The announcement of a trade deal in February 2026 between India and the United States marked the end of a six-month period where Washington and New Delhi found themselves engaged in a careful, if tense, diplomatic dance. Publicly, both President Donald Trump and Prime Minister Narendra Modi held firm to their respective positions, even as private backchannel negotiations quietly sought common ground. While the U.S. side occasionally adopted a more theatrical posture, India chose strategic restraint, declining to respond to provocation in kind. Ultimately, it was this combination of discretion and persistence, rather than spectacle, that paved the way for consensus, allowing diplomacy to prevail over display.

Earlier, even in trying moments in their relationship, deft backchannel diplomacy always ran parallel, and tended to offset public posturing. However, the last few months tested that belief. With a trade deal now announced, it appears that the relationship is headed toward repair.

Against this backdrop, India and the United States are also close to concluding a Reciprocal Defense Procurement Agreement (RDPA) that will allow firms from the two countries to sell to each other’s defense establishments more easily. While this may not remedy the specific grievances both sides may have regarding larger bilateral issues, an RDPA could restore some momentum, following the trade deal announcement. To be clear, the real value of an RDPA lies in its ability to bolster industrial base resilience and encourage friendshoring. However, this RDPA could lead to second-order effects, such as generating trust and building confidence. Accordingly, this article will track what the two countries and their firms have at stake, possible roadblocks, and the potential road ahead.

What is an RDP Agreement?

An RDPA is essentially a joint defense pact that the United States signs with a counterpart country, with the effect that both countries would provide defense procurement benefits to each other on a reciprocity basis, consistent with their national laws. An RDPA is also meant to enhance the U.S. military’s readiness levels and even promote interoperability of defense equipment with that of the other country.

The U.S. Department of Defense (U.S. DoD) first announced its intention to sign an RDP with India in October 2023. Similar interest was shown toward Brazil and South Korea around the same time. It is important to note that India is already a signatory to all four major foundational defense agreements with the United States, including a Communications Compatibility and Security Agreement (COMCASA), Logistics Exchange Memorandum of Agreement (LEMOA), Industrial Security Annex (ISA), and Basic Exchange and Cooperation Agreement (BECA). While these agreements do not have bearing on whether an RDPA needs to be signed, they do provide a glimpse of the uptick in U.S.-India defense cooperation over the last decade.

It is also equally important to note that India already signed a Security of Supply Arrangement (SOSA) with the United States in August 2024. The SOSA, in short, provides a means for India and the United States to request priority delivery of certain defense items from each other. How it differs from an RDPA is that a SOSA is non-binding and, accordingly, neither country is obligated to fulfil requests made under it to the other. Additionally, an RDPA, unlike the SOSA, would make India a “qualifying country” under the Defense Federal Acquisition Regulation Supplement (DFARS), and this certification would smooth out additional compliance that Indian firms may need to sell to the U.S. industrial base. Lastly, an RDPA would bring Indian vendors up to par with their counterparts in the United States when selling to the U.S. DoD and vice versa, subject, of course, to each country’s national laws and sourcing rules. This is aligned with the U.S.-India joint statement issued in February 2025, in which both sides agreed to design a new ten-year framework for the U.S.-India major defense partnership for the twenty-first century, with an RDP agreement.

An RDPA would bring Indian vendors up to par with their counterparts in the United States when selling to the U.S. DoD and vice versa.

What’s in it for the United States?

The war in Ukraine, while redefining modern-day warfare and the strategic sensibilities around it, has also led to the depletion of U.S. munitions at an unprecedented scale. During his confirmation hearings, Lt. Gen. Dan Caine, the U.S. Joint Chiefs of Staff Chairman, even stated that the Joint Force was “contending with an acquisition process and defense industrial base that are not optimized for protracted conflict. The U.S. does not have the throughput, responsiveness, or agility needed to deter our adversaries.” Even where success has been achieved on the battlefield, there have been counterintuitive effects. For instance, one of the many reasons the industrial base in the United States has been under strain is due to the war in Ukraine, leading to drone companies in the United States competing for talent and components with other industries, particularly the aerospace industry.

