India’s Defence Manufacturing Surge: What Spain’s New Partnership Means for "Make in India"

The recent visit of Spanish Prime Minister Pedro Sánchez to India marks more than just another diplomatic handshake. It underscores a profound shift in global defence alignments, as nations line up to partner with India’s burgeoning defence sector. By inaugurating Tata’s C295 aircraft manufacturing facility and signing military cooperation agreements, Spain has added fresh momentum to India’s "Make in India" mission. Coming just after German Chancellor Olaf Scholz’s visit, Sánchez’s stopover highlights a fascinating dynamic: European nations are now competing to stake their claim in India's fast-growing defence market.

Timing is Everything: A New European Strategy?

The timing of Sánchez’s visit, so soon after Scholz’s, is more than a coincidence. In fact, it may be part of a calculated European push to embed itself in India’s defence ambitions. India’s defence budget for 2023-24, at an all-time high of ₹5.94 lakh crore (around $72.6 billion), reflects the country's drive to become a regional powerhouse and reduce dependence on traditional suppliers. Over $14 billion of that budget is earmarked exclusively for “Make in India” projects.

As India inches toward self-reliance, European countries are beginning to see the value of collaboration over simple exports. Spain’s commitment to jointly manufacture the C295 aircraft shows it understands India’s vision — a vision increasingly marked by a "partners, not patrons" approach in defence. This new strategy isn’t just about defence sales; it’s about investing in India’s long-term capabilities and embedding European influence directly into India’s defence landscape.

The Tata C295 Facility: A Milestone for "Make in India"

At the heart of Sánchez’s visit was the opening of Tata’s C295 aircraft plant in Vadodara, a collaboration with Airbus valued at ₹21,935 crore (approximately $2.66 billion). This isn't just another production line; it’s a groundbreaking move for India's private sector in defence manufacturing. Capable of producing 40 of the 56 C295 tactical transport aircraft for the Indian Air Force, the facility will replace the decades-old Avro-748 fleet with modern aircraft that can carry 71 soldiers or 50 paratroopers. This is exactly the kind of strategic capability India needs as it faces multiple security challenges.

This project isn’t just about replacing outdated equipment. It’s about creating a sustainable defence ecosystem in India, with Airbus pledging to invest 30% of the contract value back into India’s defence sector through offsets. Around 125 suppliers across India are involved, creating a robust supply chain and generating over 15,000 direct and indirect jobs. For India, the C295 project is a case study of how to turn foreign collaborations into powerful domestic assets.

A Competitive Landscape: Europe Scrambles for a Piece of "Make in India"

India’s defence market has become a competitive ground for European powers, and Spain and Germany are just the latest players in a crowded field. France has long been a close partner, with Dassault Aviation’s Rafale jets forming the backbone of India’s air superiority. Now, Dassault is exploring additional opportunities for local production, and France’s Naval Group is eager to partner with India on submarines. These ventures underscore France’s commitment to deeper, long-term collaboration — and it doesn’t stop there.

Italy, too, has thrown its hat in the ring, eyeing India’s shipbuilding sector and specialised fields like anti-submarine warfare. Meanwhile, Germany has pushed hard to close a multi-billion-dollar deal for advanced submarines. Europe’s appetite to work with India is about more than just securing new markets; it’s about ensuring they stay relevant as India shifts away from a historically dominant Russian defence supply chain, now down to 49% of India’s defence imports.

These European nations are willing to go beyond transactional deals, offering technology transfer and localised manufacturing to meet India's stringent demands for indigenisation. And they’re wise to do so — by 2025, India aims to produce ₹1.75 lakh crore (about $21.4 billion) worth of defence equipment domestically. This competitive drive from Europe isn’t just beneficial for India’s economy; it’s helping India to stand on its own feet militarily, which could be a game-changer in the Indo-Pacific’s security architecture.

India’s Self-Reliance Ambitions: A Geopolitical Signal

As India moves closer to its ambitious goal of reducing imports by 30% by 2025, partnerships like the C295 project are symbolic of a broader message: India wants to be a self-sustaining defence player in its own right. For European nations, aligning with India's defence production isn’t just about strengthening bilateral ties; it’s a way to carve out a strategic foothold in Asia.

This is a remarkable shift. Just a decade ago, India’s defence landscape was dominated by foreign suppliers, with Russia taking the lion’s share. But now, India has leveraged its vast market to bring in partners on its own terms, using projects like the Tata-Airbus collaboration to bolster its domestic capabilities. Europe’s enthusiastic response — marked by high-level visits, aggressive deal-making, and technology sharing — is proof that the world is taking notice of India’s rising self-reliance.

India as the New Destination for Defence Innovation

Sánchez’s visit signals more than just Spain’s interest in the Indian defence market. It highlights India’s transformation from a passive buyer of foreign arms into an active collaborator in defence manufacturing. The C295 aircraft project and the surrounding bilateral agreements underscore the significance of the "Make in India" initiative, which has become not just a policy but a powerful geopolitical tool. The stakes are high, and the competition is fierce, as Europe’s major powers race to secure their place in this new era of Indian defence indigenisation.

As India opens its doors to collaborative production, it’s setting a clear example of how emerging powers can assert themselves on the global stage. Spain’s new partnership is a testament to India’s evolving role — one where it isn’t just a consumer of security but a producer, a partner, and, increasingly, a regional powerhouse. For Europe, aligning with India isn’t just smart business; it’s a strategic move that may reshape the Indo-Pacific’s future. The question now is not if, but how far India will go in becoming the next global defence manufacturing hub.