India is leveraging Free Trade Agreements (FTAs) as strategic tools to boost its defence, technology, and economic sectors amid global trade uncertainties. Moving from a cautious to a calculated engagement approach, India aims to secure dual-use technologies, access critical minerals, and enhance defence exports while protecting MSMEs and strategic autonomy. FTAs with partners like the US, EU, UK, and UAE serve as platforms to promote co-development, technology transfer, and supply chain resilience. India must balance growth with safeguards in public procurement, IPR, and cybersecurity, ensuring FTAs align with its broader security and strategic objectives.
Operation Sindoor showcased India’s growing defense self-reliance and technological prowess through the successful deployment of indigenous systems like the Nagastra-1, SkyStriker drones, Akash air defense, and BrahMos missiles. It highlighted seamless integration of legacy and modern systems, supported by indigenous electronic warfare, communication, and radar networks. The operation exposed weaknesses in Pakistan’s Chinese-made defenses and enhanced India’s global defense credibility. This triumph emphasized India’s capability to deliver high-impact results with cost-effective systems, boosting export potential and inviting international collaboration. Operation Sindoor marks a transformative milestone in India’s journey toward becoming a global leader in defense innovation and manufacturing.
The 2025 tariff wars have destabilized the global defense industry by disrupting intricate supply chains, raising costs, and straining geopolitical alliances. Defense production, heavily reliant on rare earth elements and semiconductors, faces delays and cost inflation due to tariffs and export bans. Major arms producers like the U.S., EU, China, and emerging exporters like India are significantly impacted. India, facing U.S. tariffs and supply disruptions, must diversify suppliers, invest in domestic capabilities, and forge new alliances to mitigate risks. Strategic partnerships, R&D investments, and defense trade agreements are essential to sustaining India’s defense industry amid global instability.
India’s quest for self-reliance in military hardware has been underway for more than three decades now. While numerous committees have been formed over the years to examine the issue and recommend the way forward and incremental measures have been introduced from time to time, it is only recently that the MOD is in mission mode to achieve a transformation in the Indian military Industrial complex. The adverse effects of the Russia – Ukraine war on the delivery of equipment and spares from Russia as well on global supply chains, has highlighted the urgency of this transformation, especially in light of the tensions on our northern borders. Towards this end various measures have been implemented, primarily by way of procurement policies focused on indigenous products, discouragement of imports, rationalization of tax structures to provide a level playing field to all players private or public, encouragement of exports, incentives for SMEs/MSMEs, funding for defence innovations, streamlining of acquisition procedures including defence offsets, to name a few. The key agent for these changes has been the Defence Acquisition Procedure 2020 (DAP 2020). It is however appropriate at this stage to assess the adequacy of these measures and identify what more can be done.
India’s defence industrial base (DIB) remains weak despite decades of foreign equipment purchases. Countries like Turkey, South Korea, and Israel leveraged smaller procurements to develop robust defence ecosystems. India’s lack of clear policy, accountability, and strategic coordination has resulted in over 65% dependence on imports. A Defence Industrial Ecosystem (DIE) is essential for self-reliance, integrating government, industry, R&D, and academia. Establishing an independent Defence Technology Commission (DTC) under the PMO, supported by an Inter-Ministerial Committee, can drive policy, innovation, and accountability. Transparent, well-structured policies, strategic global partnerships, and a competent workforce are critical for atmanirbharta in defence.
India’s defense industry is well-positioned to tap into Europe’s €800 billion “ReArm Europe” initiative, leveraging cost-effective manufacturing, faster delivery, and strategic alignment. Key focus areas include artillery and ammunition (ATAGS, 155mm shells), missile systems (BrahMos, Akash), drones (ISR platforms), and cybersecurity (EW systems). India should push exports via MoD-to-MoD talks, co-production with European firms, and offset deals to bypass protectionism. With a 30-50% cost advantage over U.S./EU systems, Indian firms can secure a €10 billion+ market share. Urgent policy reviews and proactive industry leadership are needed to capitalize on this rare opportunity.
