The U.S.-India Reciprocal Defense Procurement Agreement: A New Chapter in a Complex Relationship

By Stephanie Barna & Nooree Lee on September 16, 2026

Posted in Buy American, Country of Origin, Defense Industry, Domestic Preferences, FMS and DCS, Global Trade, Supply Chain

For decades, the United States and India circled each other as potential defense partners—aligned by democratic values and shared strategic concerns, yet separated by Cold War legacies and divergent procurement cultures. Now, a proposed Reciprocal Defense Procurement Agreement (“RDPA”) promises to open each country’s military marketplace to the other’s defense firms. But the road to completion of the agreement is neither short nor smooth.

A Brief History

U.S.–India security relations emerged as a signature achievement of the first Trump Administration, which laid much of the institutional groundwork on which the RDPA now under negotiation depends. The foundation was India’s designation as a Major Defense Partner—codified in Section 1292 of the NDAA for FY 2017.

In the summer of 2018, the Trump Administration granted India Strategic Trade Authorization Tier 1 status, clearing the way for license-free access to a wide range of advanced defense and dual-use technologies. U.S.–India defense trade climbed from near zero in 2008 to roughly $25 billion by the end of 2023.

The more specific seeds of the RDPA were planted in June 2023, when Prime Minister Modi and President Biden issued a joint statement calling for accelerated defense industrial cooperation and directing their governments to negotiate a Security of Supply Arrangement (“SOSA”) and initiate discussions toward a proposed RDPA. If concluded, the RDPA would provide reciprocal access to defense procurement opportunities—enabling Indian firms to compete for U.S. Department of War (“DoW”) contracts and U.S. firms to pursue Indian Ministry of Defence procurements. Pentagon officials cautioned at the time that these initiatives would “take probably years to negotiate,” but affirmed their commitment to beginning the process.

DoW moved swiftly on the procedural front. In October 2023, it published a formal Federal Register notice soliciting industry feedback on the proposed RDPA; negotiations began later that same year, and the two governments concluded the narrower SOSA in August 2024. Unlike an RDPA, a SOSA is non-binding: neither country is obligated to fulfill the other’s requests. Rather, each side commits to support the other’s priority delivery requests for critical defense resources.

The broader U.S.–India relationship came under strain in 2025 as U.S. tariffs on Indian goods climbed to 50%—including a 25% penalty tied to India’s purchases of Russian oil. Yet, defense negotiations proved notably resilient. On October 31, 2025, India’s Defence Minister Rajnath Singh and U.S. Secretary of War Pete Hegseth signed a new 10-year defense framework agreement—with both sides signaling continued momentum toward completion of the RDPA.

The wider relationship appeared to warm on February 6, 2026, when President Trump and Prime Minister Modi announced a framework for an interim trade agreement that lowered the U.S. reciprocal tariff to 18% and removed the Russian oil penalty, but uncertainties remain on broader trade issues. Against this backdrop came reports that the two nations were “close to concluding” the RDPA.

What an RDPA Would Mean for the U.S. Defense Industry

At its core, an RDPA is a binding government-to-government agreement in which each country agrees to treat the other’s defense industry as a trusted partner—reducing procurement barriers so that each can buy defense goods and services from the other’s suppliers on reciprocal terms. The United States has concluded such arrangements with 28 qualifying countries, including the United Kingdom, Australia, Japan, Israel, France, and Germany. India already collaborates closely with several of these qualifying countries in the Indo-Pacific region, including through the Quadrilateral Security Dialogue (Quad), which brings together India, Japan, Australia, and the United States.

For U.S. government contractors, an RDPA would open the Indian defense market and simultaneously allow greater sourcing from India for U.S. defense procurements. On the U.S. regulatory front, the operative change is one of status. Conclusion of an RDPA would make India a “qualifying country” within the meaning of DFARS 225.003—a designation that carries specific benefits for defense procurement:

