India’s Defence and Space Ambitions Offer Austria Opportunities, But Will Regulations Stand in the Way?
Within three weeks this autumn, Vienna hosted two events that highlighted India's growing interest in Austrian industry.
On 23rd September 2026, the Embassy of India invited Indian and Austrian defence companies to the Ritz-Carlton for the India Austria Security and Defence Industry Conference.
On 13 October, around a dozen Indian space companies visited Space Hub Austria near Vienna International Airport, where two MoUs were signed that morning.
India is actively seeking partners in Europe, with Austria emerging as a country of interest. However, it remains to be seen how effectively Austrian companies will be able to respond to these opportunities.
India is changing the way it equips its armed forces. According to SIPRI, it was still the world’s second-largest arms importer between 2021 and 2025, with 8.2% of global imports. At the same time, Russia’s share of India’s arms imports fell from 70% in 2011–15 to 40%, and domestic defence production reached a record ₹1.78 lakh crore (around €16.8 billion) in 2025–26.
Foreign suppliers remain welcome, but New Delhi increasingly expects them to produce together with Indian partners.
India has set similar goals for its space sector. The national space regulator IN-SPACe aims to grow the country’s space economy from around USD 8 billion to USD 44 billion by 2033. Reaching that target will require precision components, testing capacity and specialist know-how, areas in which European small and medium-sized companies have a lot to offer.
Austria does not build fighter jets or submarines. Many Austrian firms, however, supply parts and systems to those who do, often several tiers down the value chain. Their fields range from vehicles and components to aviation systems, protective equipment, and information and cyber technology. Most of these companies make dual-use goods for civilian and military customers alike. An Indian partner gives them access to a market of more than 1.4 billion people, while India gains technology and quality standards that would take years to develop on its own.
The space seminar offered two concrete examples. The Survey of India and the Austrian Federal Office of Metrology and Surveying agreed to cooperate on geospatial data and climate monitoring. At the company level, Roter Precision Instruments and Drone Rescue signed an agreement of their own.
But what is the bigger picture?
On 27th January 2026, the EU and India concluded their free trade agreement and, on the same day, signed a Security and Defence Partnership that explicitly covers defence industry cooperation.
In April the same year, and in light of the upcoming trade agreement, Federal Chancellor Christian Stocker visited New Delhi with around 60 business leaders and described the new partnership as essential. That said, a free trade agreement primarily reduces tariffs on certain goods. It does not override national export control regimes governing military and dual-use items, which remain within the competence of the Austrian authorities in Vienna.
At the September conference, this was hard to overlook. Industry representatives report that licences for exports outside the EU, including to India, are regularly refused by the competent Ministry. A strategic partner of the European Union should be able to expect a clear, efficient and predictable licensing practice.
A second obstacle is Section 320 of the Austrian Criminal Code. It prohibits support for parties to an armed conflict, even when such a conflict is merely “imminent”, without defining when that is the case. Violations carry prison sentences of up to five years.
In a press release dated 26th October 2026, the Federation of Austrian Industries (IV) pointed out that the uncertainty does not stop at defence companies. Suppliers of electronics, software and materials, whose products may later end up in military systems abroad, are affected as well, and so are the banks that finance them.
“Without legal certainty there is no financing, and without financing there is no investment,” said Peter Koren, Deputy Secretary General of the IV.
A more precise wording is already under consideration. The Federal Ministry of Economy, Energy and Tourism has prepared a draft, but it has been pending at the Federal Ministry of Justice for weeks, with the coalition yet to reach an agreement. The Ministry of Justice sees no urgent need for changes, arguing that the low number of criminal proceedings suggests the provision does not significantly affect industry. That argument overlooks how companies decide: they assess the legal risk before signing a contract, and if it is unclear, they often do not sign at all.
An option worth considering would be a privileged group of countries, such as the EU’s trade agreement and security partners, to which Section 320 would not apply. Companies would gain a clear point of reference, while export control would still assess every single delivery.
India is expanding its defence and space industries quickly, and France, Israel and the United States are already well established in the market. Austrian suppliers have the technology that Indian manufacturers are looking for, and the EU has laid the political groundwork with the trade agreement and the security partnership.
What is still missing is clarity at home: a predictable export control practice and a reform of Section 320 to prevent unnecessary constraints on domestic industry.
This article is written by:-
Mr. Clemens Egger
Peak Technology
Vienna, Austria.
He attended the first bilateral Austria-India Defence Industry Conference in Vienna
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