Article by Dr Sudhanshu Kumar
In 1991, India’s software exports were worth roughly half a billion dollars. The country had no particular reason to believe that number would grow by 500 times in three decades. It did, and the resulting IT services industry reshaped the global technology supply chain in ways that American firms, policymakers, and military planners are still navigating today. The parallel that deserves Washington’s attention right now is not in software. It is in defence.
India’s defence exports crossed Rs 38,424 crore in FY26, approximately $4.6 billion, up 63 per cent in a single year and more than 5,500 per cent over the past twelve years. Indian-made Akash air defence systems are operational in Armenia. Pinaka multi-barrel rocket launchers are headed there too, and France, a NATO ally, is actively evaluating Pinaka for its own munitions pipeline. BrahMos supersonic cruise missiles have buyers in the Philippines, Indonesia, and Vietnam, three countries where the United States has direct security interests. Operation Sindoor in May 2026 gave Indian weapons their first high-intensity combat proof, and every defence procurement office from Riyadh to Hanoi registered what that proof means for a country that was a net defence importer as recently as 2014.
This is not a rounding error in the global arms market. It is a structural transformation in the making, and Washington has not yet developed a coherent policy response to it.
The case for welcoming India’s defence rise is straightforward. The United States has spent twenty years trying to build a credible counterweight to Chinese military influence in the Indo-Pacific and a reliable alternative to Russian arms dependency across the developing world. India, by accident and by design, is delivering exactly that. When Vietnam buys BrahMos instead of a Russian system, or when Armenia builds an air defence layer with Indian hardware rather than waiting on Moscow’s supply chain, the net effect aligns with American strategic interests without requiring a dollar of American foreign military financing or a single signature from Congress. India is doing what the US has been asking middle-tier partners to do for decades: carry more of the burden.
The complication is that India is also competing directly against American platforms. Akash at $720 million per deployment competes with the Patriot system at above $1 billion. Pinaka competes with HIMARS in markets where the US has historically dominated. India is not pricing these systems to make a profit on R&D investment. It is pricing them to win contracts, subsidising exports with decades of state-funded defence research in ways that make American platforms look expensive to budget-constrained buyers in Southeast Asia, the Middle East, and Africa. The same pricing logic that let Indian IT firms underbid Western competitors in the 1990s is now operating in the defence market, and the implications are more complex than a software outsourcing contract.
The US-India Initiative on Critical and Emerging Technology, launched with considerable fanfare in 2023, was supposed to address exactly this kind of structural convergence. Three years later, iCET remains primarily a technology showcase rather than a defence-industrial framework. There are no binding production-sharing agreements. There is no joint supply chain protocol for critical components. There is no mechanism by which an Indian-manufactured subsystem can be formally integrated into a US platform without navigating the full complexity of export control law, even as both countries publicly describe each other as technology partners.
That gap matters now because the window to shape India’s emerging defence industry, rather than simply react to it, is closing. India’s defence-industrial ecosystem is making its formative choices: which technology standards to adopt, which countries to build deep logistics relationships with, which export markets to prioritise. The choices made in the next three to five years will determine whether Indian systems are interoperable with American platforms or parallel to them in ways that create friction at exactly the moments when coordination matters most.
Three specific actions would begin to close that gap.
The Defence Security Cooperation Agency should fast-track India to an equivalent status in defence technology sharing to what Australia, the United Kingdom, and Japan currently hold under AUKUS-adjacent frameworks. The legal architecture for this already exists. What is missing is the political will to use it, and the bureaucratic momentum to move faster than India’s own procurement calendar.
The Pentagon’s Office of Industrial Policy should open a dedicated US-India defence supply chain coordination channel, with a specific mandate to identify components where Indian manufacturing could substitute for Chinese supply chains currently embedded in American platforms. India has the engineering capacity. The question is whether the US is willing to formally qualify Indian suppliers rather than treating every Indian firm as a case-by-case procurement decision.
The State Department’s Bureau of Political-Military Affairs should develop a proactive Indian defence export policy, not reactive case-by-case approvals, that distinguishes between Indian sales that advance American strategic interests, Southeast Asian partners arming against Chinese pressure, and sales that complicate them, systems going to countries where the US has competing interests or where end-use monitoring cannot be guaranteed. India will not subordinate its export decisions to American preferences. But Washington can develop a framework that makes explicit where interests align and where they do not, rather than discovering that misalignment after a contract is signed.
India’s IT services rise benefited American companies enormously and created dependencies that American policymakers spent two decades trying to understand and manage. The defence-tech rise is smaller now but growing faster, and it is happening in a domain where supply chain dependencies, technology standards, and export patterns carry strategic consequences that software outsourcing never did.
The opportunity is real. So is the risk of arriving late to a conversation that India has already started without Washington in the room.
