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List of Best Defence ETFs in India 2026

India’s defence sector continues to expand, with domestic defence production reaching ₹1.54 lakh cr in FY 2024-25, up 18% year-on-year, and exports reaching a record ₹23,622 cr. The defence budget for FY 2025-26 also increased to ₹6.81 lakh crore, underscoring the government's sustained focus on modernisation and indigenisation.

Top Defence ETFs in 2026

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NameStocks (2)↓↓Sub-SectorSub-Sector↓↓Market CapMarket Cap↓↓Close PriceClose Price↓↓PE RatioPE Ratio↓↓1D Return1D Return↓↓1M Return1M Return↓↓6M Return6M Return↓↓1Y Return1Y Return↓↓PB RatioPB Ratio↓↓Return on EquityReturn on Equity↓↓ROCEROCE↓↓Dividend YieldDiv Yield↓↓Debt to EquityDebt to Equity↓↓Volatility vs NiftyVolatility vs Nifty↓
1.Groww Nifty India Defence ETFGROWWDEFNCEquityEquity46.2846.2880.6580.65---1.32-1.323.303.303.193.1934.2634.26----------2.312.31
2.Motilal Oswal Nifty India Defence ETFMODEFENCEEquityEquity6.656.6588.6488.64---1.13-1.133.083.083.313.3134.6734.67----------2.342.34
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Disclaimer: Please note that the above table is for informational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.

Selection criteria: Based on publicly available information | Sorted by market capitalisation from highest to lowest.

Overview of Top Defence ETFs in India

Motilal Oswal Nifty India Defence ETF

Motilal Oswal Nifty India Defence ETF tracks the Nifty India Defence Index, providing exposure to companies engaged in defence manufacturing, aerospace, electronics, and strategic equipment. The ETF reflects India’s growing defence production ecosystem, supported by rising government spending, export expansion and the push for indigenisation under Make in India initiatives.

Groww Nifty India Defence ETF

Groww Nifty India Defence ETF replicates the Nifty India Defence Index, providing diversified access to leading defence and aerospace companies. It captures trends such as increasing domestic procurement, higher defence exports and multi-year order pipelines across public and private manufacturers, aligning with India’s focus on strengthening local defence capabilities.

What are Defence ETFs?

Defence ETFs invest in companies that operate in aerospace, defence manufacturing and related technologies. They track an index that includes firms supplying equipment, systems, and services to the defence and security sectors. These ETFs offer diversified exposure to defence-focused businesses through a single traded unit.

How to Invest in Defence ETFs?

Investing in Defence ETFs in India using Tickertape is a straightforward process. Tickertape is a powerful stock analysis and screening tool that helps you make informed investment decisions. Here’s how you can use Tickertape to invest in Defence ETFs:

  1. Sign Up and Log In: You can create an account on the Tickertape or log in if you already have one.
  2. Search for Defence ETFs: Go to Tickertape Stock Screener and search for the ‘Defence ETF’.
  3. Use Filters: You can apply over 200 filters to get stocks sorted based on criteria like market cap, P/E ratio, and more to create Defence ETFs list.
  4. Analyse Stock Data: Tickertape provides comprehensive data on each stock, including financials, performance metrics, future projections, red flags, and more. You can review this data to assess each company’s health and potential in depth.
  5. Add to Watchlist: You may keep track of potential investments by adding them to your watchlist.
  6. Invest Through Your Broker: Once you’ve decided on a stock, you can place a buy order through your brokerage account linked to Tickertape.

You can stay updated with each of your favourite stocks’ alerts and announcements with Tickertape Alerts. Further, you can analyse your overall portfolio and potential red flags in it by connecting it to Tickertape. Check out detailed analysis of your portfolio now!

Advantages of Investing in Defence ETFs in India

Exposure to Rising Defence Production and Exports

India’s defence production reached a record ₹1.54 lakh crore in FY 2024-25, up about 18% year-on-year, while defence exports hit ₹23,622 crore, a historic high reflecting growing global demand. ETFs can mirror this expanding manufacturing base of defence companies.

Participation in a Growing Budgetary Allocation

The Indian government increased the defence budget to about ₹6.8 lakh crore for 2025-26, marking a roughly 9.5% annual rise, with substantial capital outlay on equipment and modernisation. Defence ETFs tied to domestic producers can indirectly reflect this fiscal momentum.

