Indian Council of World Affairs

Abstract: The EU-India Strategic and Defence Partnership (SDP) marks a milestone step in the EU’s “ReArm Europe” plans and India’s “Make in India” ambitions. It could strengthen defence industry collaboration between India and Europe while promoting equipment sales and diversifying defence sources for both. 

After nearly two decades of negotiations, India and the European Union (EU) signed the much-awaited Free Trade Agreement (FTA) on 27 January, described by both sides as a “mother of all deals”.[i] The EU-India FTA, which was signed amid the expanding US tariffs and protectionist trade practices, could allow the two signatories access to each other’s markets and diversify their economic resilience. However, amid the excitement over trade and business, the launch of the Security and Defence Partnership on the sidelines of the pact was probably less focused.[ii]

While the two partners have already advanced with bilateral trade in FY 2025–2026, exceeding $136 billion in merchandise and $83 billion in services,[iii] the SDP may bring fresh energy into the defence and security sector, contributing to their respective economies. The SDP establishes a framework for cooperation that includes maritime security, cyber threats, counterterrorism, space security, hybrid threats, and critical infrastructure protection, and, most importantly, defence industrial collaboration and capacity building.[iv] Given the EU’s “ReArm Europe” plans and India’s “Make in India” vision, the SDP is anticipated to strengthen partnerships and investment in defence ecosystems, thereby enhancing the business environment across defence and security domains.

Catalysing Two Distinct Ambitions

In March 2025, the European Union launched its “ReArm Europe Plan/Readiness 2030” initiative, partly over concerns encompassing the Russia–Ukraine war, China’s rising military and economic capabilities, and straining transatlantic dynamics, among others.[v] The initiative seeks to mobilise over €800 billion in defence spending by the end of 2030, strengthening Europe’s defence industries and reducing reliance on traditional arms suppliers,[vi] mainly the US. Here, it is worth noting that the North Atlantic Treaty Organisation (NATO) allies, during the NATO Summit held in The Hague in June 2025, committed to increasing defence spending to 5 per cent of their GDP by 2035.[vii] While the two initiatives — from the EU and NATO — are different, their approach and goals would complement each other, as 23 of 27 EU members belong to NATO.

On the other hand, India has been consistent in its commitment to self-reliance in defence production through its “Make in India” initiative, launched in 2014.[viii] Backed by the Atmanirbhar Bharat Abhiyan in 2020 (Self-Reliant India),[ix] the Make in India initiative seeks to build an indigenous defence manufacturing capacity, increase defence production and exports, facilitate collaboration with foreign OEMs through technology transfer, reduce import dependencies, and develop a robust defence supply chain aligned with India’s long-term strategic and defence requirements. Consequently, India's defence industrial base has achieved fruitful results by producing a variety of weapons systems, subsystems and munitions over the past decade, with a record surge in exports ($2.76 billion in FY 2025).[x] However, despite significant success in production and export goals, India has relied on foreign countries for certain technologies and weapons systems.

Welcoming the Framework on SDP

The recently signed EU-India Security and Defence Partnership could perfectly fuse the EU’s rearmament drive with India’s defence industrial ambitions. For several decades, the EU had been focusing on economic resilience. However, amid global turmoil and instability, it has decided to shift its focus beyond the economy to strengthen its defence and security. Following the EU’s paradigm shift, the SDP could offer ample opportunities to explore partnership and collaboration in the defence and security sector.

Opportunities for Defence Industry Collaboration:

While the SDP doesn’t mention any specific weapon systems, the framework for industrial cooperation could lead to joint research and development and bilateral projects, including opportunities for co-development, co-production and technology sharing. Indian defence manufacturers could benefit from the European industry’s expertise in key sectors, such as aerospace, submarines, munitions, cyber warfare, and electronic, IT and communications systems, and related spin-off technologies for civilian sectors. The EU-India SDP may provide indirect support or assistance, in the form of technology and expertise sharing, to Indian industries in the aviation and aerospace sector, for which New Delhi has been striving for indigenisation for decades. The defence industry collaboration can spur innovation in India in new & emerging technologies, such as AI, quantum computing, internet infrastructure, etc.

