From Buyers To Partners: Technology Sharing And Industrial Gains In The Indo–US Defence Pact – OpEd
Moving beyond arms sales, Washington and New Delhi chart a collaborative path blending strategic trust with economic opportunity.
India and the United States are on the cusp of formalizing a landmark ten-year Defence Framework Agreement, expected to be signed in the third quarter of 2025 during the 2+2 ministerial dialogue in Washington DC. This agreement marks a decisive shift in bilateral defence cooperation, not only strengthening strategic alignment in the Indo-Pacific but also delivering substantial economic benefits to firms in both countries. Beyond its immediate commercial potential, the pact lays the groundwork for a deeper technology partnership, embedding co-development, indigenous production, and supply chain integration at its core.
As negotiations enter their final phase, industry stakeholders on both sides are watching closely, aware of the significant economic opportunities embedded in the forthcoming pact. For American defence contractors, the Indian market—already the world’s largest arms importer—represents a high-growth avenue. With India diversifying away from traditional Russian suppliers and seeking to indigenize production, US firms stand to gain not only from direct sales but also from licensing, joint ventures, and long-term support contracts. According to projections by the US India Business Council, the agreement could unlock between $15 and $20 billion in new business for American manufacturers over the next decade. Companies such as Lockheed Martin, Boeing, Raytheon, and General Electric are expected to benefit from contracts ranging from advanced avionics and precision-guided munitions to maintenance, repair, and overhaul services.
On the Indian side, the agreement aligns squarely with the Atmanirbhar Bharat—or Self-Reliant India—initiative, offering local firms a chance to climb the value chain through technology inflows and participation in global supply networks. Leading private-sector players like Tata Advanced Systems, Larsen & Toubro, and Bharat Forge are preparing to collaborate with US partners in areas such as aerospace, electronics, and unmanned systems. The agreement is also expected to catalyze the MRO sector, with India projected to emerge as a regional hub for maintaining US-origin origin platforms across Asia. This, in turn, is poised to generate high-value jobs and strengthen India’s defence industrial base.
The timeline for the signing of the agreement is now largely settled. Officials from both governments have indicated that the formal ceremony is scheduled to coincide with the annual 2+2 Dialogue in Washington later this year. The intervening months are being used to finalize legal language, secure requisite clearances, and iron out the contours of technology transfer provisions. Implementation will begin immediately after signing, with a joint working group established to oversee execution, reporting quarterly on progress and resolving disputes as they arise.
Perhaps the most striking feature of the 2025 Defence Framework is its emphasis on meaningful technology sharing, a perennial demand of Indian negotiators that Washington has long been reluctant to meet. This time, the US appears ready to make significant concessions, spurred by the strategic imperatives of countering Chinese influence and fostering a reliable partner in the Indo-Pacific. The agreement envisages a new generation of joint research and development projects, moving beyond the modest achievements of earlier iterations of the Defence Technology and Trade Initiative.
Central to this agenda is the joint development of advanced jet engine technologies, building on the recently announced licensing of GE’s fighter engine designs to Indian manufacturers. Other areas of cooperation include unmanned aerial systems, particularly high-endurance drones for maritime surveillance, and emerging domains such as directed-energy weapons and cyber-defence platforms. For the first time, specific timelines for prototype development and field trials will be written into the agreement, ensuring accountability and momentum.
Beyond R&D, the pact also promises a transformative shift in how India maintains and upgrades its growing fleet of US-origin equipment. With the Indian Air Force, Navy, and Army now operating a range of American platforms—from P-8I maritime patrol aircraft to Apache helicopters—dependence on US-based service providers has become costly and logistically challenging. The new framework will facilitate the transfer of maintenance and upgrade know-how, allowing India to establish indigenous MRO facilities. This not only reduces downtime and costs but also creates a skilled technical workforce in India’s burgeoning aerospace sector.
Naval cooperation, too, stands to benefit substantially. As both nations deepen their engagement in the Indian Ocean, the US has agreed to integrate India more fully into maritime domain awareness networks, sharing real-time intelligence and sensor technologies to improve detection and response capabilities. Access to advanced anti-submarine warfare technology and undersea surveillance systems is also on the table, enhancing India’s role as a net security provider in the region.
The impending agreement comes at a time of heightened geopolitical uncertainty, underscoring the growing alignment of Indian and American strategic interests. Both nations see the Indo-Pacific as central to their security and economic futures, and both are wary of Chinese assertiveness in the region. By embedding India deeper into the US-led security architecture, Washington aims to bolster regional deterrence while supporting India’s rise as a counterweight to Beijing.
The agreement will unfold in phases over the next decade, with clear milestones. The initial months after signing will see the establishment of the joint implementation task force and the launch of pilot projects in areas such as drone development and engine co-production. Budgetary allocations are expected in India’s 2026–27 defence budget to support these initiatives, while the US Congress will review and adjust export control regulations to facilitate the promised technology transfers. By the end of the decade, jointly developed prototypes are expected to enter testing, while MRO hubs reach full operational capacity. The latter half of the agreement will focus on scaling up production and expanding cooperation into emerging domains like artificial intelligence and hypersonic systems.
However, the path ahead is not without challenges. Political continuity and bipartisan support in both capitals are essential for sustained implementation. US concerns over technology leakage and intellectual property protection remain, while India must overcome bureaucratic inertia and streamline procurement processes to absorb and deploy new capabilities effectively. Both sides will need to display flexibility and a shared commitment to problem-solving if the agreement is to realize its full potential.
The 2025 Indo-US Defence Framework Agreement represents more than a transactional arms arrangement. It is a strategic wager by both nations on each other’s reliability and centrality to a stable Indo-Pacific order. By embedding technology sharing, co-development, and supply chain integration at its core, the pact aims to move beyond traditional buyer-seller dynamics and create a genuinely collaborative partnership. The economic dividends for firms in both countries, coupled with the strategic benefits of a more capable and self-reliant Indian military, could make this agreement a template for equitable defence cooperation in the twenty-first century. The coming decade will reveal whether India and the United States can rise to the challenge of translating this ambitious vision into enduring reality.
