India’s AI Dream: How The U.S. Pentagon’s $11 Billion AI & Space Budget Impacts India’s Defence Strategy

By Lt. Gen. Vinod G. Khandare (r), Wg Cdr Satyam Kushwaha (r) & Dr. Kriti Singh

In its recently unveiled Science and Technology (S&T) budget for the fiscal year 2025, the U.S. Department of Defense (DoD) has allocated a staggering 65% of its funding to Artificial Intelligence (AI), space technology, and integrated sensing systems. This decision signals an unequivocal prioritization of cutting-edge technology, with $4.9 billion dedicated to AI, $4.3 billion for space technology, and $1.9 billion for integrated sensing (U.S. Department of Defense, 2024).

It is also pertinent to note that in the strategic circles of the USA, there is a major concern of China- Russia combined targeting the US-led West and a realization that China has achieved an edge over the USA in modern-day warfare methodologies, especially in the asymmetrical domain, AI and use of Big Data analysis combined capability achieved by China apparently has put it ahead of the USA. This article examines the broader implicit implications of this strategic shift for India, highlighting what is explicitly stated, what remains within the “gray zone,” and how India can and should proactively safeguard its national interests.

1.    The Pentagon’s Focus: Explicit Priorities:

The DoD highlights three critical areas of investment:

1. Smart Satellites and Operations: Systems capable of autonomous functioning without human intervention, filtering critical data for strategic use and optimizing operational efficiency (Ray & Kumar, 2023).
2. Advanced Detection Systems: Satellites equipped to identify threats in real-time and network systems to analyze potential dangers collaboratively.
3. Rapid Response Technologies: Hardware and software designed for rapid deployment, modularity, and adaptability to emerging challenges (Singh & Patel, 2024).

This strategic emphasis reflects the Pentagon’s awakening to the shift in technological equilibrium and the urgency to generate and deploy operational solutions in response to the growing threat environment in space and cyber domains. The decision to move funding beyond basic research (approx 3.4% reduction for basic research from 2024 allocations) underlines the urgency of this revised approach (Federal News Network, 2024).

2.    What Lies in the Gray Zone?

While the Pentagon’s priorities are transparent, certain elements warrant closer scrutiny:

2.1 Geopolitical Context: The U.S.’ urgency stems from China’s political stability, leadership continuity, significant economic growth and specifically rapid advancements in space technology, including anti-satellite (ASAT) weapons and reusable spacecraft. Similarly, Russia’s resilience and no dent in space capabilities, despite sanctions, continue to pose significant challenges. These developments underscore the U.S.’s strategic focus on the need to maintain its supremacy in space (Kania, 2023). It is important to note the quick thinking and equally quick action to address the concerns. There is no lackadaisical attitude of ‘Wait and Watch’ which is normally the approach in Democracies.

                   2.2 Dual-Use Technology: Many of these desired technologies have civilian applications, such as autonomous vehicle navigation and disaster response systems, which could impact global tech ecosystems and competitiveness (Ray & Kumar, 2023). Civil-military fusion is the only way forward to manage commercial challenges and also to optimize national efforts and expenditures.

                   2.3 Collaboration: The lack of explicit mention of technology sharing with allies or partners such as those within the North Atlantic Treaty Organisation (NATO) or in the Quad (the USA, Australia, Japan, and India), leaves room for speculation about technology discovery efforts, technology sharing dynamics and geopolitical technology alignments.

3.    Implications for India

India, as an emerging space power, a member of the Quad, a voice for the Global South, faces a mixed bag of opportunities and challenges arising from this U.S. pivot.

3.1 Technological Gap: The accelerated advancements in AI and space technologies by the U.S. and its adversaries highlight the need and urgency to bridge the critical gap in India’s capabilities. While the Indian Space Research Organisation (ISRO) has achieved remarkable strategic high-profile milestones, such as the Chandrayaan-3 mission, the focus must now shift to leveraging dual-use technologies for defence applications (ISRO, 2023; Singh & Patel, 2024) and multiple sectors which would contribute to strengthening India’s Comprehensive National Power (CNP) and ensure Comprehensive National Security (CNS).

3.2 Strategic Dependencies: India’s defence modernization plans rely significantly on imports and expertise from the U.S. and other Western partners. This dependency could impinge on India’s strategic autonomy, especially in the face of shifting global alignments as the current Global Order transits to the Global Reorder of power dynamics. Risks of conflicts and engineering of unrest in our part of the world is an agenda driven by the Deep States of SuperPowers. Therefore, India has an urgency to get technologically and economically self-reliant at the earliest and capability-capacity enhancement as the common national focus.

3.3 Challenges and Opportunities in Space and Cyber Security: The emphasis on the integration of AI and autonomous systems in space raises concerns for India’s Space sector. Potential disruptions – manmade or engineered; whether through cyberattacks or kinetic operations; by identified or potential adversaries could adversely impact India’s Intelligence, Surveillance, and Reconnaissance (ISR) as well as communication and navigation infrastructure (Kania, 2023). Challenges faced by relatively nascent space-faring nations are related to economic challenges, technological deficit, human resource poaching (brain drain) and the BIG BROTHER ATTITUDE of superpowers which very often are related to technology denials, cash or investment crunch and Superpower leveraging the threat of imposed unilateral sanctions on non-compliant nations (India has been subjected to superpower blackmailing more than once).