Over the past several years, India and Europe have collaborated on several projects, such as the Tata–Airbus joint production of the C–295 transport aircraft[xi], the Reliance–Diehl contract for precision ammunition,[xii] and the Thales–MKU Limited contract for the co-development and production of the ELFIE Night Vision Device (NVD),[xiii] among others. While industrial collaborations are often made through bilateral mechanisms, the SDP framework could streamline as well as give impetus to the bilateral negotiations, furthering India’s Make in India aspirations and contributing to the EU’s industrial and defence investment goals.

Arms Trade Diversification:

The SDP could leverage arms trade between the two partners, enabling them to access each other's markets. The EU’s “ReArm Europe” initiative could offer Indian defence manufacturers an opportunity to access the European defence market, aligning with Europe’s diversification plan and its security requirements. For the EU, the Indian market provides an avenue to diversify suppliers and de-risk supply chain dependencies from dominant traditional partners. Engaging with India could open access to cost-competitive defence systems and subsystems, as well as a pool of skilled labour for its defence industry.

On the other hand, India could also diversify its arms sources, much like it did with France in recent years. India could also gain access to advanced European technology for certain high-tech weapon systems, such as aircraft, submarines, aircraft carriers, sensors and radars, drones, anti-drone systems and electronic warfare systems. Currently, India has one of the largest defence markets, accounting for over 8 per cent of global arms imports for over a decade[xiv] and offering robust opportunities for defence industrial collaboration. Its exports are, however, also growing, especially since the last decade or so. Learning from the European industry about standardisation in defence systems and technologies can provide India a lever for furthering its export potential. 

Counterterrorism and Capacity Building: Another major area of cooperation would be counterterrorism and capacity building between the two partners. India’s decades of experience in handling and countering various forms of terrorism, which has been a grave concern for Europe in recent years, could be an opportunity for the EU to manage and build its capabilities vis-à-vis these shadow threats. The SDP also mentioned counterterrorism in its draft framework, aligning closely with the security preparedness of both India and Europe. Within this framework, India and Europe could engage in intelligence sharing regarding terrorist networks, including trends in radicalisation, recruitment, online propaganda, financing channels, arms and equipment smuggling, and surveillance and monitoring.

Their security and law enforcement agencies could engage in joint exercises and training programmes to counter both traditional and non-traditional forms of terrorism, such as cross-border and coastal terrorism, insurgency, cyberterrorism, and lone-wolf attacks. India’s experience, combined with Europe’s advanced technologies in surveillance, drone and anti-drone systems, precision weapons, and electronic warfare could create a protective shield against terrorist activities. While India’s Close-Quarter Battle (CQB) capabilities are largely indigenous, it may incorporate Europe’s smart, short-barrelled weapon systems, such as those from Germany, Belgium and Italy, to enhance its operational efficiency.

Conclusion

The EU-India Security and Defence Partnership seems more than a symbolic agreement. The SDP offers a promising framework for strengthening strategic ties and addressing shared security challenges and opportunities. Once approved and implemented, Europe’s ambitious “ReArm Europe” plans and India’s “Make in India” initiative could benefit simultaneously and in multifaceted ways, including resilient defence supply chains, diversified options, shared progress and operational cooperation across the four theatres of warfare, viz., air, land, sea, and space.

While providing opportunities to strengthen political ties, the SDP paves the way for deepening bilateral defence cooperation between India and EU member states, easing investment flows, meaningful technology transfer, co-development opportunities and a shared response to terrorism and cyber threats. The SDP cannot automatically institutionalise the transfer of technology and other sensitive issues in defence industry collaboration. Hence, before implementation, India must insist on core issues, such as joint development and technology transfer for high-tech defence systems, and vexed issues pertaining to intellectual property regimes will have to be sorted along the way, given that the defence industry in Europe is private sector-led, while in India, much of it continues to be in the public sector.