India’s Operation Sindoor, a swift five-day military operation launched to strike at Pakistan’s terror camps and its key defense installations, showcased India’s growing weapons arsenal and military prowess, and was fairly well-received. Even the most hard-headed detractors of India’s defense preparedness concede that India’s defense missile system, including the Akashteer drone systems and the Brahmos missile system, performed very well. Reports have emerged about interest from Vietnam and Indonesia in India’s arms exports, which have also surged to an all-time high, with its latest defense exports being reported at approximately $2.75 billion.

There are, accordingly, three key reasons why the United States might also be interested. The timeline for these potential payoffs varies, however, and ranges from the near-term to long-term.

Firstly, during Operation Sindoor, Pakistan reportedly relied heavily on China’s latest military hardware for the first time. These included its J-10 fighter jets, among other defense equipment. Despite what was promised as the latest in sophisticated Chinese weaponry, the results were not correspondingly conclusive. India’s defense installations came out largely unscathed during Pakistan’s retaliatory strikes, and India even inflicted damage on major Pakistani airbases, all through the inexpensive and indigenous tweaking of its defense arsenal. This may resonate with the United States, which is looking to procure from inexpensive sources and “reinvigorate” its industrial base with “prudent investment” through its defense budget. An RDPA with India would help facilitate the supply of Indian designs, components, and other parts, and ensure feasibility.

Secondly, as was the case with SOSA, a pact like an RDPA would streamline American purchases from the Indian industrial base and help India turn westward for defense purchases. Indian arms purchases from Russia have traditionally constituted the bulk of Russia’s overall arms sales, and even though India has made progress when it comes to gradually transitioning away from Russia, it would be keen to diversify further. Traditionally, an RDPA leads to more defense sales to the United States compared to its cumulative sales to the signatories. A United States Government Accountability Office (GAO) report revealed that “On average, between 2019 and 2023, the U.S. sold an estimated $9.7 billion annually in defense items to its 28 RDP partner countries, while the U.S. purchased an estimated average of $5.2 billion annually.”

That said, a pivot from Russia for future defense purchases will be subject to various other factors. These include reforms to India’s procurement laws that currently favor the lowest bidder and do not always account for the full life-cycle costs of the product concerned, and India’s desire to avoid overdependence on any one country. Accordingly, this pivot would likely play out in the medium-term if an RDPA leads to closer defense ties between India and the United States.

Lastly, an RDPA with India might serve as a useful test case for future agreements with South Korea and Brazil—two countries that are ahead in terms of global arms export, according to SIPRI. An RDPA with India will test the waters for what is tolerable for the domestic industrial base in the United States. The impact of an RDPA with India on the U.S. defense industrial base can only be determined in retrospect. 

What’s in it for India?

India could see two key benefits in the near term. Firstly, Indian entities selling to the U.S. DoD would do so through a more streamlined process that would allow them to bypass the multiplicity of contracting agencies. Indian companies like Digantara, PierSight, and Pixxel are already working with the U.S. defense industrial base, and an RDPA could unlock more such collaborations.

Secondly, Indian entities that would supply through an RDPA could also see a huge boost in profile. A DFARS certification may also increase sales to the United States. Again, each country would have its own national defense requirements; however, a DFARS certification received through the RDPA would indicate, at least in principle, a company’s readiness to handle sensitive information and meet other exacting standards, even if DFARS itself does not serve as an internationally recognized certification.

Furthermore, once an RDPA is signed, removing India from the list of RDPA partner nations may also not be worth the trouble for the United States, particularly if Indian vendors have already made inroads into the U.S. market. This is because an RDPA would lead to the waiver of certain “Buy American” provisions that otherwise mandate preference for local suppliers.¹ If the RDPA agreement were to be suddenly revoked, it would endanger the performance of contracts that might have already been executed with Indian firms and lead to cost escalations and changes in performance timelines—all of which would again have implications on American defense preparedness.

