In June 2023, under the Biden administration, the U.S. Department of Defense and India’s Ministry of Defence launched the India-U.S. Defense Acceleration Ecosystem, or INDUS‑X, as part of the broader Initiative on Critical and Emerging Technology. Two months later, in August, a formal DoD factsheet publicly announced the mission: to catalyze partnerships between startups, academia and private capital for the development of artificial intelligence, so-called intelligence, surveillance and reconnaissance platforms and autonomous systems.

However, beneath the glossy presentation, a one-sided dynamic emerged: India leveraged U.S. infrastructure, funding and know-how, while American firms saw little to no parallel opportunity.

In its first year, INDUS‑X underwrote innovation challenges that awarded more than $1.2 million in U.S. taxpayer dollars to Indian startups. The Defense Innovation Unit and India’s iDEX jointly selected firms like Pixxel, Zeus Numerix and OceanComm to receive direct U.S. funding for defense-centric prototypes. As confirmed by the U.S. Department of Defense, “Indian winners were awarded direct U.S. funding for defense prototypes.”

Asymmetrical access: Why U.S. startups are left out

INDUS-X has served not only as a platform for technological collaboration, but as a strategic funnel for U.S. capital and institutional support into India’s defense startup ecosystem. Through a series of targeted initiatives, including investor strategy sessions in New Delhi, university-based workshops at the Indian Institutes of Technology and curated public-private matchmaking events, INDUS-X has helped channel American venture capital and innovation mentorship directly into Indian firms. These activities, facilitated by the U.S. Department of Defense and its innovation arms, are part of a coordinated effort to fast-track India’s role in emerging defense technologies.

Yet, while Indian startups are being actively embedded into the U.S. defense innovation infrastructure, American companies have not been afforded equivalent access to Indian government resources, funding mechanisms or procurement pathways. The disparity is stark.

There is no evidence of American defense startups receiving reciprocal integration into Indian programs such as iDEX, DPEPP or DRDO-backed accelerators, the flow of benefits, investment, exposure and development support remaining decisively one-way.

According to a Reuters report, INDUS-X directly supported seven Indian startups by offering them access to key U.S. defense institutions such as the Defense Innovation Unit, or DIU, and facilitating strategic connections with American defense contractors.

These firms, all privately held and Indian-owned, were elevated through a pipeline of mentorship and opportunity that would be difficult to replicate for any U.S. startup seeking a foothold in India’s restricted defense marketplace.

The most visible outcomes of this strategic imbalance are seen in the rise of three Indian startups: Pixxel, PierSight and Zeus Numerix. Each has transitioned from early-stage ventures into internationally positioned defense contractors, thanks in large part to their direct integration into INDUS-X activities. Pixxel, which specializes in hyperspectral imaging satellites, won a five-year contract with the U.S. National Reconnaissance Office, followed by a NASA agreement to support Earth observation missions. With momentum from these engagements and continued visibility through INDUS-X channels, Pixxel went on to raise over $60 million in funding to expand its satellite constellation and defense service offerings.

These outcomes reflect more than just startup success; they signal a fundamental policy posture that prioritizes the integration of foreign firms into U.S. defense ecosystems while offering no structural path for reciprocal benefit. In doing so, the INDUS-X framework inadvertently positions U.S. defense innovation as a subsidy for a foreign competitor’s strategic industrial growth.

In effect, American taxpayer-funded innovation, capital and infrastructure are being deployed to strengthen competitive Indian firms, with no structural obligations for India to return the favor.

American startups, in contrast, remain sidelined. They have no standing in India’s major defense procurement streams, such as those backed by India’s Defence Research and Development Organisation are shut out of Indian funding platforms, and cannot participate in critical Indian defense supply chains unless subsumed under Indian multinationals. No U.S. firm has received defense-offset considerations or procurement opportunities via India’s Defence Production & Export Promotion Policy.

Moreover, there is no bilateral agreement requiring reciprocal access, no ITAR (International Traffic in Arms Regulations) equivalent audits, no harmonized export-control regime and no enforcement mechanism preventing the re-export or militarization of shared technology by India.

The result is a clear one-way transfer of U.S. innovation into India’s defense industry, with no obligation or mechanism to ensure American firms receive comparable benefits. While U.S. companies must navigate rigorous compliance regimes and face sales restrictions, Indian companies are free to build and export U.S.-enhanced technologies, now in direct competition with American defense suppliers, aligned with India’s long-term strategy of becoming a global defense leader.

India’s global dominance ambitions: A strategic misalignment

India’s deeper strategic agenda complicates its role in U.S. defense partnerships. Far from casual aspirations, India’s vision of global leadership in technology and defense is formally embedded in national doctrine.

India’s Defence Production & Export Promotion Policy (DPEPP) 2020 explicitly aims to transform that nation into a $25 billion defense manufacturing powerhouse, with $5 billion earmarked for exports this year, supported by a sharp pivot toward self-reliance, domestic R&D and foreign market penetration.

