Can the India-US Reciprocal Defence Negotiations Boost New Delhi’s Strategic Autonomy?

New Delhi: Away from the headlines surrounding aero engines, fighter aircraft, advanced unmanned aerial vehicles, missile systems and sundry other materiel, India and the US are currently engaged in what could prove to be one of the most consequential defence-industrial agreements ever contemplated between the two sides. 

Little publicised and scarcely debated outside official circles, the proposed Reciprocal Defence Procurement Agreement (RDPA) seeks to integrate the defence industrial bases of both countries by lowering procurement barriers and granting companies on either side greater access to each other's military markets and acquisition programmes. The agreement, which is also believed to feature in the ongoing India-US trade negotiations, would represent a significant departure from Washington's longstanding defence procurement policy towards India.

But beneath the RDPA's promise of closer defence cooperation lies a fundamental asymmetry, for despite its description as a "reciprocal" arrangement, the competitive balance, once concluded, would be anything but equal. It would simply pit India's still-maturing defence sector against the world's largest and most technologically advanced military-industrial base, where American conglomerates enjoy an overwhelming advantage in capital, know-how, artificial intelligence (AI), research and development, intellectual property, manufacturing scale and global market reach.

The central issue, therefore, is not whether the RDPA will create opportunities for Indian companies, but whether they can ever compete on equal terms with their American counterparts, both in the US and at home.

In the US market, they would be up against established manufacturers with decades of technological leadership, vastly greater financial resources and privileged access to the Pentagon. And, locally, they could increasingly find themselves competing against these very same companies for major defence contracts, leaving the competitive odds heavily stacked against them on both fronts, raising obvious doubts over whether "reciprocity" would ever translate into genuine equality of opportunity.

Negotiations over the RDPA formally began in June 2023 following US defence secretary Lloyd Austin's visit to New Delhi and were subsequently endorsed during Prime Minister Narendra Modi's State visit to Washington later that month, as part of a broader roadmap for bilateral defence-industrial cooperation. In October 2023, the Pentagon initiated the formal negotiating process by inviting public and industry comments on granting India "qualifying country" status under US procurement regulations, even as questions remained over the extent of reciprocal market access on India's side.

Also read: How India's Strategic Tilt Towards the US Faces an Indifferent Washington

By contrast, no comparable public consultation with India's defence industry is known to have taken place, despite it being the sector likely to be most directly affected by the agreement. Several industry executives privately said they were unaware of any structured consultations with the Ministry of Defence on the RDPA, raising questions over whether domestic concerns had been adequately factored into India's negotiating position.

Thereafter, technical discussions on RDPA gathered pace through 2024, culminating in the signing of the bilateral Security of Supply Arrangement (SOSA) in August that year, widely regarded as the first step towards a broader defence-industrial partnership. While SOSA commits both governments to prioritising each other's defence requirements during periods of supply-chain disruption or national emergency, it leaves procurement rules and market access unchanged.

The proposed RDPA, however, is intended to take that process much further by opening up each country's defence procurement system to the other's industry. Alongside, RDPA negotiations are understood to have continued intermittently alongside the broader India-US trade and technology talks over the past 18-20 months, with both sides seeking agreement on issues such as reciprocal market access, the extent of technology transfer, procurement rules and safeguards for India's domestic defence industry.

At its core, the RDPA is not a procurement contract or a technology-transfer agreement, but an institutional framework intended to harmonise cumbersome and bureaucratic defence procurement rules and procedures in both countries. One of its more significant consequences would eventually be India's designation as a "qualifying country" under the US Defence Federal Acquisition Regulation Supplement (DFARS), placing it in an exclusive category of Washington’s trusted defence partners. This status, once approved, would exempt eligible Indian defence firms from several procurement restrictions and compliance requirements that currently restrict direct access to Pentagon contracts.

Washington concluded its first RDPA with Canada in 1956, but from the 1970s onwards progressively extended similar arrangements to some 27 other trusted "qualifying countries", the overwhelming majority of them North Atlantic Treaty Organisation (NATO) allies or long-standing security partners. The latter included Australia, Japan, South Korea, Israel and Switzerland.

Against this backdrop, India's conceivable inclusion would make it only the third Asian country, after Japan and South Korea to secure such status and, more significantly, one of the very few major non-treaty partners to be integrated so closely into the US defence procurement framework.

Earlier, when the initiative was mooted, it reflected Washington's determination to draw India into its long-term defence-industrial architecture as a strategic counterweight to China and a key pillar of its Indo-Pacific strategy. In recent weeks, however, security analysts in Delhi said that despite the Trump administration's decision to revert to the pre-2018 "Pacific" designation for the region in place of the "Indo-Pacific" construct, there was no indication that negotiations over the proposed RDPA had been abandoned. The Pentagon, they noted, had described the reversion to the "Pacific" designation as largely symbolic, insisting it did not signal any change in Washington's commitment to its regional security partnerships.

Meanwhile, a cross-section of Indian security officials and defence industry executives privately question whether the RDPA truly embodies mutuality or is instead a mechanism for ‘subsuming’ India's defence sector within America's vast military-industrial ecosystem, leaving domestic companies increasingly and hopelessly dependent on their far larger US counterparts.

For Indian companies, the agreement promises potential access to the Pentagon – the world's largest defence buyer – but also confronts them with an uncomfortable reality: they would be competing against corporations like Lockheed Martin, Northrop Grumman, Boeing and General Dynamics, amongst others, whose financial resources, technological depth, research and development, industrial capacity and worldwide reach dwarf those of several of India's largest defence manufacturers combined.

Moreover, this competitive imbalance would not be confined to the US as these same companies would also be free to compete far more aggressively for defence contracts in India, forcing domestic firms to confront the world's biggest military contractors both abroad and in their own backyard.

Consequently, the RDPA could expose Indian companies to competition for which many, if not most, are likely to remain ill-prepared for the foreseeable future. While a handful of state-owned and larger private-sector defence manufacturers may be positioned to secure new opportunities, many smaller firms could find themselves permanently relegated to the lower end of global supply chains as subcontractors and component suppliers, while control over critical technologies, system integration and intellectual property remains concentrated in American hands. 

These concerns also help explain why RDPA negotiations between Delhi and Washington have progressed cautiously. Indian negotiators are understood to be seeking safeguards on reciprocal market access, technology transfer and protection for domestic manufacturers from US companies competing for Indian defence contracts before committing to an agreement of such far-reaching consequence. The negotiations are also reportedly proceeding in parallel with broader India-US trade talks, which remain unresolved for now.

Ultimately, whether the RDPA becomes a catalyst for India's emergence as a globally competitive defence-industrial power – or leaves much of its defence sector competing on permanently unequal terms – will depend entirely on the terms Delhi succeeds in negotiating. The issue is not simply one of market access, but of preserving India's ability to develop, control and export advanced defence technologies on its own terms, rather than becoming structurally dependent on far larger American corporations.

In the end, the RDPA will be judged not by how “reciprocal” it appears on paper, but – amid the quiet, largely opaque negotiations that have shaped it from the outset – by whether it strengthens India’s strategic autonomy and defence industrial base or quietly undermines them.

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