Europe is witnessing a historic surge in defense technology investments driven by escalating geopolitical tensions, notably the war in Ukraine. Venture capital funding in this sector is expected to increase 300% by the end of 2025 compared to 2019. Key initiatives such as the European Union’s ReArm Europe Plan, unveiled in March 2025, aim to mobilize over €800 billion for defense innovation, including a €150 billion loan instrument (SAFE) for joint procurement and enhanced European Investment Bank support. Major European countries, including the UK, Germany, and France, are significantly boosting their military budgets, with the EU’s overall defense spending projected to reach €381 billion in 2025. These measures reflect a strategic push for military self-sufficiency, reducing reliance on external suppliers, especially the US, and focusing on advanced technologies like AI, drones, and autonomous systems. This substantial investment and modernization effort open avenues for global cooperation and innovation-driven growth. For Indian defense firms, particularly small and midcap companies with a presence in Europe, this presents opportunities to supply components and subsystems, leveraging India’s cost advantages and skilled workforce amid Europe’s drive to strengthen its defense industrial base. This evolving European strategy marks a significant shift towards longer-term security resilience.