India to Locally Manufacture US-Made Combat Drones in Landmark Tech Transfer Deal

India is close to sealing a strategic pact with the US defence technology firm Shield AI for the production and indigenous procurement of its V-BAT combat drones.

The action marks a marked shift from conventional defence procurement methodology, as it entails a highly unusual transfer of cutting-edge technology.

The deal, according to Mint, is part of a $4.5 billion emergency procurement program initiated following Operation Sindoor. The Indian Defence Ministry is said to be in the last stages of talks with Shield AI for deploying enhanced V-BAT drones in the Indian Air Force (IAF).

In addition to the purchase, a local production facility is to be set up through a joint venture with the defence division of JSW Group, JSW Defence.

The first order from the IAF is estimated at $35 million, which falls within the higher limit for emergency defence contracts. But the horizon of this collaboration goes way beyond just procurement. A joint venture of $90 million has already been inked, involving a full transfer of technology (ToT) to JSW. This deal sets the stage for large-scale production, assembly, and testing of the V-BAT drones in Indian territory.

According to the terms of the joint venture, JSW Group will be investing $90 million over two years. Out of this, $65 million will be used in the first year towards establishing a global compliance framework, creating manufacturing infrastructure, and training Indian staff in operating and maintaining the technology being transferred.

This partnership is aimed not just at fulfilling India's indigenous defence requirements but also to establish the nation as a world export center for the V-BAT unmanned aircraft. The platform is presently in use with numerous military units across the world, including United States Marine Expeditionary Units.

The V-BAT unmanned aerial vehicle (UAV) is a fixed-wing, vertical take-off and landing (VTOL) platform designed for long-duration operation. It is maximized for intelligence, surveillance, and reconnaissance (ISR) missions and can fly in complicated and high-threat situations.

The V-BAT assists special operations through to support of infantry and armored divisions, and it is recognized for its patented ducted fan topology, which provides a compact logistical footprint and fast-deployment capabilities.

If this deal is signed, it would mark a significant shift in India's defence policy—from acquiring sophisticated systems to co-developing and indigenising advanced military technologies.