By: Naveenika Chauhan
A new era of strategic realignment and tech sovereignty may have just started in a world reshaped by shifting alliances, weaponized trade, and a deepening global arms race, as India makes a decisive move, not just on the battlefield, but in the boardrooms of defense tech.
As the West scrambles to ramp up military-industrial complexes in response to rising geopolitical threats, India’s focus is different: strategic self-reliance. And the ₹61,000 crore fighter jet engine pact with France is undoubtedly more than a defense contract, it’s a strong declaration. A declaration that India will no longer remain a passive buyer in the global arms bazaar but intends to co-create, co-own, and ultimately, control the heart of its future aerial firepower.
The Indian Ministry of Defence has formally recommended a collaboration with France to co-develop next-generation fighter jet engines, a landmark breakthrough in the country’s long, often frustrating quest for engine sovereignty. After months of detailed consultations, stakeholder inputs, and a rigorous technical review process, France’s proposal was deemed more aligned with India’s long-term vision, edging out a competing offer from the UK’s Rolls Royce.
At the center of the ₹61,000 crore collaboration is the joint development of a 120kN thrust class engine that will power the Advanced Medium Combat Aircraft (AMCA), India’s ambitious stealth fighter program. The proposal by French engine maker Safran includes a full transfer of technology (ToT), matching AMCA’s timeline, a move seen as rare and geopolitically significant, given the tight global control over core engine technologies.
More than a commercial agreement, it’s a critical leap in India’s attempt to build an indigenous defense ecosystem. Defence Minister Rajnath Singh, a strong advocate of homegrown defense capabilities, has championed the engine development program as a cornerstone of India’s aerospace independence. The decision to collaborate with France is seen as strategic, both technically and diplomatically.
That said, the road to engine independence is far from over. The first fleet of AMCAs may still need to rely on US-made GE 414 engines, even as the indigenous engine evolves in parallel. With an expected demand of over 250 next-gen engines over the next decade, India is positioning itself for the long game, learning, manufacturing, and eventually mastering the one component that defines the true capability of a fighter aircraft: its powerplant.
Historically, India has struggled in this domain. The Kaveri engine project, despite years of R&D, failed to meet the required thrust levels. While a derivative of Kaveri is being repurposed for unmanned aerial platforms, it’s a reminder of how elusive fighter-grade engine technology remains guarded by a handful of nations.
Currently, every fighter aircraft in the Indian Air Force runs on a foreign engine — from the Sukhoi to the Rafale to the Tejas Mk1. Engine imports also make up a significant chunk of lifecycle costs, including maintenance, repair, and upgrades. With India also negotiating a separate technology transfer deal with the US for the GE414 INS6 engine (to power Tejas Mk2), including advanced features like hot-end coatings, single-crystal blades, and laser drilling, the geopolitical puzzle becomes even more layered.
But in choosing France for the AMCA engine, India may be signaling something beyond engineering a subtle but powerful recalibration of its global defense alignments.
Europe’s Military Boom, When Business Finds Opportunity in War
While India is investing in defense to break free from foreign dependence, Europe is moving in a very different direction: it’s turning war into an economic engine. As regional tensions escalate and NATO sets ambitious defense spending targets, a new breed of military-industrial capitalism is rising across the continent. Civilian companies are rebranding themselves as defense contractors, tech firms are building weapons-adjacent infrastructure, and the stock market is responding with unambiguous enthusiasm.
The numbers paint a telling picture. The Stoxx Europe Aerospace and Defense Index has surged over 50% since the beginning of the year, a meteoric rise driven by a collective European push to rearm. The European Commission’s €2 trillion budget proposal, with nearly €800 billion earmarked for defense, signals that the continent has fully embraced what Brussels is now openly calling its “era of rearmament.”
Hence, more than just weapons it signals transforming entire industries.
French telecom giant Orange, through its enterprise arm Orange Business, has launched a dedicated defense and homeland security division. Its goal is to merge civilian infrastructure with military needs. From sovereign cloud hosting to hybrid civilian-military networks and cybersecurity for emergency response systems, Orange is mobilizing its deep tech expertise to profit from defense sector expansion, not only in France, but across Europe and even for clients like NATO.
“We have a historically established activity in the sector,” said Nassima Auvray, who now heads Orange’s new defense division, “but until now it was fragmented.” Her mandate – consolidate capabilities across AI, cloud, and digital infrastructure to capture a larger slice of the European defense budget.
And Orange is not alone.
