IIndia’s Defense Acquisition Council recently approved the purchase of 114 Rafale fighter jets from Dassault Aviation. The value of the transaction is approximately 3.25 million rupees.
This followed French President Emmanuel Macron’s recent visit to India for an AI summit, where he pledged “technology transfer” that can significantly boost New Delhi’s defense capabilities.
Although this comes with a caveat, reports indicate that France has flatly denied sharing critical source codes, which will greatly limit India’s autonomy in customizing software systems and integrating sensor and radar systems.
This will curb New Delhi’s attempt to indigenize the operations of the Indian Air Force’s “Golden Arrows” squadron. This may also not be the only problem India faces in repositioning itself in the defense hierarchy.
Assembly versus autonomy
The Indian Air Force operates 29 fighter squadrons against an authorized strength of 42. The MiG-21 fighters retired in September 2025 after 62 years. Pakistan has about 25 squadrons. China found around 65. Operation Sindoor in May 2025 exposed this vulnerability through the largest non-visual range strike in the region’s history.
This reality underpins the Rafale purchase. Out of 114 planes, 18 will arrive in departure condition. The remaining 96 will be manufactured in India, with the original content initially 30% and eventually 60%.
Tata Advanced Systems has signed contracts with Dassault to manufacture four fuselage sections in Hyderabad, delivering up to 24 fuselages annually from FY2028.
The question is whether assembly means autonomy. In defense aviation, the geoeconomic impact is measurable.
It lies in the ratio of domestic added value, control over mission software, freedom to integrate third-party weapons, and autonomy over lifecycle upgrades, all of which now appear to be at risk. Depth of assembly without design authority changes the geography of production but not bargaining power.
France has placed ‘Make in India’ as the focal point of the partnership. However, technology transfer faces a critical limitation. While Dassault will co-produce the airframe and Safran M88 engines, access to the source codes for the electronic warfare and radar systems remains limited. This limits India’s ability to independently integrate indigenous weapons.
Software defines modern warfare. Any modification without access to the source code requires bilateral approval and expenses to foreign suppliers.
This is illustrated by India’s experience with Mirage 2000 upgrades, where dependence on a French supplier since 2011 has added more than €1 billion in integration costs for 50 aircraft. Turkey’s TF-X KAAN program illustrates the risks of partial transfer. Ankara has secured the rights to manufacture the airframes, but the engine remains dependent on foreign suppliers.
Diversification as leverage
Russia has reportedly offered unprecedented access to the source code of the Su-57 fighter jet as part of co-production consultations.
United Aircraft Corporation has signaled a willingness to provide greater access to source code than Western partners typically offer, potentially allowing deeper avionics customization. This represents a strategic defense against Western technological gatekeeping and uses existing infrastructure from the licensed production of the Su-30MKI.
However, the assurance is only credible if the supplier has the technological and industrial depth to honor it. Russia’s aerospace industry is operating under supply constraints caused by sanctions, and the Su-57 engine program remains in transition from the AL-41F1 to the Izdeliye 30.
Whether “full access to source code” extends to the mission system architecture or just limited avionics layers remains unclear. Provision that substitutes one dependency for another does not enhance autonomy.
India is closing in on a $3 billion deal to export Su-30MKI fighter jets to Armenia. The Armenian variant will feature the original Uttam AESA radar and Astra missiles. This marks India’s shift from a licensee to a modifier-exporter, signaling a new level of absorptive maturity.
India’s diversification across France, Russia, Israel and the United States prevents a supplier monopoly and strengthens bargaining leverage.
Operation Sindoor confirmed India’s punitive air power doctrine but exposed the complexities of coordination across the Rafale, Su-30MKI and Mirage 2000 platforms. This episode reinforced the primacy of software integration.
This increased the emphasis on integrated air command and control systems and theater command.
The Union Budget 2026-27 allocated a record Rs. 7.85 lakh crore to the Ministry of Defence, an increase of over 15%. Capital expenditure rose over 20% to Rs 2.19 crore. About 75% of the capital budget, Rs. 1.39,00,000 crores is earmarked for domestic purchases under the Boosting Indigenous Defense Manufacturing category.
