- EU leaders visited New Delhi on 27 January for talks with Indian Government ministers to cultivate a closer working partnership in the defence and security space
- But both sides are pursuing a policy of strategic autonomy, eager to expand their defence industrial competitiveness, overwhelmed by a flood of US and Russian defence systems
- Yet there may be middle ground as the EU seek access to materials and components while India taps into Europe’s defence market
A new Security and Defence Partnership (SDP) was signed by EU High Representative Kaja Kallas and India’s External Affairs Minister Subrahmanyam Jaishankar in New Delhi on the margins of a 27 January summit that also comprised the signing of a separate Free Trade Agreement.
The SDP forms building blocks for a closer working relationship between the two polities amid a fractured geopolitical landscape in which the US and Chinese orbits offer little room for manoeuvre.
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The US President’s threat of tariffs over Greenland and China’s aggressive posture in the Indo-Pacific have forced aspiring powers to find their own way; a sentiment that featured in the Canadian Prime Minister Mark Carney’s speech in Davos, extolled for its astute view of the world order.
Primary areas of EU-India cooperation include the security of the Indian Ocean region and steps toward integrating defence industrial supply chains. For such a wide ranging agreement, there are three key implications to consider as both sides seek to increase their strategic autonomy.
SAFE regulation
One implication of the SDP is that it now allows India to participate in the EU’s Security Action For Europe (SAFE) regulation, among other financial instruments.
The SAFE regulation is a temporary loan scheme that the EU introduced in May 2025 to provide up to €150bn in loans to member states with the aim of helping to rapidly accelerate defence production, procurements and industrial capacity.
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By GlobalDataAny country that has struck an SDP with the bloc is eligible to participate in the financial mechanism. However, third party nations must comply with a requirement that no more than 35% of component costs for joint defence projects come from outside the EU.
This now puts India on par with the UK, for example, whose government lately failed to secure differential treatment in 2025. It is said that the UK tried to increase the cap but doing so came with a €6bn fee, which London determined was not value for money.
Diverse supply chain
Defence Minister Rajnath Singh is said to have coaxed European diplomats during the talks when he suggested India’s defence industry can play a “meaningful role” in the EU’s wider ReArm initiative, which mobilises €800bn in defence by 2030, especially since the bloc wants to rapidly diversify suppliers, de-risk dependencies and tap into India’s growing manufacturing base.
“While the EU initiative emphasises developing advanced weapons systems within Europe using domestic industrial capacity, a notable gap remains at the lower end of the spectrum,” observed GlobalData defence analyst Abhijit Apsingikar, referring to ammunition, uncrewed aerial systems, and loitering munitions, which he said could be sourced from Indian suppliers at a “substantially lower cost”.
Already, Indian aerospace firms such as Tata Advanced Systems already operate a local assembly line for the Airbus C-295 light transport aircraft in India. EU aerospace and defence companies could deepen their partnerships to source aerostructures and other fuselage components from Tata.
Simultaneously, however, European policymakers are likely to approach integration gradually. This stems from concern over the lack of regulatory alignment, technology protection and assurance when it comes to insulating European supply chains.
Technology transfers
Currently, the Indian Armed Forces have come to trust French defence suppliers, compelled by the performance of Scorpene-class submarines and the predictable timelines and readiness of Rafale fighter jets.
But other European systems remain competitive in areas such as advanced naval propulsion, aerospace components, electronic warfare suites, and precision munitions.
However, India’s procurement strategy is now firmly anchored in domestic defence-industrial development, marked by the government’s “Atmanirbhar Bharat” (Self-Reliant India) campaign.
“European sales [are] most viable when structured around joint production or co-development rather than direct imports,” affirmed Walter Ladwig III, an associate fellow at the Royal United Services Institute in their Indo-Pacific programme.
“The appetite is there,” he continued, “but increasingly conditioned on whether cooperation strengthens India’s long-term industrial autonomy rather than simply filling capability gaps”.