4.    Safeguarding India’s Interests

To mitigate these challenges and leverage emerging opportunities, India must adopt a multi-pronged approach:

4.1 Indigenous Technological Development:

Strengthen collaborations between ISRO, Defence Research and            Development  Organisation   (DRDO),         and      private enterprises under the ‘Make in India’ initiative to design, develop and produce autonomous satellites and rapid-launch capabilities. Retrieval of launch vehicles is already on display in the West. Concurrent Research and Development of technologies and products must become the norm with some inherent failure acceptance, funds provisioning and tax benefits in nascent sectors.

1. Accelerate programs like Gaganyaan and Polar Satellite Launch Vehicles (PSLV) advancements for security applications (ISRO, 2023). Satellite Launch on-demand capability using platforms from Air, Ground, Water and Underwater should be prioritized in view of multiple adversaries colluding to fragment India.

4.2   AI Integration in Defence and beyond a single Ministry:

1. Allocate increased funding and dedicated effort for AI-driven autonomous systems and battlefield analytics, ensuring integration across all branches of the armed forces and beyond the military to seek a comprehensive approach.
2. Establish AI-centric research hubs under the National Mission on AI to fast-track innovations (Federal News Network, 2024; Ray & Kumar, 2023).

   4.3 Global Collaborations:

1. Generate and leverage the Quad’s potential for technology sharing and joint exercises in Space Domain Awareness (SDA).
2. Engage with the U.S. through the Initiative on Critical and Emerging Technologies (iCET) to co-develop key technologies (U.S. Department of Defense, 2024).

4.4   Cyber and Space Resilience:

1. Develop cybersecurity frameworks, talent, processes and culture to safeguard India’s satellite networks from potential adversarial disruptions.
2. Introduce redundancy in satellite constellations, to mitigate risks from ASAT weapons (Kania, 2023). Redundancy in adequately skilled Human resources to cope with asset losses during war, during peace and during the critical short of conflict period also needs attention and action.

4.5   Regulatory Diplomacy:

1. Advocate for international norms and regulations on the militarization of space, using platforms like the United Nations (UN) and G20 to emphasize peaceful uses of outer space.
2. Seek positions of global prominence to be at apex level positions, in crucial meetings and position India in decision-making for the world community.

Conclusion

The Pentagon’s prioritization of AI and space underscores a broader global shift in defence and technology paradigms. For India, this transition presents both a challenge and an opportunity. As the U.S. accelerates its advancements, India must ensure it is not left behind by rapidly scaling its investments in indigenous Deep-Tech research and deployments. An integrated and synergized approach to building Space and AI capabilities along with Quantum as well as Cyber would accrue long-term strategic dividends. Fostering strategic collaborations in these sectors could also be a key thrust area.

Think tanks, Foundations, specific Start-Ups, academia and genuine domain experts should play a pivotal role in this regard. By generating and providing policy recommendations, facilitating international collaborations, and conducting in-depth research on dual-use technologies, such organizations can bridge gaps in India’s strategic research, planning and operational preparedness (readiness). Furthermore, these entities can serve as knowledge hubs, providing policymakers with insights to address the complexities of global technology governance, deep-tech advancements, and defence strategies.

Ultimately, India’s ability to thrive in this evolving landscape will depend on its time-sensitive agility in decision-making, strength in technological innovation, ease of doing business (processes), availability of funding from within India, mandating the adoption of new technologies like AI and/ with Quantum, and commitment to maintaining strategic autonomy. By aligning domestic advancements with global trends and leveraging expert guidance, India can emerge as a key player in the new-age geopolitics of AI and space technologies.

Disclaimer

The views expressed in this article are personal to the authors and do not necessarily reflect the official position of the authors or any affiliated organizations. The data and insights presented are derived from secondary. Sources, domain expertise and authors’ hands-on experience in identifying and addressing critical complexities. AI tools for content creation have been used. Readers are advised to independently verify the information before forming any conclusions or taking action.

Lt. Gen. VG Khandare (r) PVSM, AVSM, SM is the Principal Adviser to the Ministry of Defence, India & Editorial Board Member of IADB.

Wing Commander Satyam Kushwaha (r), a third-generation military officer and veteran fighter pilot, brings 27+ years of expertise in space, geospatial, military aviation, and national security. He is the Founding Director of the Indian Space Association (ISpA) and the founder of Scytale Alpha Pvt Ltd, specializing in quantum-secure communications. He is CEO of Chakra Dialogues Foundation.

Dr. Kriti Singh, Honorary Advisor at Chakra Dialogues Foundation, is a renowned academic, author, and researcher specializing in international relations, communication, defence studies, media-military relations, and law.