The Rafale Watershed, India’s Defence Modernisation, Strategic Autonomy, and the Imperative of Indigenisation in a Fractious World
The decision to acquire 114 Rafale aircraft at a cost of ₹3.25 lakh crore is not merely another defence procurement; it is an event of exceptional significance. Of these, 96 will be manufactured in India, marking a decisive shift from being a buyer of finished military hardware to a partner in co-production and a builder of indigenous capability. Alongside the Tejas aircraft from Hindustan Aeronautics Ltd, the Rafales—36 of which are already in operation with the Indian Air Force, with some being deployed by the Navy—will replace the ageing MiG-29 fleet of over 100 aircraft. France’s 4.5-generation Rafales could well become the backbone of India’s Air Force for decades to come.
The accompanying analysis, drawn from a defence and strategic affairs perspective, situates this procurement within a broader context of geopolitical manoeuvring, indigenisation efforts, and the urgent lessons of recent conflicts. India has scored a geopolitical point by resisting persistent US efforts to sell its F-35 fighter, choosing instead to deepen its strategic partnership with France. This is not a rejection of the United States; it is an affirmation of India’s commitment to multi-alignment in a fractious world. India will engage with all major powers on terms that serve its interests, not at the expense of its autonomy.
The pivot to the Rafale also has implications for India’s relationship with Russia. Efforts to indigenise the production of the Advanced Medium Combat Aircraft (AMCA), a fifth-generation fighter, with the involvement of private players, suggest that Russia’s SU-57 may not take centre stage after all. This is not a repudiation of Russia, which remains a valued partner, but a recognition that India’s defence needs are too important to be dependent on any single source.
The broader picture is one of a defence ecosystem coming of age. According to a March 2025 report of the Parliamentary Standing Committee on Defence, 89 per cent of contracts for defence equipment finalised between March 2019 and December 2024 were signed with Indian vendors. Defence exports are in the region of ₹25,000 crore, with the private sector contributing two-thirds of that total. These are not marginal achievements; they are signs of a fundamental transformation.
The Rafale Decision: Geopolitics and Capability
The choice of the Rafale over the F-35 is significant on multiple levels. The F-35 is the most advanced fighter aircraft in the world, a fifth-generation platform with stealth capabilities that the Rafale, a 4.5-generation aircraft, cannot match. But the F-35 comes with strings attached. The United States maintains strict control over its use, including the ability to remotely disable the aircraft if it falls into the wrong hands or if the operating country acts against US interests. This is not a theoretical concern; it is embedded in the architecture of the aircraft.
The Rafale, by contrast, comes with no such restrictions. France is willing to transfer technology, to co-produce, to treat India as a partner rather than a client. This aligns with India’s long-standing commitment to strategic autonomy—the ability to make decisions based on national interest, not the preferences of others. The Rafale deal is a tangible expression of that commitment.
The geopolitical point is not lost on other players. India has demonstrated that it has options, that it will not be forced into dependence on any single supplier, and that it values partnerships that respect its sovereignty. This sends a signal to all potential partners: engage with India on terms of mutual respect, or watch others do so.
The Indigenisation Imperative: From Buyer to Builder
The most significant aspect of the Rafale deal is not the aircraft themselves but the fact that 96 of them will be manufactured in India. This is not assembly; it is manufacturing, involving technology transfer, skill development, and the creation of an industrial ecosystem. It builds on the experience gained from the Tejas programme and positions India to become a serious player in the global defence industry.
The statistics on indigenisation are striking. The Parliamentary Standing Committee on Defence reported that 89 per cent of defence equipment contracts finalised between March 2019 and December 2024 were signed with Indian vendors. This is not a coincidence; it is the result of deliberate policy. The government has prioritised domestic procurement, created incentives for private sector participation, and invested in research and development.
Defence exports have reached ₹25,000 crore, with the private sector accounting for two-thirds of that total. This is a remarkable achievement for an industry that was, until recently, dominated by public sector undertakings and focused almost entirely on meeting domestic demand. Indian defence companies are now competing in global markets, and they are winning.
The push for indigenisation is not just about economics; it is about security of supply. In a crisis, dependence on foreign suppliers can be fatal. The experience of Operation Sindoor, which necessitated the replacement of ammunition and spares, underscored this point. A country that cannot produce its own weapons is not fully sovereign.
The Lessons of Operation Sindoor: Drones, Satellites, and Precision Warfare
Operation Sindoor, India’s military response to the 2025 terrorist attack in Kashmir, was a watershed in its own right. It demonstrated the effectiveness of precision warfare, real-time intelligence, and the integration of drones and satellites into combat operations. But it also revealed the extent to which Pakistan has benefited from Chinese technology and weaponry. The Ministry of Defence flagged this point in late 2025 as it made the case for raising the defence budget to 2.5 per cent of GDP.
The recent US action in Venezuela reinforced the same lessons. Modern warfare is increasingly about unmanned systems, space-based assets, and the ability to process and act on real-time intelligence. The country that masters these domains will have a decisive advantage on the battlefield. India has made progress, but there is much more to do.
The Budget reflects this urgency. Defence outlay has been increased by 22 per cent in capital expenditure, to ₹2.19 lakh crore, representing 28 per cent of the total defence outlay of ₹7.84 lakh crore. This marks a break from the past, when capital expenditure was often squeezed to meet revenue requirements. The increase is intended to fund higher spending on research and development, cyber warfare, unmanned systems, and export promotion.
