India-France security ties to survive Scorpene setback

Subject

The impact of the recent Scorpene data leak on India's defence sector and security ties with France.

Significance

The recent leak in an Australian newspaper of sensitive data on Scorpene submarines, which are being built by French defence vendor DCNS for the Indian navy, comes at a time of multiple challenges for India's defence industry, and a deteriorating strategic environment in India's neighbourhood.

Impacts

• For the foreseeable future, India's military will face a major shortage of key equipment, especially in its submarine fleet.
• India will struggle to attract significant FDI in defence despite the recent liberalisation of ownership norms.
• The key deterrents will be India's weak intellectual property regime and lack of skilled staff.