Defence deals

Story hook

It is 3 April 2025, Mumbai. Defence Minister Rajnath Singh + French Defence Minister Sébastien Lecornu ink a ₹63,887 crore ($7.6 bn) Rafale-Marine deal for 22 single-seat + 4 twin-seat Rafale-M fighter jets to operate from INS Vikrant (and follow-on carriers). It is the largest defence contract in India's history and the first major deal of FY26. Deliveries 2028-2030. Indian aerospace SMEs get 30% offset of ~₹20,000 crore. Within two days, Dassault Aviation's share price jumps 4% in Paris; HAL Bangalore confirms component manufacturing.

Five months earlier, 23 November 2024, Delhi. External Affairs Minister S. Jaishankar stands beside Pentagon Chief Lloyd Austin as both sign the Security of Supply Arrangement (SOSA) — committing the US to prioritise Indian orders during crises. Days later, NSAs Sullivan + Doval announce that iCET delivered: Stryker armoured vehicle joint production

• Jet engine GE F-414 production + MQ-9B drones + AI computing. Five years of slow tech-transfer breakthroughs crystallise.

Meanwhile, India's trade with all major partners reshapes 2024-25:

• India-US trade FY24: $118 billion (#1 partner; trade surplus $35 bn).
• India-China trade FY24: $118 bn (close 2nd; trade deficit $85 bn — record).
• India-UAE FY24: $84 bn (#3; FTA at $50 bn non-oil milestone).
• India-Russia FY24: $66 bn (#4; record from $9 bn FY22, largely Russian crude).
• India-Saudi Arabia FY24: $43 bn (#5).
• India-Singapore FY24: $36 bn (#6).
• India-Germany FY24: $32 bn (#7).

Five free-trade agreements in active negotiation in 2024: India-EU FTA (since 2007, re-launched 2022, accelerating 2025), India-UK FTA (since 2022, near-conclusion 2025), India-Australia ECTA (in force Dec 2022 → CECA upgrade 2025), India-EFTA TEPA (signed 10 March 2024 — 4 European states), India-Oman FTA (under negotiation).

This is 2024-25 in India's external trade + defence landscape — a year when arms deals + FTAs + connectivity corridors + strategic agreements coalesce into a sharper Indo-Pacific economic security architecture.

Why this matters for UPSC

Prelims: FY24 trade numbers; India-EFTA TEPA signed 10 March 2024 ($100 bn FDI commitment over 15 years; first FTA with EFTA); Australia ECTA in force 29 December 2022; India-UAE CEPA (1 May 2022); India-Japan CEPA (2011); India- Korea CEPA (2010); India-Singapore CECA (2005); India-Mauritius CECPA (2021); India-ASEAN FTA (2010, review ongoing); recent defence deals (Rafale-M Apr 2025; GE F-414 Jan 2025; MQ-9B Jun 2024; S-400 Oct 2018; Stryker 2024); SOSA Nov 2024.

Mains GS-II/III: India as world's 5th-largest economy ($3.7 tn FY24); trade deficit + currency stability; protectionism vs liberalisation; Indo-Pacific economic security framework; FTA strategy (RCEP exit 2019 vs new bilateral push); CBAM threat; bilateral defence economics; offset utilisation.

Interview: Why did India exit RCEP and now pursues bilaterals? What's the right hedging strategy for $85 bn China deficit? Did GE F-414 deal justify US foundational pacts?