This case asks Ajit to choose between two buyers for a single, constrained arms order — a decision that looks like ordinary commercial allocation but is, in substance, a foreign policy and ethical choice made through a sales department. Country B’s offer is more immediately attractive in cash-flow terms, but carries proliferation, human-rights, and diversion risks that Country A’s offer does not.

Facts

• Production constraints allow only one order to be fulfilled between the two interested countries
• Country A: sound technology base, planned R&D collaboration, not in any security alliance, seeks weapons defensively against a troublesome neighbour, wants a large acquisition on long-term loan
• Country B: military spending crowding out human development priorities, allied with a superpower hosting a base there, not an NPT signatory but possesses smaller nuclear weapons and delivery systems, supports guerrilla forces abroad, is simultaneously negotiating arms purchases elsewhere, offers a smaller deal with advance payment
• Internal discussion emphasised economic benefit and the risk of losing Country B’s business to another supplier
• Ajit is aware that due diligence is required at every stage to ensure conformity with national policy and international treaties

Stakeholders

• Country A, a genuine defensive-need buyer with long-term collaborative potential
• Country B, a strategically significant but ethically higher-risk buyer
• MDP and India’s defence production ecosystem, whose economic and R&D interests are affected either way
• India’s broader foreign policy and non-proliferation commitments, which constrain what Ajit can ethically or legally approve
• Third parties potentially affected by Country B’s guerrilla-force support, an indirect but real stakeholder group

(a) Options Available to Ajit, and the Recommended Choice

Option 1 — Accept Country B’s order

• Merits: Immediate advance payment, alliance-linked diplomatic goodwill, access to an economic bloc India is negotiating a free trade agreement with, and avoids losing the deal to a competing supplier
• Demerits: Country B’s support for guerrilla forces abroad raises direct concerns under international norms against arming non-state actors (in the spirit of UNSC Resolution 1540); its non-NPT status combined with existing nuclear capability raises proliferation-adjacent risk; simultaneous negotiations with another supplier suggest weaker long-term exclusivity or loyalty in the relationship

Option 2 — Accept Country A’s order

• Merits: A genuinely defensive, non-aligned buyer with no comparable proliferation or non-state-actor risk; the long-term R&D collaboration serves India’s own future defence technology base, not just a one-time sale; a long-term loan structure supports a sustained bilateral relationship rather than a single transaction
• Demerits: Slower or more complex financing through a long-term loan rather than upfront payment, and forgoes the immediate diplomatic and economic incentives tied to Country B’s alliance and trade bloc membership

Ajit should select Country A. The economic and diplomatic gains from Country B’s order do not offset the serious ethical and strategic risk of enabling a buyer that supports guerrilla forces and sits outside the NPT framework while holding nuclear capability. Country A’s order aligns economic benefit, technological collaboration, and ethical propriety in the same direction, which Country B’s does not.

(b) Balancing Economic and Strategic Interests With Ethical Considerations

• Treat due diligence as a substantive filter, not a formality — India’s obligations under frameworks like the Missile Technology Control Regime and the Wassenaar Arrangement, both of which India is a member of, exist precisely to prevent exports from contributing to proliferation or reaching actors of concern; these are not optional considerations to be weighed against economic gain, but binding constraints on what counts as an acceptable deal in the first place
• Distinguish immediate revenue from long-term strategic value — Country A’s R&D collaboration builds India’s own indigenous defence capability over time, a strategic gain that a one-off, higher-risk sale to Country B does not replicate
• Do not let the threat of losing a sale to a competitor override red-line ethical criteria — the argument that “Country B will simply buy elsewhere” is a reason to accept the diplomatic reality, not a justification for compromising due diligence; India’s restraint does not eliminate the risk globally, but it does keep India’s own export conduct consistent with its non-proliferation and human rights commitments
• Institutionalise end-use monitoring and periodic review for whichever deal proceeds, ensuring that economic and strategic interests are pursued within, not instead of, ethical safeguards, through formal vetting by relevant national security and foreign policy bodies rather than a sales department’s judgement alone

Way Forward

Arms sales sit at a point where commercial logic, strategic interest, and ethical responsibility must all be satisfied together, not traded off against each other. Ajit’s decision should be guided by the principle that economic opportunity is legitimate only within the boundaries India’s international commitments and its own strategic autonomy set — not as a competing consideration to be balanced against them. Choosing Country A demonstrates that a nation’s defence export policy can serve its economy and its principles at the same time, rather than sacrificing one for the other.