMos deal in 2022, making it the first overseas buyer of the missile system. With more than a dozen countries reportedly evaluating the missile system, including Malaysia, Thailand, Egypt, Saudi Arabia and Qatar, investors are increasingly viewing BrahMos not merely as a strategic weapon but as a long-term export opportunity for India's defence manufacturing ecosystem. Bharat Dynamics Ltd. operates under the Ministry of Defence as the primary manufacturer and integrator of the BrahMos missile system, while Bharat Electronics Ltd. has jointly developed Akashteer with the Indian Army.