In 2021, the Confederation of Indian Industry and Indian think-tank NITI Aayog together unveiled Technology Vision 2047, explicitly envisioning India as a global leader in AI, defense technologies and manufacturing, and launching the country on a path to reshape global industrial and security architectures. That vision has found international voice through CII’s influence at the G20, B20 and World Economic Forum, where it advocates global supply chain realignment under a “new digital order led by Indian innovation.”

India’s aspirations to emerge as a leading global power in defense manufacturing has clearly benefited from the expansion of collaboration from the U.S. and India, seen in increased private sector participation, growing exports and significant foreign direct investments in advanced technologies. India contributes this growth for enabling their global competitiveness against other major defense exporters like the U.S.

Rather than creating a “mutual acceleration ecosystem,” INDUS-X has functioned as a quiet handover, transferring high-value American defense know-how to an unregulated foreign innovation base while U.S. startups are locked out and the U.S. loses its competitiveness – all in a space the U.S. has historically dominated.

Collectively, these initiatives make one thing clear: India does not perceive itself as a collaborative peer, but as a future global power rewriting rules in economics, security and technological governance. Integrating such a nation into core U.S. defense systems, without binding oversight, clear reciprocity or national security safeguards amounts to strategic overreach. While framed as mutual advancement, the current structure of INDUS‑X reflects strategic vulnerability for the U.S.

India’s strategic end-run: From backdoor acquisition to open access

India’s pursuit of U.S. defense and dual-use technology has never been accidental; it has been methodical, persistent and, above all, strategic. As far back as the 1980s, Indian military doctrine openly prioritized the acquisition of civilian technologies with latent military applications. This was not a secret. India’s own policymakers declared space and commercial payloads should always be dual-capable, explicitly framing innovation as a means to military advancement.

Former Indian president and missile program architect Abdul Kalam repeatedly stressed the importance of artificial intelligence, robotics and nanotechnology, not merely for development, but as vital instruments of future warfare.

This backdoor acquisition strategy was not limited to rhetoric. On Sept. 9, 2008, the U.S. Justice Department announced a five-count indictment against Indian national Siddabasappa Suresh and Rajaram Engineering Corporation for illegally supplying India’s government with high-performance testing equipment critical to ballistic missile systems and spacecraft development, technology tightly regulated under U.S. export control law. The items were covertly routed through shell companies and third parties, circumventing licensing requirements meant to safeguard national security.

Despite this clear pattern of circumvention, India has remained outside the bounds of international nonproliferation agreements. It is one of just three nations, including Israel and Pakistan, that has never signed the Nuclear Nonproliferation Treaty. Yet in 2008, the United States granted India an unprecedented exception. Under intense lobbying pressure and in pursuit of “strategic alignment,” the Bush administration overturned decades of U.S. and global policy by approving the U.S.-India nuclear cooperation agreement, giving New Delhi access to American nuclear technology without requiring the full safeguards or disarmament commitments imposed on treaty-bound states.

The outcome was immediate and consequential. India continued developing nuclear weapons outside international inspection. It maintains an arsenal of an estimated 164 plutonium-based warheads and refuses to permit full-scope International Atomic Energy Agency inspections of its facilities. India has never signed the Comprehensive Test Ban Treaty and continues to reject legally binding commitments to halt fissile material production.

The cost of these decisions continues to mount. In May 2025, the U.S. Department of Energy approved Holtec International to transfer sensitive nuclear reactor technology to three Indian entities: Holtec Asia, Tata Consulting Engineers and Larsen & Toubro. The authorization was granted under 10 CFR Part 810, a regulation governing the transfer of nuclear know-how to foreign nations. That this approval came despite India’s unresolved proliferation risks and lack of disarmament transparency is, as one former Pentagon official put it, a case of “policy dressed up as progress.”

The Biden administration’s 2025 guidance easing Missile Technology Control Regime restrictions now allows for expanded exports of long-range missile and space-launch technologies to “trusted partners,” including India. According to Breaking Defense, this shift was justified under the banner of deterring adversaries and boosting U.S. defense exports. But it also opens the door to foreign actors with well-documented histories of diversion and repurposing.

Political capture, willful blindness: A history of theft, threat and subversion

This historical pattern of exploitation has not only gone unaddressed, it has been codified into policy.

What began as selective leniency in the name of diplomacy has now matured into institutional complicity. By extending high-trust privileges to a state that refuses to adhere to basic international nonproliferation norms, the United States has paved a pathway for systemic abuse. The U.S.-India technology partnership, once envisioned as a strategic hedge, has become a liability, one where national security, industrial advantage and the integrity of American innovation are quietly traded for geopolitical optics and corporate appeasement.

