India’s decision to reissue an open tender for procuring 114 multirole fighter aircraft marks a significant shift in its defence procurement strategy. As the world’s largest arms importer, India faces pressing challenges to streamline its defence acquisition processes. Enhancing transparency, boosting indigenisation, and ensuring timely access to cutting-edge platforms for its armed forces have become paramount.
The rapidly evolving geopolitical landscape, especially in the Indo-Pacific region, has encouraged Indian policymakers to reassess how best to modernise their military capabilities. Longstanding tensions with neighbours Pakistan and China further underscore the need for a strong defence posture, prompting India to accelerate the acquisition of advanced systems to secure its borders.
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Shifting from dependence on Russia
Historically, India has relied heavily on Russia for its defence needs, sourcing most of its equipment from Russian suppliers since the Cold War era. However, in recent years, this dependence has declined significantly. Russia’s share of Indian arms imports dropped from 76% in 2009-13 to 36% in 2019-23. This change aligns with India’s strategic aim to diversify its defence sources by engaging with Western suppliers like France and the United States, which offer access to advanced technology and platforms.
Today, India remains the largest importer for both Russian and French defence platforms, representing 36% and 29% of their respective exports. This rebalancing highlights India’s intent to reduce dependency on a single nation while expanding its global defence partnerships.
The Make in India push
India’s growing emphasis on self-reliance, underpinned by the Make in India initiative, has further fuelled its procurement shift. Moving away from Russian equipment and favouring Western suppliers represents a calculated effort to modernise its defence capabilities while fostering indigenous manufacturing.
This strategy not only enhances India’s readiness but also supports the domestic defence industry through technology transfers and local production. By strengthening international collaborations, India aims to build a resilient, autonomous military force capable of addressing regional threats and ensuring national security.
Learning from recent procurement negotiations
India’s procurement negotiations with key suppliers like the U.S., France, Israel, and Russia reveal diverse approaches tailored to meet its defence requirements.
France: The 2019 Rafale deal exemplifies collaborative negotiation, as France’s significant technology transfer aligned with India’s Make in India goals. Agreements like the Safran jet engine deal underline France’s integrative strategy, fostering local manufacturing and trust through technology transfers.
United States: Under the Trump administration, the US leveraged high-tech systems like the Apache and Chinook helicopters using bundling tactics. The Biden administration’s distributive approach focused on India’s urgent defence needs, exemplified by deals for F404 engines and MQ-9 Reaper drones. However, delays in supplying critical systems like the F404 engine have prompted India to reconsider its dependence on the US.
Countries with highest military spending
Israel: Known for competitive negotiation, Israel’s selective transparency in drone technology ensures continued reliance on Israeli upgrades. Recent collaborations, like co-manufacturing the Hermes 900 drone, showcase India’s use of integrative bargaining to enhance autonomy.
Russia: Despite declining dependency, Russia remains a crucial partner, employing urgency-based tactics in deals like the S-400 missile defence system. Russia’s swift responses to security threats reinforce its reputation as a flexible and reliable supplier.
Defence procurement through open tenders
India’s evolving procurement strategy emphasises open tenders and multi-vendor participation under the Make in India initiative. This approach fosters competition, securing advantageous terms while reducing dependency on single-source arrangements. Recent supply delays, such as the US F404 engines, underscore the need for this shift.
By adopting an open-tender approach for critical platforms, including submarines, helicopters, and multirole fighter jets, India ensures transparency and accountability. This strategy also mitigates challenges associated with government-to-government deals, such as those seen in the Rafale acquisition, which faced extensive public scrutiny.
Building a resilient defence ecosystem
Global conflicts have highlighted the importance of a self-sustaining defence industry. Recognising this, India seeks partnerships that prioritise local manufacturing, complete technology transfers, and robust maintenance setups. Such collaborations not only align with India’s self-reliance goals but also bolster the sustainability of its defence infrastructure.
Diversification across nations and vendors enhances India’s defence supply chain resilience, mitigating risks tied to single-source dependencies and potential diplomatic or legal challenges. A dynamic network of suppliers, combined with domestic manufacturing, reinforces India’s long-term security by ensuring access to critical assets.
India’s focus on joint ventures and co-production underscores its commitment to advanced technology acquisition and domestic industry growth. Initiatives like the US-India Defence Technology and Trade Initiative (DTTI) foster co-development of platforms, ensuring alignment with India’s self-reliance objectives.
Through integrative approaches, India positions itself as a collaborative partner while safeguarding its strategic interests. By integrating advanced technologies, local manufacturing, and multi-vendor sourcing, India addresses immediate security needs while building robust local capabilities.
India’s proposed open-tender procurement strategy reflects a balanced approach to modernising its military capabilities. By fostering competition, enhancing transparency, and emphasising self-reliance, India aims to strengthen its defence ecosystem. This strategy aligns with national interests, bolstering resilience and autonomy while nurturing the growth of its domestic industry.
Through these measures, India establishes a sustainable framework for defence procurement, ensuring its armed forces remain equipped to address emerging threats in an increasingly complex global environment.
(Dr Ram Singh is Professor and Head, Indian Institute of Foreign Trade, New Delhi. Siya Singh is project intern, IIFT New Delhi.)