Additionally, a validation of India’s defense items or its firms could increase procurement from other countries, add to India’s defense export volumes, and help meet defense export targets that have been steadily climbing over the last decade. An RDPA could also serve as proof of concept for ASEAN countries to consider buying Indian weapons. This could also allow India to participate more actively in friendshoring arrangements and strengthen its maintenance, repair, and overhaul ecosystems. This will, however, also require consistency from Indian firms and may take time play out.

An RDPA could also serve as proof of concept for ASEAN countries to consider buying Indian weapons.

Roadblocks

U.S. Congressional Concern

Notwithstanding the rationale behind an RDPA being mutually beneficial to both sides, there are concerns in the United States about them in general. For instance, U.S. Senators Tammy Baldwin (D-WI) and Jim Banks (R-IN) raised concerns through a joint letter in July 2025 about the RDPA’s larger review process. They seemed less concerned about any shortcomings in the substance of the RDPA and more worried about its vetting process, which, as their letter suggests, was more lenient and permissive and not seen as following the correct process outlined by U.S. federal law. The senators expressed concerns that the U.S. DoD screened most RDPAs without sufficient input from their domestic industry. However, there is a provision for public comments in the U.S. Federal Register where the decision for a potential RDPA is usually announced. It is unclear whether the senators were talking about feedback on the actual text of the RDPA as well, which appears to be fairly boilerplate across all countries.

Another complaint by the senators was that the U.S. Department of Commerce should have been more involved in the RDPA signing process through an interagency review. However, it appears that the U.S. Department of Commerce has never completed a review of an RDPA since it admittedly does not have the requisite guidance to determine whether it should seek an interagency review of an RDPA, in addition to the lack of guidelines that will determine if the United States’ commercial interests are being served through RDPAs. Similarly, in July 2024, Representative John Garamendi (D-CA) and Senator Debbie Stabenow (D-MI) wrote to the White House seeking assurances that RDPAs were fair for American workers and domestic manufacturing. The letter was relevant as both had also co-authored the “Make It in America Act,” which was enacted as part of the Joe Biden administration’s earlier Infrastructure Investment and Jobs Act to allow the White House to review all existing RDPAs.

Government Accountability Office Report

Garamendi and Stabenow’s letter led to the initiation of a GAO review, and subsequently, a GAO report on RDPAs, which appears to have influenced domestic American discussions on RDP agreements. This GAO report led to findings that the DoD did not solicit industry input for recent RDPAs with Luxembourg, the Czech Republic, and Poland. Furthermore, it found that there was scant official guidance from the DoD on policies and procedures specific to initiating and renewing RDPAs. Other criticisms related largely to the process and how due diligence was not undertaken in a manner prescribed by official federal laws. A premium was placed on industry inputs in the GAO report, but here, the industry response to requests for comments was acknowledged as being limited. For instance, between 2018 and 2024, the DoD published Federal Register notices for five partners—Japan, Lithuania, Brazil, India, and the Republic of Korea. Only thirteen public comments were received for all five prospective RDPA. Twelve of the thirteen comments were for proposed RDPAs with Brazil, the Republic of Korea, and India. Interestingly, and very relevant for India, the GAO report highlighted that out of the thirteen comments, seven were with respect to India, and four of them were classified by the GAO as being “opposed to the agreement.” The content of the comments themselves was not revealed, making it challenging to understand the nature of these objections to an RDPA with India.

While the nature of these specific objections is unclear, it is possible that these could relate to equitable access to the Indian defense procurement market. A similar concern was flagged in a 2013 Senate hearing that discussed market access to the larger Indian procurement market. Equally, the comments might have opposed India’s reciprocal access to the American defense procurement market, given that an RDPA entitles the DoD to provide the counterpart a waiver from the application of various sourcing laws. Essentially, these laws prefer domestic companies for federal procurement, which could take the form of local content requirement policies or domestic price preferences.

