After months of negotiations, India and the European Union reached a political inflection point with the signing of a free trade agreement on January 27, 2026. While the trade deal was publicly framed as the “mother of all deals,” the simultaneous signing of a Security and Defence Partnership (SDP) marked a quieter but strategically notable development. While earlier joint statements and consultations remained largely declaratory, the SDP contains genuine institutional scope and ambition, establishing a comprehensive framework that structures cooperation across traditional and non-traditional domains anchored by dialogue mechanisms that ensure continuity.
In specific, the pact institutionalizes annual ministerial and director-level dialogues on security and defense and establishes thematic working streams covering maritime security, counterterrorism, hybrid threats, critical infrastructure, and artificial intelligence (AI) and emerging technologies. It also launches negotiations for a Security of Information Agreement (SoIA), a prerequisite for any sustained exchange of classified material and deeper defense industrial collaboration. Crucially, the text speaks of exploring India’s participation in “relevant EU defense initiatives,” acknowledging potential involvement in European defense programs but leaving actual participation subject to future approval.
Defense Industrial Collaboration
At its core, the defense industrial logic underpinning the India-EU SDP resembles a reciprocal bargain. For Europe, the appeal lies in accessing scale, speed, and cost efficiency in a period of acute defense industrial stress; for India, the value lies in access to technology, co-development, and deeper integration into advanced defense supply chains. The SDP does not formalize this bargain, but it does create the institutional and regulatory scaffolding through which it may be actualized.
EU security and defense partnerships are generally composed of three functional pillars: participation in EU civilian and military missions and operations, agreements for the exchange of classified information, and participation in Permanent Structured Cooperation (PESCO) projects. India’s interest, however, is likely to be concentrated less on expeditionary missions and more on the latter two pillars. From New Delhi’s perspective, both the conclusion of an SoIA and access to relevant defense initiatives carry implications for co-development and co-production of defense systems with European partners, aligning closely with India’s long-standing objective to strengthen its domestic defense industrial base. Industry voices see the new Defence Industry Forum created under the agreement as a potential turning point in such efforts, transforming Indian firms from “build-to-print” players into program-level stakeholders responsible for design, integration, and long-term sustainment.
From the European point of view, deeper defense industrial collaboration with India squares neatly with the EU’s wider rearmament drive. Under its ReArm initiative, the EU plans to mobilize close to EUR €800 billion (USD $945 billion) in defense spending by 2030, with an explicit emphasis on rapidly expanding production, diversifying suppliers, and reducing structural dependencies within European supply chains; in February 2024, senior EU official Josep Borrell publicly urged member states to procure from non-EU suppliers if it proved “better, cheaper, and quicker.”
Given India’s growing stronghold in ammunition, small unmanned aerial systems, and loitering munitions, Europe can source such items from India at substantially lower costs. Importantly, Indian 155mm shells are significantly cheaper, estimated at less than one-third the cost of equivalent shells from U.S. or Western European contractors. These advantages have already contributed to a small boom in Indian defense exports to EU countries: between February 2022 and July 2024, India exported USD $135.25 million worth of munitions, including completed artillery shells, to Italy, the Czech Republic, Spain, and Slovenia, marking a significant increase from the USD $2.8 million in exports recorded in the two years prior to the start of the Russia-Ukraine war.
Meanwhile, European capitals have long pressed New Delhi to reduce its dependence on Russia, which in the last decade was at 76 percent of its inventory, in favor of other Western countries. That pressure has been matched by Indian pragmatism: the armed forces’ procurement choices in the past decade reflect not only geopolitics but hard lessons in performance, sustainment, and timely delivery. Recent operational experience has increased confidence in certain European platforms. Most visibly, the role of the Rafale in high-intensity deployments like Operation Sindoor, where the aircraft was primarily configured for precision air-to-ground missions carrying SCALP cruise missiles and HAMMER munitions, strengthened institutional trust in French systems supplied by Dassault Aviation—as evidenced by recent approvals to purchase 114 more Rafale systems. Separately, Indian planners have shown sustained interest in advanced conventional submarine designs incorporating Air-Independent Propulsion (AIP), a segment in which European shipyards, particularly those associated with German manufacturer TKMS, are widely regarded as technologically mature and operationally proven.
Beyond platform performance, two supply-side pressures have pushed New Delhi closer to Europe. First, traditional suppliers such as Israel and Russia have been consumed by their own operational tempos and domestic priorities, constraining their ability to meet India’s expanding procurement and sustainment timelines. Second, a growing trust deficit in the U.S.-India relationship has produced a reappraisal in New Delhi about the risks of over-reliance on any single external supplier. Together, these factors help explain why Europe’s offer of technology partnerships, co-production, and alternative supply lines has gained traction.