Waiver of the Buy American Act (“BAA”). The BAA is the primary domestic preference regime for U.S. procurements and imposes a price evaluation penalty on foreign end products. Under an RDPA, Indian “qualifying country end products” would be evaluated without the BAA price differential—the single most consequential barrier the agreement removes.
- Broader press coverage may focus on increased competition the U.S. defense industry may face from Indian defense firms, but another significant impact would be the ability for U.S. firms to rely on lower-tier Indian suppliers.
- Currently, U.S. defense firms must exercise caution when integrating Indian suppliers into their supply chain. When assessing supply chain risk and BAA compliance, defense contractors look to leverage suppliers from countries with RDPAs or that fall within the Trade Agreement Act (“TAA”) exemption. India is not a member of the WTO’s Agreement on Government Procurement or a party to a bilateral free trade agreement—making it a non-compliant country for TAA purposes. An RDPA would be a game changer for U.S. defense contractors’ ability to leverage Indian suppliers, including for software development, although it is important to note that other non-BAA regulatory restrictions still may apply to Indian products.
- This works not because an RDPA waives the TAA, but because DoW’s Trade Agreements clause (DFARS 252.225-7021) independently treats “qualifying country” products as eligible on a defense buy despite India’s absence from the list of TAA countries. The result would differ on a civilian agency procurement governed by FAR 52.225-5, which recognizes only U.S.-made and TAA country end products—the same Indian item would not qualify there.

Relief from the specialty metals restriction. “Qualifying country” status would allow Indian-melted specialty metals—titanium, high-strength steels, and certain superalloys—to satisfy the domestic “melt and pour” sourcing rule (10 U.S.C. § 4863) that otherwise bars foreign-origin content in aircraft, missiles, ships, and weapon systems.

U.S. customs, taxes, and duties are waived for “qualifying country” end products and components of defense procurements.

The practical upshot is that Indian vendors would compete for U.S. DoW business on a footing much closer to their American counterparts, and American defense firms could leverage Indian sources of supply in a much more significant way.

Why It Matters Strategically

Beyond the black letter mechanics, the RDPA’s potential effects on supply chain resilience appeal to the United States at a moment when the American defense industrial base is under acknowledged strain. Analysts point to three RDPA “payoffs” for the United States:

First, DoW is seeking to replenish its munitions stockpiles through cost-effective, scalable sourcing strategies. Operation Sindoor—India’s five-day May 2025 campaign against key military installations in Pakistan—demonstrated that India’s relatively inexpensive, domestically adapted systems could blunt Pakistan’s more sophisticated and costly Chinese-sourced hardware. That lesson resonates with Pentagon leaders who are increasingly focused on proving that battlefield effectiveness need not carry a premium price. An RDPA could enable the United States to capitalize on India’s growing defense industrial capacity in much the same way that European manufacturers have leveraged Indian production capabilities to support the reindustrialization and scaling of Europe’s defense sector.

Second, an RDPA could further encourage India to turn westward for its own procurements, gradually loosening its historic dependence on Russia, particularly in emerging capability areas such as next generation unmanned and autonomous systems. By reducing barriers to defense trade and industrial cooperation, an RDPA could position U.S. suppliers to compete more effectively for a growing share of India’s modernization opportunities. Historically, such arrangements have tended to favor U.S. exporters. A December 2024 GAO review found that the United States sold an average of $9.7 billion annually in defense items to its RDPA partners while purchasing roughly $5.2 billion from those same countries. That said, a potential significant countervailing consideration is India’s ongoing revising of its Defence Acquisition Procedure (“DAP”), the principal regulatory framework for capital acquisitions by the Indian Army, Navy, Air Force, and Coast Guard. While it remains to be seen how an RDPA will interact with the updated DAP, the most recent 2026 draft places increased emphasis on indigenous development, and proposes affording increased evaluation weight to domestically designed technologies and Indian-owned intellectual property. As a result, enhanced market access resulting from an RDPA may be tempered by India’s continued commitment to strengthening its domestic defense industrial base.

Third, an RDPA with India is widely viewed as a proving ground for future agreements with countries such as South Korea and Brazil—a useful gauge of how much foreign competition the U.S. domestic industrial base will tolerate. The RDPA will test how willing U.S. policymakers, industry, and labor interests are to accept greater foreign participation in the U.S. defense marketplace in exchange for access to trusted partner capacity. Because India offers both significant scale and lower-cost manufacturing, it presents a particularly revealing case study. The outcome may help define the political boundaries of defense industrial integration for years to come.

For now, the RDPA remains a negotiation rather than a done deal—but for U.S. contractors, the opportunities it would unlock make it worth watching closely.