Of Jets and Journeys: How India’s Defence Policy Could Reshape Its Military Destiny 

India’s groundbreaking collaboration with Safran for indigenous jet engine production, featuring full tech transfer and IP rights, signals a transformative shift in defence procurement. This occurs alongside a critical review of the “broken” Defence Acquisition Procedure 2020, aimed at overcoming historical inefficiencies. The challenge lies in reconciling conflicting stakeholder interests: foreign firms seek greater ownership control, while domestic industry advocates for protection.

Past policies have boosted production but failed to attract significant foreign investment or cutting-edge technology. A proposed solution involves creating a new procurement category, allowing 100% FDI for trusted partners in critical technology gaps. This strategic policy overhaul could position India as a premier destination for co-development and strengthen its strategic autonomy. The outcome will define India’s military-industrial trajectory for years to come.

Of Jets and Journeys: How India’s Defence Policy Could Reshape Its Military Destiny 

The recent announcement of India’s collaboration with French firm Safran to develop advanced jet engines domestically represents far more than a single procurement deal. It is a potential blueprint for the future—a signal that India is rethinking the very fundamentals of how it acquires military technology. As the government undertakes a critical review of its Defence Acquisition Procedure (DAP) 2020, the nation stands at a crossroads. The path it chooses could either unlock unprecedented foreign technology transfer and investment or reinforce the stubborn barriers that have long hindered its quest for defence self-reliance. 

The Safran Model: A New Blueprint for Partnership? 

The proposed partnership with Safran is being hailed as a “new defence procurement model” for a reason. Unlike past arrangements that often involved licensed manufacturing with limited know-how, this Government-to-Government (G2G) deal promises 100% technology transfer, complete Intellectual Property (IP) rights for India, and no export restrictions on the jointly developed engine for the Advanced Medium Combat Aircraft (AMCA). 

This model directly addresses the core frustrations foreign original equipment manufacturers (OEMs) and Indian strategists have voiced for years. OEMs are traditionally reluctant to part with their crown-jewel technology through traditional routes like offsets, which have a poor track record. For India, previous partnerships often left it assembling kits rather than truly understanding and mastering the underlying engineering. The Safran deal, if its promises are fully realised, suggests a shift towards genuine co-development and deep technology integration, moving beyond mere assembly. 

The “Broken” System and the Stakes of the DAP Review 

The ongoing review of DAP 2020 is not a routine bureaucratic exercise. The Defence Secretary himself labelled the current procedure as “broken,” citing procurement categories that lie dormant and processes that create delays rather than deliver capabilities. 

This admission is significant. India’s defence procurement policy has been on a two-decade journey: 

• Pre-2002: A closed ecosystem dominated by Defence Public Sector Undertakings (DPSUs). 

• 2002 Onwards: A gradual opening, allowing private sector participation and introducing the concept of Transfer of Technology (ToT). 

• 2016: A strategic pivot under then-Defence Minister Manohar Parrikar, introducing the ‘Indigenously Designed, Developed and Manufactured’ (IDDM) category, marking a shift from making in India to creating in India. 

While these policies have boosted defence production and exports, they have also created uncertainty. Constant shifts in priorities—from favouring foreign OEMs to prioritising Indian content—have made it difficult for both domestic and international companies to plan long-term investments. 

The Core Conflict: Stakeholder Stand-Off 

The DAP review committee faces a formidable challenge: reconciling fundamentally conflicting interests. 

• Foreign OEMs seek higher Foreign Direct Investment (FDI) limits (preferably 100% under automatic routes) and lower, more flexible definitions of “indigenous content.” They want control over their IP and operations. 

• Indian Private Industry strives to protect its hard-won gains, advocating for lower FDI caps and high indigenous content requirements to ensure they are not sidelined. 

• DPSUs aim to retain their privileged position as the government’s preferred partners. 

• Neither Indian private firms nor DPSUs are typically enthusiastic about G2G deals, which can bypass them entirely, while foreign OEMs often prefer them for their speed and high-level backing. 

This stand-off explains why raising the FDI limit to 74% under automatic routes in 2020 failed to trigger a wave of investment. OEMs are unwilling to transfer cutting-edge technology without full ownership and control, and the “government approval route” for 100% FDI is seen as opaque and case-by-case, with no clear guidelines on what constitutes “modern technology.” 

A Carve-Out for Trusted Partners: A Potential Path Forward 

The solution may lie in a nuanced, targeted approach rather than a blanket policy. One compelling idea is to create a new procurement category specifically for advanced technologies where Indian industry lacks expertise. 

Under this model, for specific, predefined critical technologies (like jet engines, hypersonics, or certain semiconductors), 100% FDI could be allowed under the automatic route for entities from trusted partner countries. This would allow a company like Safran to establish a wholly-owned Indian subsidiary. This subsidiary—an Indian-registered company—could then bid for contracts, manufacture locally, and hold the technology, all under Indian law and in Indian rupees. 

This aligns perfectly with the core philosophy of ‘Make in India’—procurement in India, from an Indian company, paid for in Indian currency. It removes the OEM’s fear of losing control and IP while giving India what it truly needs: deep-rooted technological capability, jobs, and economic activity on its soil, not just a finished product. 

The Bigger Picture: Diplomacy and Industrial Ecosystem 

A forward-looking DAP is not just about procurement; it’s about geopolitics. Defence industrial cooperation is a cornerstone of modern strategic diplomacy. Closer ties with partners like France, the US, Israel, and Japan are strengthened not just through arms sales, but through shared research, development, and production. A predictable, transparent, and attractive DAP can make India a more compelling partner in these alliances. 

The review of DAP 2020 is a defining moment. It is a chance to move from a procedure often seen as restrictive and unpredictable to a policy that acts as an enabler—a framework that attracts the best of global technology to merge with India’s ambitious industrial and strategic goals. By making bold, sensible choices that acknowledge the concerns of all stakeholders while prioritising national capability, India can finally build the secure and self-reliant defence ecosystem it needs for the 21st century. The success of the Safran model offers a glimpse of that potential future; the new DAP must now help replicate it across the entire defence sector.