The former is quite straightforward in other countries’ procurement policies—it mandates a preference for goods that comprise domestically sourced components (defined as components where their overall cost constitutes a certain percentage of the total cost of the sourced good). The latter, domestic price preferences, operate in the following manner: The federal procuring agency adds a price “penalty” to the lowest price quoted by a foreign bidder (usually around 50 percent for the DoD) and compares that inflated price to the price quoted by a domestic firm. This provision is the cornerstone of the Buy American Act of 1933, which applies to bidders from countries that have signed an RDPA with the United States, unless waived by the DoD. It should, however, be noted that after this price comparison test, if the foreign bidder’s quote is still lower than that of the domestic firms, the DoD may purchase the foreign product.

American Procurement Laws

In surveying the landscape of the key laws that would apply to foreign vendors, three stand out.

First, the Buy American Act of 1933 (BAA), which largely focuses on domestic price preferences.  The second is the Trade Agreements Act of 1979 (TAA), which prohibits supplying products and services from non-TAA-designated countries. Here, it is interesting to note that India is not a TAA-designated country, and therefore, it would not be covered in connection with TAA-covered procurements without a waiver by the head of an agency or department. Lastly, the “Buy America” statutes that were increasingly legislated over the last decade by both the Trump and Biden administrations that largely focus on local content requirements. Here, it is important to note that signing an RDPA entitles the DoD to waive only the BAA and not the TAA and the Buy America laws.

Overall, the U.S. congressional concerns highlighted above and the findings from the GAO report are more in the nature of ensuring that no procedural shortcuts are taken when reviewing any RDPAs in the future, and therefore not necessarily India-centric in their criticism. However, any RDPA would still have to comply with local American procurement laws, which may not be an impediment to signing any agreement, but would still pose a challenge to the efficacy with which an agreement, once signed, is implemented.

Congressional concerns highlighted above and the findings from the GAO report are more in the nature of ensuring that no procedural shortcuts are taken when reviewing any RDPAs in the future, and therefore not necessarily India-centric in their criticism.

A Window of Opportunity for India Regardless?

Even within this vortex of laws applicable to U.S. government procurement, India could still enjoy reasonably healthy access to the American market, owing to five key reasons outlined below.

Firstly, the BAA is the most broadly applicable U.S. statute. Signing an RDPA would entitle the DoD to provide India with a waiver under it. However, even if this waiver was delayed or not offered, there may be a way for it to not be a hindrance to defense procurement from India. After all, the BAA is applicable to federal agencies’ purchase of “domestic end products” to be used in the United States. However, what constitutes “domestic end products” is contingent on whether it is a “manufactured end product” in the United States, among other criteria, and currently, there is no statutory definition of “manufactured” under the BAA. All that the BAA stipulates is that as long as the end product is manufactured “substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States,” it will be regarded as a “manufactured end product.” Here, relevant U.S. government agencies have almost always interpreted “substantially all” to hinge on whether the cost of a product’s U.S. components exceeds 50 percent of the cost of all its components. This percentage of domestic content requirement could be hiked in a staggered manner as well, but will likely not go beyond a 65 percent threshold. Therefore, if Indian vendors were to supply an end product with Indian content below 35 percent, it would suffice for the purposes of BAA as a domestic end product.

On top of this, and simply put, the BAA might perhaps not even be applicable if the Indian product in question is an “intermediate” product and not a “final” one. This might be the case if the product is a part, component, or sub-component.

The BAA does not apply to contracts for services, even though it may apply to products purchased under a services contract, which could include maintenance contracts that provide for replacement parts to the American buyer as well. The BAA is also not applicable to commercial information technology (IT) products. However, a Congressional Research Service dossier on federal procurement laws in the United States does state that any such contracts for IT products whose value exceeds the threshold of $183,000 would need to comply with the TAA, under which India is not designated as a partner country.