Swedish tech company Einride, best known for its autonomous electric freight trucks, is also entering the defense domain. Its latest AI-driven software, originally developed for optimizing logistics is now being deployed in hazardous, high-risk environments as part of confidential defense contracts. While the company remains tight-lipped on specifics, it has openly acknowledged that its autonomous vehicle systems are now being adapted for military use.
This blurring of lines between civil innovation and military application is not coincidental. It’s systemic.
As governments unlock huge defense budgets, private companies are repositioning themselves not out of necessity, but out of opportunity. From logistics to telecom to cloud computing, European firms are racing to become indispensable to the continent’s new war economy.
It’s a sharp contrast to India’s engine pact with France. India is not looking to militarize its economy but to insulate itself from geopolitical vulnerability. Europe, on the other hand, is embracing defense as a growth sector — a new industrial policy disguised as security preparedness.
At its core, this divergence reflects differing worldviews. India seeks sovereignty through creation. Europe seeks profit through conflict adaptation.
The West’s commercial reorientation toward defense is certainly not without precedent but rarely has it been this fast, this broad, and this lucrative.
The New Arsenal of Democracy?
Also expanding its arsenal in the rapidly escalating defense race is Fincantieri, the Italian cruise ship and mega-yacht builder that’s no stranger to steel and sovereignty. Long embedded in military contracts, the company has now sealed a €700-million pact to construct two multipurpose combat ships for the Italian Navy, in collaboration with fellow Italian defense behemoth Leonardo.
Fincantieri’s CEO Pierroberto Folgiero made no bones about the strategic pivot. Speaking to CNBC, he underscored that the company’s defense vertical is no longer a side project it’s becoming central to its core business. When asked whether NATO’s ambitious new 5% of GDP defense target would catalyze growth, his answer was clear: “Absolutely, yes.”
Folgiero pointed to a “distributed increase in demand for naval ships” across Europe and beyond not just as a reaction to geopolitical tensions, but as a restructuring of the global security order. The message to the West – is rebuilding its defense industrial base and this time, it’s looking long-term.
This bullish sentiment isn’t isolated to traditional players. Enter VRAI Simulation, a Dublin-based virtual reality training platform designed for high-risk sectors like aerospace and defense. CEO Pat O’Connor sees Ireland long a tech darling but militarily neutral as Europe’s stealth wildcard. “Ireland’s historical underinvestment in defense ironically presents us with an opportunity,” he argued. With a digital-first economy and a talent-rich ecosystem, Ireland could leapfrog legacy systems and position itself as a next-gen defense tech leader.
In a way, the continent’s defense realignment mirrors its economic ethos: modern, modular, and multinational. And it’s not just industrials getting bullish. Big money is circling too. Deutsche Bank CEO Christian Sewing recently admitted to a strategic shift stepping up allocations to defense after years of “under investing.” The war economy isn’t just an abstract concept anymore; it’s an asset class.
Even Temasek, Singapore’s heavyweight state investment fund, is eyeing opportunities in Europe’s militarized pivot. Chief Investment Officer Rohit Sipahimalani revealed that defense is now on their radar: “It’s clearly an area where there’s going to be a lot of capital spent.”
Whether it’s state contracts, shipyards, or simulations or sovereign funds and Silicon Valley-style innovation Europe seems to be rearming not just for battle, but for business. And for the first time in decades, war is becoming investable.
The Last Bit
In the face of rising global instability, both India and Europe are rewriting their defense playbooks but with fundamentally different intentions. One is engineering autonomy; the other is engineering advantage.
India’s ₹61,000 crore engine pact with France is a conscious pivot away from dependency, an investment not in war but in capability. It is about closing a technology gap that has, for decades, limited India’s strategic choices. The country is clearly building the ability to say “no” when needed, and “yes” on its own terms.
Europe, by contrast, is embracing defense not only as a matter of security, but as a source of industrial revival. From telecom giants to AI logistics firms to simulation startups, the continent is transforming its civilian tech base into a defense engine and in doing so, reviving a 21st-century version of its old military-industrial complex. The war economy is no longer a relic of the Cold War; it’s a growth vertical on corporate strategy decks and investment memos.
These two approaches – one defensive, the other opportunistic – speak volumes about where each region sees itself in the global order. For India, sovereignty is the end goal. For Europe, defense is the new business model.
But whether born of necessity or profit, both paths reveal a world where geopolitics no longer lives solely in parliaments or war rooms it is increasingly shaped in boardrooms, R&D labs, and bilateral tech pacts. As the engine pact with France shows, sovereignty today isn’t just about borders. It’s about blueprints.
And India, at long last, is claiming its place on the drawing board.
