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An early conclusion of the Reciprocal Defence Procurement (RDP) agreement between India and the United States is crucial to enabling Indian defence companies to access the vast US defence market and integrate into its supply chains, according to a report released by the Society of Indian Defence Manufacturers (SIDM). Titled “Mapping Opportunities in India’s Defence Exports,” the report underscores that the RDP would pave the way for Indian firms to participate in broader NATO procurements, significantly enhancing India’s footprint in the global defence ecosystem. The United States, with a defence budget exceeding $850 billion, is the world’s largest defence market. However, the US Defence Federal Acquisition Regulation Supplement (DFARS) currently restricts procurement of defence items — including materials and components — to US companies or firms from “Qualifying Countries.” Granting RDP status to India would remove this barrier, opening the door for Indian suppliers. “Indian pharmaceutical companies supply 47 per cent of all generic prescriptions in the US, substantially reducing healthcare costs there. Indian defence firms could do the same for aerospace and defence components — making US defence articles more price-competitive while becoming integral to US supply chains,” noted the report. The report, jointly prepared by SIDM -- the apex body of the Indian defence industry -- and The Asia Group (TAG), was released by Defence Minister Rajnath Singh on Monday. A major highlight of the report is India’s Defence Line of Credit (DLoC) programme — a strategic tool that promotes defence cooperation through concessional financing, enabling friendly nations to procure Indian-made defence equipment. “The DLoC strengthens bilateral ties, promotes indigenous capabilities, and expands India’s global footprint,” said Rajinder Singh Bhatia, President of SIDM. The government, however, is using this route to push sale of defence products mainly in Africa. Shailender Arya, Senior Advisor at The Asia Group, who co-authored the report, emphasised the need for a targeted export strategy. “India must explore new geographies aligned with our cost advantages, backed by a physical presence and in-country after-sales support teams,” Arya told BusinessLine. “Defence is a technology-sensitive market — only continuous investment in R&D can keep Indian companies competitive globally,” he added. Before pushing for the RDP’s early conclusion, Indian firms must deepen their understanding of defence standardisation systems across key markets and align their products accordingly, the SIDM study recommended. Such alignment would facilitate market access, quality control, and international credibility. The report cites major standardisation frameworks for indigenous industry, such as: Many Indian defence exporters have already begun adopting international norms. However, the report suggests that SIDM could collaborate with the Bureau of Indian Standards (BIS) to develop globally compatible Indian defence standards, reinforcing the country’s long-term strategic autonomy. India’s defence production has surged in recent years, driven by policy reforms and budgetary support, in line with its goal of becoming a global defence manufacturing hub. The country targets Rs 3 lakh crore in defence production and Rs 50,000 crore in exports by 2029. Defence exports touched a record ₹23,622 crore in FY 2024–25, marking a 34-fold increase since 2013–14. India now ranks among the top 25 arms-exporting nations, with private industry contributing 60 per cent of total exports and Defence Public Sector Undertakings (DPSUs) accounting for the remaining 40 per cent. India currently exports a wide range of defence systems and components, including: 155 mm artillery guns, Pinaka multi-barrel rocket systems, Akash air defence systems, bulletproof jackets, Dornier Do-228 aircraft, Chetak helicopters, fast interceptor boats, lightweight torpedoes, among others. The United States, France, and Armenia are among India’s top defence export destinations. Published on October 29, 2025