Finally, when it comes to the Buy America statutes, such as the 2021 “Build America, Buy America Act” under the Infrastructure Investment and Jobs Act, there is a requirement even there that the requirement therein must be applied in a manner consistent with the U.S. obligations under international agreements. However, whether the RDP agreements qualify as “international agreements” is unclear, as an RDPA is often referred to as a Memorandum of Understanding (MoU).

This is not to say that an RDPA will lead to an immediate surge in Indian defense exports to the United States. For instance, many U.S. agencies do not have to go for competitive bidding at all. Almost eleven federal agencies in the United States have the privilege to use the Other Transactions Authority (OTA), which entitles them to bypass competitive bidding processes altogether and source from a single vendor, effectively enabling them to contract the vendors of their choice, almost in a business-like manner. No Indian agency or procurement law has a similar provision, though certain military agencies in India have emergency procurement (EP) powers. Additionally, as emerging tech is increasingly adopted by agencies such as the DoD’s Defense Innovation Unit (DIU) through innovative contracting mechanisms, an RDPA may be bypassed there as well. India may do well to consider this when negotiating an RDPA.

From the vantage point of the United States, if an RDPA is finalized before India’s new reforms to the Defence Acquisition Procedure (DAP) manual are finalized, the agreement may lack the specificity needed to ensure American firms can compete on equal footing with Indian counterparts. This is not just an India-centric development. The U.S. National Defense Authorization Act 2025 envisions various reforms to the defense procurement process, including the ForGED Act and the “Restoring Common Sense to Federal Procurement” executive order, both part of the Trump administration’s push to modernize defense acquisitions. All these may change and shape the structure of American federal procurement laws in the coming years.

Way Ahead

In the February 2025 joint statement, India and the United States agreed to shape a new ten-year roadmap for defense industrial cooperation, alongside a commitment to an RDPA to better align their defense procurement systems. Yet, questions remain. Could a ten-year roadmap address contemporary and mutual problems, including the relative thaw in the U.S.–China relationship, and the impact of a potential grand bargain with China? Similarly, the recent thaw in India’s own relationship with the United States would mean that any such roadmap may not necessarily highlight China as a joint challenge or priority. While this could prevent alignment on a strategic vision on China, it should not affect the RDPA at its core, which is an instrument to not just facilitate access to the other partner country’s industrial base, but also for timely procurement.

This is the right time to conclude an RDPA, a logical next step for the two sides. India and the United States have signaled closer defense cooperation in the last few years. A Defense Technology and Trade Initiative (DTTI) was formalized in 2012, which focused on fostering co-production between both countries. Under it, however, the defense cooperation architecture between the two sides was not ready to unlock further cooperation. Genuine co-production required technology transfer and interoperability, which received a boost only later when the United States designated India as a major defense partner (MDP) in 2016. This was followed by further liberalization of U.S. export controls—India was granted a Strategic Trade Authorization (STA-1) exemption, and both sides signed foundational military agreements that allowed them to formally provide each other logistical military support. More recently, and for the reasons mentioned above, an RDPA would make most sense when the U.S. industrial base is under strain.

Finally, while the lessons from the wars in Ukraine and West Asia should not be extrapolated to regions with different dynamics, AI-enabled drone warfare is here to stay, and so is the nature of attritional conflict. This focus on other forms of warfare, and not just on defense platforms like bombers and warships, has arguably provided an opening to India’s defense industry, which has hit record numbers through exports. An RDPA makes sense as an instrument for defense cooperation first, and if signed, as a symbolic confidence-building measure for both sides.

The underlying trend toward closer defense cooperation may well continue between India and the United States, given their enduring long-term interests. The recent resolution of tariff issues may also speed up the signing of such an RDPA. After all, an RDPA, while seen by many as a defense MoU and not necessarily a form of trade agreement, is still emblematic of the larger issues that the fine print of the trade deal between the U.S. and India will have to address—market access, the trade-offs involved in negotiating such access, and a deal that would need to work for both sides. With the advantages that would accrue to both sides through an RDPA, its successful conclusion could well serve as another confidence-building measure for U.S–India bilateral ties and institutionalize cooperation amid any political friction.