Dr. S. Samuel C. Rajiv, Research Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), gave a presentation on “India-EU Security and Defence Partnership: Defence Industrial Collaboration and Exports’ at the Monday Morning Meeting held on 27 April 2026. Col. (Dr.) Rajneesh Singh (Retd.), Research Fellow and Coordinator, Defence Economics and Industry Centre, moderated the Session.

Executive Summary 

Defence cooperation was one of the key focus areas of the India-European Union (EU) Security and Defence Partnership (SDP), signed on 27 January 2026. The agreement opens up opportunities for Indian defence firms to participate in relevant EU defence procurement initiatives such as Security Action for Europe (SAFE) and Permanent Structured Cooperation (PESCO). The SDP can be expected to further enhance defence-industrial cooperation and exports between India and the EU, with opportunities in the ammunition sector, defence electronics, and other areas. The challenge for the Indian companies would be to navigate the EU policy framework, including the Buy European preference requirements, and embed themselves in EU supply chains.  

Detailed Report

Dr. Rajiv, in his presentation, highlighted that defence was one of the key focus areas of the India-European Union (EU) Security and Defence Partnership (SDP), which was signed on 27 January 2026, apart from maritime and cyber security, space security, counter terrorism, countering hybrid threats, among others. He noted that India was the ninth country with which the EU has signed an SDP. The EU views SDP’s as non-binding political instruments to enhance cooperation and interoperability on defence industrial collaboration. An India-EU Defence Industry forum was also established along with the signing of the SDP.

The Speaker pointed out that India’s participation in relevant EU initiatives could open up after the signing of the SDP. One such initiative is the Security Action for Europe (SAFE) financial instrument that provides loans to Member States for defence investment and common procurement. The Euros 150 billion SAFE Initiative was part of the Re-ARM Europe Plan, presented to the European Parliament on 4 March 2025 by EU Commission President Ursula von der Leyen. He flagged that ammunition and missiles, artillery systems, among others, were part of the SAFE Priority Defence Products Category I. In contrast, air and missile defence systems, maritime surface and underwater capabilities, artificial intelligence and electronic warfare, among others, were part of the SAFE Priority Defence Products Category II list of items.

Dr. Rajiv noted that, as of 24 April 2026, the National Defence Investment Plans of 18 EU Member States, totalling Euros 129 billion, have been endorsed by the European Commission, while Hungary’s Euros 16.2 billion investment plan is under evaluation. Of the 18 countries, Poland secured the largest SAFE loans of 43.7 billion euros, followed by Romania (16.6 billion euros), France (15 billion euros), Italy (14.9 billion euros), and Belgium (8.3 billion euros). As for possible cooperation with these EU countries, Dr. Rajiv noted that Indian defence companies will have to enter into partnerships with companies in some of these EU nations to manufacture defence products jointly.

An additional arena of cooperation concerns India’s possible participation in the Permanent Structured Cooperation (PESCO) projects, a treaty-based mechanism launched by the EU in 2017. Dr. Rajiv highlighted that at the first-ever India-EU Security and Defence Consultations, held at Brussels on 10 June 2022, cooperation in ‘co-development and co-production of defence equipment, including India’s participation in PESCO’, was discussed. The Speaker noted that 74 PESCO projects related to training, strategic enablers, force multipliers, land systems, cyber, C4ISR, maritime, air systems, and space are currently being pursued. Among the countries that signed the SDP with the EU – Canada, Norway and the United Kingdom are part of the EU Military Mobility project under PESCO.

The Speaker then highlighted that industry associations such as the Society of Indian Defence Manufacturers (SIDM) have flagged opportunities for Indian shipyards, electronics firms, and sensor manufacturers to integrate into EU naval supply chains, as well as co-production and lifecycle support (MRO). The SIDM notes that opportunities for European firms are also there to benefit from cost-effective engineering by partnering with Indian firms. At the same time, Indian firms will have to ensure stringent compliance with EU defence, export control, and security standards.

Dr. Rajiv noted that the SDP with the EU is a result of the EU’s enhanced focus on strengthening partnerships with key strategic partners such as India, even as it builds more robust defence capabilities and increases intra-EU defence procurement. The EU’s defence spending has more than doubled over the past decade, and the EU has ambitious plans to increase it to five per cent of GDP by 2035. EU ammunition companies are not only ramping up production but also entering into JVs with firms in other countries (including the Indian defence industry) to meet rising demand.

Rheinmetall, for instance, has entered into a Joint Venture with Reliance Defence for the supply of explosives and propellants for medium and large calibre ammunition. The company also bagged a defence exports order of Rs. 600 Crore in June 2025 from Rheinmetall. Other companies, such as Bharat Forge, have also secured multiple orders for ammunition shells and will likely enter into production and manufacturing agreements with EU firms in the near future. Defence Public Sector Undertaking, Munitions India Limited has also exported to European nations, including the Czech Republic and Romania, in the recent past.

Dr. Rajiv noted that the SDP is expected to further enhance defence-industrial cooperation and exports between India and the EU, with opportunities in the ammunition sector, defence electronics, and other areas. He, however, noted that the challenge for Indian companies would be to navigate the EU policy framework, including the Buy European preference requirements, and to embed themselves in EU supply chains to utilise opportunities in the priority weapons procurement categories of initiatives such as SAFE.

Q&A Session

 Discussion focused on the possibility of acquisitions, joint ventures, and prospects for technology transfer. The Speaker noted that some Indian defence companies are acquiring EU-based companies or entering into partnerships for manufacturing niche equipment. The Indian defence industry is also receiving export orders from EU countries for equipment, including ammunition. The Speaker noted that in the future, the SDP could open up prospects for further collaboration. In response to a question on the role of France as a key partner within the European Union, Dr Rajiv highlighted that France remains a prominent defence partner for India and could serve as an important avenue for expanding joint ventures and participation in projects led by European Original Equipment Manufacturers.

Questions also related to India’s engagements with Russia and implications for closer defence collaboration with the EU. Col. (Dr.) Rajneesh Singh noted that recent agreements with Russia, including logistical arrangements, have been under discussion for several years. Finally, the discussion touched upon whether the latest developments vis-à-vis the EU reflected a broader strategic alignment or remained largely transactional and demand-based. Dr Rajiv observed that while recent geopolitical developments have provided momentum, India–EU relations are rooted in long-standing strategic engagement, suggesting a combination of demand-driven dynamics and strategic alignment.

The Report has been prepared by Mr. Rahul Wankhede, Research Analyst, Defence Economics and Industry Centre, MP-IDSA.