India and Europe’s Next Defence Chapter: From Buyers to Industrial Partners

On 27 January 2026, the European Union and India signed their first-ever Security and Defence Partnership during the EU–India Summit in New Delhi. The new agreement commits both sides to deepen cooperation across a wide range of areas – and notably includes collaboration on “defence industry-related matters.”

This marks a shift from seeing the relationship as a series of one-off equipment purchases towards a more integrated industrial partnership. The question now is whether Europe and India can move beyond traditional buyer–seller deals to create a shared security-industrial ecosystem.

From Buyer to Partner

Until recently, India’s defence ties with Europe have largely been about individual purchases – fighter jets from France, submarines from Germany, artillery from other EU states. Under the new Security and Defence Partnership, however, officials speak of partnerships rather than mere exports.

The official framework explicitly calls for joint work on defence industry projects. In fact, when New Delhi’s Defence Acquisition Council approved a proposal for up to 114 Dassault Rafale jets in early 2026, it stressed that the plan would “expand manufacturing capacity in India.” This signals a more collaborative approach, where European firms are invited to co-produce and transfer technology as part of any sale, rather than simply delivering finished hardware.

Why India Matters to Europe

European defence companies see clear benefits in closer ties with India. India offers a large, skilled workforce and well-developed manufacturing clusters that can help drive down costs. As one expert observed, many in Europe view India as a “cost-competitive, politically reliable manufacturing base, especially for dual-use technologies.”

Europe is currently boosting defence spending and seeks efficient ways to meet those budgets. Partnering with India – where manufacturing runs can be larger and cheaper – is an attractive way to scale production without all the overhead of European factories. In short, by tapping into India’s industrial base, European firms can produce more affordably and meet surging demand.

Why Europe Matters to India

For India, the value of working with European industry lies in technology and standards. EU defence equipment is among the most advanced in the world, and many systems meet NATO certification. Cooperation would give Indian firms access to this high-end know-how and open doors to global supply networks. One analyst notes that Europe offers India “high-end technologies and NATO-grade supply chains.”

India is already on the rise as a defence exporter – its overseas sales jumped from under ₹2,000 crore in 2014–15 to over ₹21,000 crore (about €2.3 billion) in 2023–24, a twentyfold increase. The government is aiming for ₹50,000 crore (around €5.6 billion) in defence exports by 2029. Teaming up with European partners could help India reach those targets by providing advanced systems and co-marketing opportunities. In effect, India sees Europe as a gateway to cutting-edge platforms and wider markets, complementing its own ambitions under “Make in India.”

The Supply-Chain Opportunity

At the core of this new strategy is the idea of integrated supply chains. Instead of each side building everything itself, India and Europe would split production tasks to leverage their respective strengths. For example, a future armoured vehicle program might be co-designed in Europe, with India manufacturing engines or electronics, then assembly shared across both continents.

Analysts emphasize this “mutual benefit” approach: co-production through joint R&D and manufacturing, with tightly linked supply chains, should be the goal. Indeed, the official partnership text explicitly calls for “strengthening cooperation on security and defence, including resilience of supply chains.” Both parties see the urgency of this model.

For one thing, they want to reduce critical dependencies. China, for instance, accounts for nearly 40% of India’s electronics imports – a vulnerability both sides are keen to address. By weaving their industries together, Europe and India hope to create more robust, diversified supply chains that serve shared strategic needs.

Bridging the Regulatory Divide

Of course, this kind of integration will not happen overnight. India’s defence industry and Europe’s are regulated in very different ways. Certifications, safety standards, and labour rules vary from country to country, and export-control regimes do not match. For example, EU export licenses for military and dual-use technology tend to be more restrictive than India’s own controls.

Joint projects will have to navigate multiple sets of rules and security clearances. Firms on both sides will need to build trust and find practical workarounds.

In the coming years, establishing compatible regulatory processes will be just as important as technical collaboration, ensuring that components and know-how can flow both ways without getting stuck in red tape.

From Rafales to the Future

We can already see the change in recent initiatives. Take the ongoing Rafale fighter-jet deal: France has reportedly offered that up to 96 of the 114 proposed jets could be assembled in India, with local content ramping from 30% to 60%. That level of technology transfer and local production is a radical shift from earlier arms sales that delivered finished planes.

And it may soon extend beyond conventional hardware. India has publicly indicated interest in joining a European next-generation fighter program (France’s future combat aircraft project), suggesting a willingness to co-develop even cutting-edge systems together. Smaller projects – like sharing production of drones, artillery, or naval sensors – are also on the table. Each one can build trust and expertise, laying the groundwork for larger supply-chain integration.

In short, the EU–India defence partnership is ushering in a more mature era. Neither side is abandoning its core industries, but both now acknowledge the gains from joining forces. Europe gains reliable partners and scale; India gains advanced know-how and market reach. Over time, this could produce a genuine two-way industrial ecosystem – one where a new weapon system is conceived in Europe, built with Indian parts (or vice versa), and serves the security needs of both continents. It will be a complex process, but the roadmap is clear: defence deals are only the beginning. The future lies in networks – of factories, engineers and strategists – woven together across continents.