This essay is part of a series that highlights the main takeaways from discussions that took place at Carnegie India’s eighth Global Technology Summit, co-hosted with the Ministry of External Affairs, Government of India.

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On June 21, 2023, India and the United States launched INDUS-X, or the India-U.S. Defense Acceleration Ecosystem. The primary objective of INDUS-X is to vitalize defense cooperation between the industrial bases of the two countries. In the past as well, a wide array of agreements have been executed between the two governments, and it is therefore worth reflecting on the arc of progress following these initiatives, in particular INDUS-X.

To this end, Carnegie India convened a defense innovation workshop during the Global Technology Summit 2023 in collaboration with FedTech, a venture accelerator firm based in the United States. This essay lays out some key takeaways from the workshop, notes the developments that have taken place in the U.S.-India defense relationship so far, and charts the possible way forward.

Quick Wins Achieved

Thus far, two key accomplishments have been made under the INDUS-X framework.

The Launch of the DIU-iDEX Joint Challenges

The Defense Innovation Unit (DIU) within the U.S. Department of Defense (DoD), which is tasked with accelerating the adoption of commercial technology throughout the U.S. military, and Innovations for Defence Excellence (iDEX) under the Indian Ministry of Defence jointly announced the launch of two challenges under INDUS-X in September 2023. The first dealt with the domain of maritime intelligence, surveillance, and reconnaissance (ISR) and focused on oil spill detection and tracking technologies. The second challenge pertained to the realm of underwater communication, with a specific focus on technologies that can support high-bandwidth communication under water.

The Convening of the INDUS-X Investor Strategy Session

The first-ever INDUS-X investor strategy session was convened in November 2023. It focused on the need to mobilize capital and sustain collaboration between the private sectors of both countries. At the session, both sides also announced the launch of the INDUS-X Gurukul Education Series. This will involve monthly events that bring together government officials and private sector leaders from the two countries to discuss business and technology developments along with their respective regulatory regimes.

While the above sessions may seem like incremental steps in the bilateral defense cooperation relationship, they are a step in the right direction for the following reasons:

First, rather than announce ambitious targets to jointly develop platforms, the current approach focuses on step-by-step measures. The former could lead to both sides falling short of expectations, given that INDUS-X involves a range of stakeholders, from academia to investors, start-ups, primes, and incubators. Instead, the latter approach tempers expectations and leads to the execution of realistic outcomes. This does not, however, eschew the possibility of collaborating on big-ticket defense projects down the line. Rather, it signifies a desire to proceed in an iterative manner.

Second, the nature of bilateral defense cooperation shows a keen awareness of the lessons learned from the recent war in Ukraine, which has laid an emphasis on precision warfare. For instance, the DIU-iDEX joint challenges concern certain emerging technology domains that have proven to be critical during the war. By focusing on undersea communication and maritime ISR, both the United States and India recognize that through the integration of modern sensors, munitions, and artificial intelligence, precision warfare will complement traditional modes of conducting military operations in the future.

Lastly, since the purpose of INDUS-X is to innovate, it makes sense for both countries to exploit “the next big thing” in advanced warfare. Here, the U.S.-India roadmap for defense industrial cooperation is instructive and suggests that this approach to advanced warfare should be led by something akin to a demand-side solution. That is, both countries would jointly identify projects to solve military problems of mutual interest. This is a welcome suggestion since it focuses on working with technologies that both countries require and could possibly develop together.

The Way Forward

Despite the progress that has already been made, both sides could consider additional mechanisms in the coming months to bolster defense industrial cooperation.

Integrating India Into the U.S. National Defense Industrial Strategy

The United States recently launched its first-ever National Defense Industrial Strategy (NDIS). It is aimed at building resilience in U.S. supply chains not just for the United States but also for its allies and partners, among which it includes India. The NDIS also acknowledges the attritional effect of the protracted war in Ukraine and calls upon the DoD to “incorporate allies and partners at every stage of defense planning.” This has been recommended through mechanisms such as the security of supply arrangements (SOSAs), which would offer numerous advantages to both sides.

Firstly, a SOSA with India would allow the DoD and the Indian Ministry of Defence to request that the performance of contracts from companies based in each other’s countries be prioritized. Secondly, such an arrangement does not provide legally binding obligations. Thirdly, companies from SOSA partner nations could familiarize themselves with the defense ecosystem in the United States and vice versa. Lastly, even though a SOSA is entered to provide the delivery of defense items on priority, the successful performance of any defense contract thereunder could lead to follow-on orders down the line as well. Currently, a SOSA between both countries is being negotiated and is close to being finalized.

Collaborating Through the Replicator

The Replicator was launched by the DoD in August 2023. The purpose of this initiative is to create state-of-the-art military technology that focuses on less expensive, autonomous systems that can be constantly improved. The unique selling point of this program is that it operates on a hyper-compressed timeline, aiming to field new technologies in various domains within eighteen to twenty-four months. The initiative also seeks to pursue collaboration and integration with allies and partners.

India and the United States should consider harnessing the benefits of the Replicator in their defense industrial partnership for the following reasons:

1. It is aimed at a variety of domains, including drones, where India has shown an ability to innovate indigenously.
2. The tight timeline of twenty-four months could mesh well with INDUS-X, where DIU-iDEX joint-challenge winners may seek procurement as the next step.
3. The program acknowledges the expanding costs of pursuing sophisticated defense platforms, in which regard India’s low-cost production capabilities may be leveraged to pursue the desired cost-effectiveness.

Pursuing Interoperable Standards

The lack of interoperable standards between Indian and American companies could pose challenges for the former in the process of complying with various U.S. security classifications. For instance, while both the Indian Ministry of Electronics and Information Technology and the DoD have established standards and processes to regulate cloud services in their respective countries, it is unclear whether these are interoperable with each other. However, it is worth exploring whether at least a similar accreditation process can be established for critical and emerging technology items as well, particularly in the domain of defense-related products. Enhancing standardization here could lead to more interoperability and greater economies of scale.

A Template for Future Partnerships

India has recently started engaging in deeper defense industrial partnerships with other countries too. Is it possible that the INDUS-X initiative could serve as a general template as it does so? For example, the latest roadmap released for France-India defense industrial cooperation is short on details but charts out a broad strategy for cooperation in the maritime domain for the most part.

It is hard to tell how cooperation in an area as dynamic as defense innovation may progress. But for now, the United States and India have the chance to build on the good start achieved by INDUS-X.