At the same time, this industrial opening is circumscribed by structural tension between European rearmament logic and India’s Aatmanirbhar Bharat agenda as regards regulatory architecture. The SDP renders India newly eligible to participate in the EU’s Security Action for Europe (SAFE) regulation, a temporary loan-based instrument introduced in May 2025 to mobilize up to EUR €150 billion (USD $178 billion) to accelerate defense production, procurement, and industrial capacity across the bloc. While India would be part of a limited cohort of external partners able to tap into this financing ecosystem, its Defence Acquisition Procedure (DAP 2020) prioritizes indigenization: platforms categorized under “Buy Indian–IDDM” typically require at least 50 percent indigenous content to qualify as genuinely domestically designed, developed, and manufactured. SAFE, by contrast, is explicitly designed to anchor production within Europe. To access its loan facility, projects must ensure that at least 65 percent of component costs originate within the EU or the European Economic Area, effectively capping non-EU participation at 35 percent. A single platform cannot efficiently bridge both India’s indigenization thresholds and SAFE’s European-content requirements. While it is possible for India to thread this needle, doing so would raise the cost of the system and negate the economic benefits of co-development.
Strategic Context
Beyond procurement diversification and industrial logic, the India-EU SDP must also be read as part of Europe’s evolving attempt to assert strategic relevance in a changing international order. Over the past decade, the European Union has struggled to harmonize its economic force with its limited ability to shape security outcomes in its own neighborhood. There is a growing recognition in Brussels that economic interdependence alone is insufficient to protect European interests in an increasingly contested global environment.
In this light, EU engagement with middle powers points to its ambition of functioning as a credible geopolitical actor. The SDP signals a shift from passive diplomacy to strategic industrial statecraft, enabling Europe to assert its notion of strategic autonomy in the Indo-Pacific by embedding itself in the region’s defense supply chains, maritime architecture, and technology standards. For India, this model is attractive precisely because it avoids the hierarchical and obligation-laden structures that define traditional security alliances.
This alignment of preferences explains why the SDP emphasizes frameworks and dialogues. India has historically resisted defense arrangements that could constrain strategic autonomy or create expectations of interoperability in third-party conflicts. The EU, for its part, remains institutionally unsuited for expeditionary military roles outside Europe, given the primacy of member states in defense decisionmaking and persistent divergences in threat perception—particularly with respect to China. The partnership thus reflects a convergence around coordination without alignment, a model that allows both sides to hedge against uncertainty while preserving policy flexibility.
However, this distance imposes inevitable limits. Without the deep interoperability and shared threat perceptions often woven into a formal alliance, operational coordination will likely remain confined to low-intensity missions like anti-piracy or humanitarian relief, stopping short of high-end integration. Similarly, industrial collaboration may face ceilings on sensitive technology transfers, as neither side can offer the binding security guarantees that typically underpin the sharing of strategic intellectual property.
Maritime cooperation illustrates this logic clearly, with collaboration framed around maritime domain awareness, information fusion, and episodic coordination in areas such as the Indian Ocean and the Red Sea. This approach allows Europe to contribute niche capabilities covering satellites, analytic platforms, and regulatory frameworks while tacitly recognizing India’s role as the primary regional security provider. It also allows India to benefit from European inputs without diluting its control over regional security outcomes.
The timing of the India–EU SDP is therefore as significant as its content. The war in Ukraine is frequently cited as the principal driver behind Europe’s renewed interest in defense partnerships. While the conflict has undoubtedly reshaped European defense debates, it does not fully explain the acceleration of security engagement with India over the past year. A more proximate catalyst appears to lie in the growing strain within the transatlantic relationship. The advent of a more openly transactional U.S. posture, epitomized by renewed pressure on allies to raise defense spending to 5 percent of GDP and a broader “America First” framing, has reintroduced uncertainty into Europe’s long-standing security assumptions.
This convergence raises a broader question: is the European Union genuinely in the process of becoming a strategic force, or is it being nudged temporarily into acting like one? There is evidence of structural intent: the EU Indo-Pacific Strategy, defense readiness initiatives, and security partnerships with Asian countries like Japan, South Korea, and now India point to an aspiration to play a more consequential role in shaping security outcomes beyond Europe.
At the same time, the political foundations of this push remain uneven. Much of the current momentum appears driven less by a settled consensus within Europe about long-term power projection and more by unease over the reliability of traditional security arrangements. Should transatlantic relations stabilize, the political appetite to sustain costly strategic ambitions outside Europe’s immediate neighborhood could weaken.
Seen in this light, the India-EU SDP is best understood as a product of multialignment in a multipolar world, reflecting a moment in which diversifying partnerships makes sense to both sides, even as neither is yet prepared to anchor that choice in binding commitments or deep operational integration.
Views expressed are the author’s own and do not necessarily reflect the positions of South Asian Voices, the Stimson Center, or our supporters.
Also Read: The India-EU Free Trade Agreement: Contours, Complications, and Regional Spillovers
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Image 1: European External Action Service
Image 2: Dylan Agbagni via Wikimedia Commons