The Budget Context: Reversing a Decline
The defence budget allocation of ₹7.84 lakh crore is about 2 per cent of GDP and close to 14 per cent of the total Budget size. This reverses a decline on both counts since FY20. But the headline figures can be misleading. Salaries and pensions account for half the defence budget, and this will remain the case for the foreseeable future. Large budgetary increases with an accent on modernisation are therefore essential if India is to maintain a credible deterrent.
The integrated approach to defence, electronics, and semiconductors, as spelt out in recent policies and Budgets, is the way forward. Defence capabilities cannot be built in isolation; they depend on a robust industrial base, a skilled workforce, and cutting-edge research. The National Quantum Mission, investments in critical minerals, and the push for semiconductor manufacturing are all part of this broader effort.
Conclusion: The Watershed and the Way Forward
The Rafale deal is a watershed, but it is not an endpoint. India’s defence modernisation is a continuous process, one that requires sustained investment, strategic clarity, and the ability to adapt to a rapidly changing technological and geopolitical landscape. The lessons of Operation Sindoor, the experience of indigenisation, and the imperative of multi-alignment all point in the same direction: India must build a defence ecosystem that is capable, resilient, and autonomous.
The challenges are immense. The threats are real. But the direction is clear. India is no longer content to be a buyer of weapons; it is becoming a builder. It is no longer willing to be a pawn in great-power games; it is becoming a player. The Rafale deal is a symbol of that transformation. The work of building on it has just begun.
Q&A Section
Q1: What is the geopolitical significance of India choosing the Rafale over the US F-35 fighter?
A1: The choice is significant because it demonstrates India’s commitment to strategic autonomy and multi-alignment. The F-35, while more advanced technologically, comes with strict US controls, including the ability to remotely disable the aircraft if it falls into the wrong hands or if the operating country acts against US interests. The Rafale, by contrast, comes with no such restrictions and includes technology transfer and co-production arrangements that treat India as a partner rather than a client. India has signalled that it will not be forced into dependence on any single supplier and that it values partnerships that respect its sovereignty. This sends a message to all potential partners: engage with India on terms of mutual respect, or watch others do so. The choice also deepens India’s strategic partnership with France, a reliable partner that has consistently supported India’s defence needs without imposing conditionalities.
Q2: What is the significance of manufacturing 96 of the 114 Rafale aircraft in India?
A2: The fact that 96 of the 114 aircraft will be manufactured in India marks a decisive shift from being a buyer of finished military hardware to a partner in co-production and a builder of indigenous capability. This involves technology transfer, skill development, and the creation of an industrial ecosystem that will benefit the entire defence sector. It builds on the experience gained from the Tejas programme and positions India to become a serious player in the global defence industry. The “Made in India” component also enhances security of supply, reducing dependence on foreign suppliers and ensuring that India can maintain and upgrade the aircraft over their decades-long service life without being held hostage to the whims of other governments.
Q3: What do the statistics on indigenisation and defence exports reveal about India’s defence ecosystem?
A3: The statistics reveal a fundamental transformation. According to a March 2025 Parliamentary Standing Committee report, 89 per cent of contracts for defence equipment finalised between March 2019 and December 2024 were signed with Indian vendors. This is the result of deliberate policy prioritising domestic procurement, creating incentives for private sector participation, and investing in research and development. Defence exports have reached ₹25,000 crore, with the private sector contributing two-thirds of that total. This is a remarkable achievement for an industry that was, until recently, dominated by public sector undertakings and focused almost entirely on meeting domestic demand. Indian defence companies are now competing in global markets, demonstrating that the ecosystem is coming of age. The statistics show that indigenisation is not just a slogan; it is a reality.
Q4: What lessons did Operation Sindoor impart about modern warfare and India’s defence needs?
A4: Operation Sindoor, India’s military response to the 2025 terrorist attack in Kashmir, imparted several critical lessons. It demonstrated the effectiveness of precision warfare, real-time intelligence, and the integration of drones and satellites into combat operations. India easily overcame Pakistan’s challenge, but the operation also revealed the extent to which Pakistan has benefited from Chinese technology and weaponry. The Ministry of Defence flagged this point in late 2025 as it made the case for raising the defence budget to 2.5 per cent of GDP. The operation also necessitated the replacement of ammunition and spares, underscoring the importance of having robust domestic production capacity. The lessons of Operation Sindoor, reinforced by the recent US action in Venezuela, point to the primacy of unmanned systems, space-based assets, and the ability to process and act on real-time intelligence in modern warfare.
Q5: What is the significance of the defence budget increase, and what priorities does it reflect?
A5: The defence budget allocation of ₹7.84 lakh crore, about 2 per cent of GDP and close to 14 per cent of the total Budget size, reverses a decline on both counts since FY20. More significantly, capital outlay has been increased by 22 per cent to ₹2.19 lakh crore, representing 28 per cent of the total defence outlay. This marks a break from the past, when capital expenditure was often squeezed to meet revenue requirements. The increase reflects a recognition that modernisation cannot wait and that India must invest in research and development, cyber warfare, unmanned systems, and export promotion. Since salaries and pensions account for half the defence budget and will remain at that level, large budgetary increases with an accent on modernisation are essential. The budget also reflects an integrated approach to defence, electronics, and semiconductors, recognising that defence capabilities depend on a robust industrial base, a skilled workforce, and cutting-edge research. The National Quantum Mission, investments in critical minerals, and the push for semiconductor manufacturing are all part of this broader effort.
