New Delhi, Feb. 20 -- Despite a sharp market sell-off on Wednesday, the defence sector showed some strength. The Nifty India Defence Index rose 4% as positive guidance from Defence Secretary Rajesh Kumar Singh, at a recent event, aided investor sentiments.

Singh said that the defence industry is at the threshold of a major expansion drive, as the government plans to relax foreign direct investment policies and industrial licensing procedures. These, he said, will encourage more public-private partnership in advanced manufacturing processes in the industry.

Investors also reacted positively to North Atlantic Treaty Organization (Nato) allies' plans for increased defence investment, a proactive measure aimed at deterring potential Russian...