This fiscal expansion is industrial policy by design. The mandate compels global original equipment manufacturers to set up not only assembly lines but also Tier 2 and Tier 3 supplier networks in India. Defense production to reach Rs 1.51 lakh crore in FY 2024-25. The share of the private sector rose to 23%.
However, context matters. China’s defense spending is estimated at around $249 billion. India’s $93 billion budget requires an asymmetric strategy and qualitative superiority rather than numerical parity.
Donald Trump’s recovery adds to transactional volatility. The delay in engine deliveries underscores how America’s industrial bottlenecks directly affect India’s sovereign capabilities. Diversification of technological partners in France, Israel and Russia is therefore a geo-economic necessity.
The road to strategic autonomy
The Indian Air Force achieved a TruVal Rating of 69.4 in the World Directory of Modern Military Aircraft 2026 ranking, placing it sixth globally. This beat China’s rating of 63.8. This rating reflects combat power and operational readiness. It does not measure industrial strength or technological sovereignty.
As SIPRI notes, India is the world’s fifth largest military spender at $86.1 billion in 2024 and remains the largest importer of arms and has a policy of reducing imports.
The decisive metric is absorption capacity. Defense research and development has received Rs 29,100 crore in FY 2026-27. Without doubling the intensity of research, the demands for joint development remain partial.
Tier 2 and Tier 3 suppliers face capital constraints. In advanced aviation ecosystems such as the United States and France, the domestic value of interception in fighter aircraft programs exceeds 60%.
In India, domestic value addition in major licensed manufacturing platforms has historically been between 25-35%, with a focus on structural manufacturing rather than mission systems. Without deepening subsystem ownership, domestic content goals risk remaining difficult to build.
Micro, small and medium enterprises lack the depth of certification and access to advanced materials. Aerospace manufacturing requires long-cycle capital and infrastructure to maintain quality. India risks becoming a tier 0 assembler without deep ecosystem capacity.
The lack of talent increases the infrastructure deficit. The demand for aerospace engineers is growing faster than the supply pipeline. Advanced manufacturing requires expertise in AI-driven design, digital twins, and simulation capabilities. Industrial sovereignty ultimately depends on the sovereignty of human capital.
Airframes are not real geoeconomic assets. This is a proprietary design architecture. Software-defined warfare means that source codes determine autonomy.
Rafale’s integration dependency limits weapon customization. Su-57 negotiations potentially bypass Western gatekeeping. Indigenous platforms like Tejas Mk2 and Advanced Medium Combat Aircraft have been accumulating intellectual property for decades.
India’s fighter jet momentum is less about air dominance and more about industrial positioning. In the era of transactional geopolitics shaped by Trump’s return, strategic autonomy will not be measured by planes on the tarmac. It will be measured by who owns the code in them.
The 114 Rafale program, the Su-57 consultation, Armenian exports and the development of Tejas signal structural ambitions. The transformation depends on four conditions. First, doubling the intensity of research and development to meet global standards.
Second, building extensive aviation supply chains with access to capital and certification opportunities. Third, securing access to source code through strategic negotiations or indigenous development. Fourth, scaling top technical human capital through formalized training programs.
As for the Rafales source code, if New Delhi remains dissatisfied with the API model offered by France, then it might be time to re-introduce the GaN model and boost “Atmanirbhar Bharat”, which could be the first statement, if not the first step, to achieve defense autonomy.
The lab, not the runway, will determine whether India moves up the defense hierarchy or remains its most sophisticated customer in the medium to long term. The real question is whether India can change the global geography of aerospace manufacturing or remain entrenched in it on others’ terms. Weapons are tools for which the goal is industrial capacity to be built on greater defense technology transfer and incorporation, requiring careful policy and maneuvering.
Deepanshu Mohan is Professor and Dean of OP Jindal Global University and Director of the Center for New Economic Studies (CNES). Saksham Raj and Nagappan Arun contributed to this column and are both research analysts at the Center for New Economic Studies, OP Jindal Global University.
