A fragmented arms market offers India a chance to gain influence

For nearly eight decades, Japan’s constitutional framework ensured that its defence production existed primarily to service domestic requirements and not as an instrument of geopolitical influence or commercial statecraft.  The decision in April to relax restrictions on the export of lethal military equipment tells us much about how the major powers now view the evolving geopolitical environment. 

The world arms order, for decades, was led by American dominance, Russian competition, selective European specialisation, and a large universe of dependent importers. This era is now in flux. New suppliers are entering the market with credible industrial capabilities. Traditional suppliers are either preoccupied with domestic strategic demands or constrained by geopolitical circumstances. Buyers, meanwhile, are increasingly reluctant to rely on any single source of military technology or supply.  

Gulf nations, particularly the UAE and Saudi Arabia, traditionally big buyers, are increasingly looking to develop alternative models.  The result is not so much the collapse of the old order as the gradual emergence of a more diversified and competitive marketplace in which strategic autonomy has become an organising principle for buyers. 

American defence exports are rarely commercial transactions. They are embedded within a wider political and strategic architecture that links military procurement with alliance structures, intelligence relationships, interoperability arrangements, and broader geopolitical alignment. That model remains influential, but it no longer carries the same aura. American military power may be unmatched in aggregate capability, but the willingness, ability and the reliability of Washington to sustain long-term commitments across multiple theatres is increasingly being debated, including within the United States itself. The shifts in its strategic emphasis have reinforced a perception that strategic dependence on a single supplier carries risks. 

For India, this creates an interesting paradox. The past two decades saw an unprecedented expansion in Indo-US defence cooperation. American aircraft, helicopters, artillery systems, surveillance platforms and maritime assets became important components of India’s military modernisation. India welcomed American technology and cooperation but without embracing the alliance structures that typically accompany such military relationships elsewhere. 

The renewed American engagement with Pakistan under Trump 2.0 has complicated the picture. Even if such engagement remains limited, it reinforces India’s instinctive preference for diversified sourcing, as reflected in its recent preference for European platforms over American ones. 

Russia’s defence industrial base has come under immense pressure due sanctions-related constraints, labour shortages, and the prioritisation of domestic military requirements. Export commitments have slowed, maintenance timelines have become uncertain, and the long-term reliability of Russian supply chains is being reassessed across Asia, Africa, and West Asia. Markets that historically depended on Russian platforms are now searching for alternative partners for servicing, spares and maintenance, as well as new supplies with credible technology and without excessive political conditionality. India, with its extensive industrial capability on Russian platforms, can fill the void. 

China’s defence-industrial expansion powered by an attractive combination of affordability, rapid delivery, financing flexibility, and limited political conditionality has led to its emergence as a growing global player, particularly in cost-sensitive markets. China’s manufacturing scale in shipbuilding and electronics is now formidable. While Chinese exports are concentrated heavily in Africa, parts of Asia, and West Asia, their future potential may be considerably larger as countries look to diversify their sourcing.  

The Ukraine conflict and US pressure on European nations to play a bigger role in the North Atlantic Treaty Organization (Nato) has led to a sizeable expansion in European defence spending and a renewed emphasis on domestic military preparedness. Europe continues to possess advanced capabilities in aerospace engineering, propulsion technologies, electronic warfare, and high-end defence manufacturing. France, Germany, and the United Kingdom are investing heavily in rebuilding industrial capacities that had contracted. This inward orientation may temporarily reduce the intensity with which European firms compete in export markets outside their immediate strategic environment.  

It is within this evolving context that the emergence of new Asian suppliers becomes particularly important. South Korea has emerged as a competitive exporter in artillery, armoured systems, shipbuilding. Turkey has used unmanned systems to build strategic influence well beyond its immediate region. Japan’s entry is especially significant because of the scale and sophistication of its industrial base. Japanese manufacturing capabilities in shipbuilding, electronics, materials engineering, and precision systems have long been globally respected. With the new policy in place, a greater external role for Japanese defence manufacturing has become increasingly plausible. 

For India, this transition presents both opportunity and strategic complexity. India itself is moving from being one of the world’s largest arms importers to becoming an increasingly consequential defence manufacturer and exporter. Emerging technologies like drones, space, artificial intelligence, cyberwarfare are areas where India’s growing capabilities can offset traditional military-industrial disadvantages. Even more important than the numerical growth of exports is the nature of India’s positioning. India’s strategic autonomy is increasingly seen as an asset in the arms export market.   

India possesses geopolitical credibility, growing technological capability, and a thriving defence innovation ecosystem, particularly in emerging technologies, that allows engagement across competing strategic spaces. Whether India can fully realise this opportunity will depend on its ability to deliver quality, reliability, financing, servicing and technological innovation at scale. 

The strategic certainties that governed the international arms market for much of the post-Cold War period are steadily giving way to a more plural and competitive order. The countries that adapt early to this transition will help shape the arms market architecture that follows. India has the possibility of being one of them.

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The author is chairman, UPSC, and former defence secretary. The views are personal