What began as a so-called innovation partnership has rapidly become a dangerous channel for uncontrolled technology transfer. Under the INDUS-X framework, Indian firms have been granted access to some of America’s most sensitive defense research and infrastructure ranging from DARPA-aligned R&D to U.S. university test ranges and federally funded laboratories without the legal guardrails normally required to protect national security.

Through the INDUSWERX consortium, American academic institutions like Penn State, Texas A&M and the University of Maryland opened their doors to Indian startups, giving them exposure to dual-use technologies in artificial intelligence, autonomous systems and next-gen sensing. These are not symbolic gestures, they are accelerants. Yet, this access was not governed by traditional safeguards like International Traffic in Arms Regulations, end-use monitoring agreements or export-control compliance. The lack of enforcement mechanisms means that once U.S.-origin innovations are handed over, they can be replicated, commercialized or militarized by Indian entities with no legal consequences.

This arrangement is not happening in a vacuum. India remains on the U.S. Trade Representative’s “Priority Watch List” for chronic intellectual property violations, technology theft and forced localization policies. India has a long and well-documented record of diverting sensitive foreign technologies for military use ranging from missile guidance systems to satellite surveillance components. And yet, despite past sanctions and espionage cases involving Indian defense agencies and shell companies, the U.S. government is now proactively facilitating access.

At its core, INDUS-X is not collaboration, it is capitulation. America is extending defense-grade access and taxpayer-funded innovation to a foreign government that refuses binding transparency, evades nonproliferation norms and has openly weaponized its diaspora and corporate networks to manipulate U.S. policy. This is not a strategic hedge against China; it is the quiet erosion of America’s technological edge and security autonomy enabled by leaders too compromised or complacent to draw the line.

If the United States fails to reverse course, the outcome will not be shared prosperity or mutual deterrence; it will be the outsourcing of America’s future, one critical system at a time. Congress must act now, not with more memoranda, but with investigation, suspension and enforcement before this bilateral subversion is fully inside the gates.

Blindness or sanctioned sabotage?

This is not a story of collaboration gone awry, but is the final chapter in a long play of exploitation disguised as alliance. What began decades ago as selective engagement has metastasized into a full-scale erosion of American sovereignty, carried out not by an enemy at the gates, but by a partner inside the wire. The INDUS-X initiative has handed India the keys to America’s most sensitive defense technologies, research labs, dual-use innovations and taxpayer-funded programs, while asking for nothing in return. There are no export controls. No reciprocal access. No legal enforcement. And no strategic rationale that justifies this level of vulnerability, other than political cowardice or captured leadership.

India has never concealed its ambitions. Its officials say it openly: All innovation must serve national defense. All collaboration must support industrial supremacy. All foreign partnerships must feed domestic dominance. From satellite surveillance to missile guidance to AI warfare, India has converted foreign technology into military advantage and now, under INDUS-X, it has found its clearest, most direct channel yet, funded, facilitated and fast-tracked by the United States government.

This is not accidental; it is orchestrated. It is not innovation sharing; it is industrial surrender. And while Indian firms scale globally with American tools, American startups are locked out of Indian markets, buried under bureaucracy and blocked from basic procurement access.

Americans are subsidizing their competitor and mentoring their replacement. And in so doing, America is inadvertently undermining the very foundation of its own defense-industrial base.

Let it be said clearly: India is not a passive recipient of American generosity, but an aggressive and calculated competitor with a proven record of technology diversion, nuclear opacity, IP theft and economic coercion. It has refused to sign every major nonproliferation treaty, violated export laws and used shell entities to evade restrictions. It sits on the U.S. Trade Representative’s Priority Watch List for intellectual property theft – and yet is being granted unfettered access to next-generation U.S. defense innovation through universities, incubators and federal labs with no strings attached.

And now, through U.S. government initiatives, all of this has been normalized, legitimized and institutionalized. Whether willful blindness or sanctioned sabotage, no serious government and no president committed to protecting American security would allow such a lopsided framework to exist, unless their hand was forced or their knowledge or will were absent. This is the Biden administration’s most dangerous export: not a product, but permission for a foreign rival to hollow out America’s military advantage under the banner of partnership.

Americans must care. Because what’s at stake is not just technology or trade; it’s their national defense, their economic future and their global leadership. Every satellite launched with stolen specs, every drone built on borrowed code, every AI model trained on American innovation but wielded by foreign interests is a threat that the U.S. helped fund. Americans are not deterring their adversaries, but are supplying them. Instead of building resilience, they are outsourcing it.

If Congress fails to act, and if the American people stay silent, then what comes next will not only be betrayal; it will be defeat by design. The U.S. must immediately investigate, defund and unwind INDUS-X. And it must impose binding oversight, restore compliance standards and reassert control over its own innovation systems.

Because if that does not happen, then the next great leap in military power will not be made in America. It will be made with American tools under a foreign flag.