Link to Self-Reliant Manufacturing Push

More than 65% of defence equipment is now produced domestically, a significant shift from earlier reliance on heavy imports. This trend underpins “Make in India” initiatives and enhances the growth prospects of defence manufacturing firms included in ETFs.

Exposure to Global and Strategic Deals

Major defence procurement proposals, such as a proposed ₹3.25 lakh crore fighter jet acquisition, highlight robust long-term market potential for defence manufacturers participating in global value chains and technology transfers.

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Risks of Investing in Defence ETFs in India

Heavy Dependence on Government Spending

While the overall defence budget has risen, capital acquisition (new equipment purchases) forms only a portion of total expenditure. Changes in procurement strategies or budget prioritisation can affect defence OEM revenues, making ETF returns sensitive to policy shifts.

Long Contract and Delivery Cycles

Defence procurement processes are lengthy and complex, with contracts spanning several years. Delays in finalising deals or delivery schedules can affect revenue visibility for constituent firms within ETFs.

Sector Concentration and Index Depth

The number of large pure-play defence companies in India remains limited, and many firms have diversified into other sectors. This can dilute pure defence exposure in sector ETFs, making performance partly dependent on non-defence segments.

Geopolitical Uncertainty Impact

India’s defence spending patterns and procurement priorities are influenced by geopolitical tensions, regional security dynamics, and global defence alliances, which can introduce volatility in the sector’s stock performance.

Factors to Consider Before Investing in Defence ETFs

Index Composition and Domestic Exposure

Check how much weight an ETF allocates to pure defence manufacturers versus diversified industrial companies. A higher percentage of IDDM (Indigenously Designed, Developed and Manufactured) firms better tracks domestic defence sector growth.

Order Backlog and Production Targets

India’s defence production has grown significantly—hitting ₹1.54 lakh crore in FY 2024-25—and the government aims to reach higher production targets by 2029. ETFs tracking firms with healthy order books and execution capability can behave differently from those with weaker backlogs.

Export Participation of Constituents

Defence exports of ₹23,622 crore in FY 2024-25 suggest emerging global market opportunities. ETFs that include export-oriented defence companies may capture growth beyond domestic budget cycles.

Policy and Procurement Priorities

India’s evolving policies on self-reliance (Atmanirbhar Bharat) and indigenisation create changing competitive dynamics. Changes in defence offsets, R&D incentives, or procurement rules can reshape sector valuations.

Capital Outlay vs Revenue Allocation

In the 2025-26 budget, a significant portion of total defence spending goes toward salaries and pensions, while capital expenditures (equipment and modernisation) are comparatively smaller. Knowing this mix helps assess the growth prospects of companies driving ETF performance.

Conclusion

Defence ETFs offer a way to track the performance of companies participating in India’s growing defence ecosystem, capturing trends in increasing domestic production, export growth, and policy support for indigenisation. Their performance reflects broader industry dynamics rather than individual stock moves. To analyse and compare different defence-linked ETFs using detailed metrics, sector filters, and historical data, investors can explore the Tickertape ETF Screener, which streamlines research across funds with industry context and performance insights.

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Frequently Asked Questions on Defence ETFs

  1. What are defence ETFs?

    Defence ETFs are exchange-traded funds that track indices made up of companies involved in defence manufacturing, aerospace, defence technology, electronics, or related services. They offer a way to follow the performance of India’s growing defence ecosystem through a single market-listed product.

  2. What are the best defence ETFs?

    As per January 15th, 2026, the following are the best defence ETFs: Motilal Oswal Nifty India Defence ETF; Groww Nifty India Defence ETF.

  3. Is it worth investing in defence ETFs?

    Defence ETFs reflect themes such as rising domestic defence production, export momentum, and government spending. Their performance depends on index composition, order flows, policy decisions, and sector demand rather than individual stock behaviour.

  4. Are defence ETFs suitable for long-term investors?

    Defence ETFs follow multi-year themes such as indigenisation, procurement cycles, and manufacturing expansion. Suitability varies based on individual goals, risk appetite, and time horizon.

  5. How do defence ETFs perform during war or geopolitical conflict?

    Geopolitical tensions can influence defence sector sentiment, procurement priorities, and budget allocations. These developments may impact defence ETF movements, but outcomes depend on multiple economic and policy factors.

Disclaimer: This article is for informational purposes only. The content of the article including securities/investment products mentioned if any, should not in any manner be construed as an investment advice, recommendation, offer, solicitation to buy/hold/sell any securities/investment products. The securities quoted if any, are for illustration only and are not recommendatory. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered financial advisor before investing.