There Is An Unprecedented Opportunity For India-US Defence Collaboration: ORF America

A US-based think tank dedicated to addressing policy challenges believes there is an unprecedented opportunity for India-US defence co-production, but operationalising more defence industry partnerships between the two countries are contingent on commercial and regulatory factors.

The Observer Research Foundation (America) stated in a report titled Precision Targets: Accelerating the US-India Defence Industrial Partnership, released on Thursday, that there is a requirement for making a strong business case for long-term investments and technology transfers, ensuring predictable demand in India.

"The US-India defence industry partnership is ripe for acceleration due to a variety of factors, including supportive domestic policies and favourable geopolitics, as well as the urgent circumstances that have arisen as a result of the war in Ukraine," said ORF (America) in the report.

"Capitalising on these factors will necessitate developing a strong business case for long-term investments and technology transfers, ensuring predictable demand in India, improving public-private cooperation in both countries, and translating the high-level political agreement into tangible outcomes," the report continued.

ORF (America) stated that recent developments had created new openings for bilateral defence industrial cooperation, citing the US-India initiative on Critical and Emerging Technologies (iCET) launch in early 2023. Many old roadblocks have largely been removed, such as suffocating export controls, insufficient enabling agreements and a lack of political engagement.

On the Indian side, elements of a private-sector-involved industrial policy have begun to take shape, creating more appealing conditions for private investment and supply chain integration. Geopolitical factors are also more favourable, given the increased India-US coordination on the Indo-Pacific and the diminishing relevance of US-Pakistan security cooperation, according to the report.

Meanwhile, wartime attrition, supply chain disruptions and secondary sanctions will pose challenges for Russia's 1,300 defence firms, which account for 20 per cent of global weapons sales, creating a partial vacuum in the global arms market. According to the report, other actors are already attempting to fill some of that void.