The SDP could be instrumental in changing the narratives of smaller EU countries regarding the perceptions about India, India-Europe relations, India’s defence spending and decision-making. The SDP will provide an umbrella, further expanding the scope of their bilateral collaboration with India across a range of issues, including defence and security.

*****

*Dr. Mukesh Kumar, Research Associate, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal. 

Endnotes

[i] EMPOWERING india[at]2047 (n.d.) INDIA AND EUROPEAN UNION TRADE AGREEMENT. FACTSHEET. Available at: https://www.commerce.gov.in/wp-content/uploads/2026/01/Factsheet-on-India-EU-trade-deal-27.1.2026.pdf.

[ii] “Security and Defence: EU and India Sign Security & Defence Partnership | EEAS.” Accessed March 5, 2026. https://www.eeas.europa.eu/eeas/security-and-defence-eu-and-india-sign-security-defence-partnership_en.

[iii] “FACTSHEET.” Accessed March 5, 2026. https://www.pib.gov.in/www.pib.gov.in/Pressreleaseshare.aspx?PRID=2219146.

[iv] “Security and Defence: EU and India Sign Security & Defence Partnership | EEAS.” Accessed March 5, 2026. https://www.eeas.europa.eu/eeas/security-and-defence-eu-and-india-sign-security-defence-partnership_en.

[v] Clapp S, Höflmayer M, Lazarou E, et al. (2025) ReArm Europe Plan/Readiness 2030. EPRS | European Parliamentary Research Service. PE 769.566, report, April. Available at: https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/769566/EPRS_BRI(2025)769566_EN.pdf.

[vi] Ibid.

[vii] Official Texts and Resources | NATO. “The Hague Summit Declaration.” Accessed March 5, 2026. https://www.nato.int/en/about-us/official-texts-and-resources/official-texts/2025/06/25/the-hague-summit-declaration.

[viii] “MAKE IN INDIA 2.0.” Accessed March 5, 2026. https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1694804®=3&lang=2.

[ix] India Brand Equity Foundation. “Self-Reliant India (Aatm Nirbhar Bharat Abhiyan) | IBEF.” Accessed March 5, 2026. https://www.ibef.org/government-schemes/self-reliant-india-aatm-nirbhar-bharat-abhiyan.

[x] India Brand Equity Foundation. “India’s Defence Manufacturing Industry Revolutionizing Exports | IBEF.” Accessed March 5, 2026. https://www.ibef.org/industry/defence-manufacturing.

[xi] “Tata Advanced Systems and Airbus Inaugurate C295 Final Assembly Line in Vadodara, India | Airbus.” October 28, 2024. https://www.airbus.com/en/newsroom/press-releases/2024-10-tata-advanced-systems-and-airbus-inaugurate-c295-final-assembly-line-vadodara-india.

[xii] Default. “India's Reliance Signs Ammunition Deal with Diehl.” June 11, 2025. https://www.janes.com/osint-insights/defence-news/weapons/indias-reliance-signs-ammunition-deal-with-diehl.

[xiii] The Times of India. “Thales, Kanpur’s MKU to Jointly Make Night Vision Devices for Armed Forces in UP: MSME Minister.” November 23, 2020. https://timesofindia.indiatimes.com/thales-kanpurs-mku-to-jointly-make-night-vision-devices-for-armed-forces-in-up-msme-minister/articleshow/79371794.cms.

[xiv] George M, Djokic K, Hussain Z, et al. (2025) TRENDS IN INTERNATIONAL ARMS TRANSFERS, 2024. SIPRI Fact Sheet. Available at: https://www.sipri.org/sites/default/files/2025-03/fs_2503_at_2024_0.pdf