India is pursuing a groundbreaking defence sourcing strategy that could reshape its military capabilities and industrial landscape. At the heart of this initiative is a potential $35-million deal with US-based Shield AI to supply V-Bat combat drones to the Indian Air Force, part of a broader $4.5-billion emergency procurement plan following Operation Sindoor. This move is not just about filling immediate gaps in India’s defence arsenal but also about laying the foundation for long-term technological self-reliance.
The proposed agreement with Shield AI is unique in its structure. If approved, the initial import of V-Bat drones would be followed by a $90-million joint venture with JSW Defence to localise production. This transfer-of-technology deal could pave the way for larger, long-term contracts with the Indian Air Force, according to sources familiar with the negotiations. The first imported drones could be delivered as early as the first half of 2026, with locally assembled versions potentially rolling out by the end of 2027.
“The early deals are meant just to give India early access to fill in gaps in national defence, through imports,” said a senior official involved in the discussions. “Going forward, successful execution of the emergency procurement deals could lead to longer-term contracts.”
This approach aligns with India’s broader strategy of balancing immediate operational needs with long-term industrial goals. The emergency procurement plan, which includes proposals from other private vendors such as Israeli and Ukrainian suppliers, underscores the urgency of modernising India’s military capabilities. “Shield’s proposition of localising the drone is unique in the sense that so far, no other private contractor has as yet proposed such a long-term plan to indigenise their technology in India,” said a second official.
The push for advanced defence technology is driven by geopolitical realities. “The most sophisticated technologies are right now not within the capabilities of Indian manufacturers, which necessitates us to procure cutting-edge weaponry from outside of India,” the official explained. “For the most part, the decisions were also sparked by dynamics among India’s geographical neighbours and their internal collaborations, urging the ministry of defence to expedite India’s access to contactless warfare infrastructure.”
Beyond drones, India is also seeking access to uninterrupted satellite surveillance technologies as part of the emergency procurement programme. While domestic firms are developing indigenous solutions, temporary sourcing from international suppliers—such as those from the US, France, and Israel—may be necessary to bridge the gap. The Space-Based Surveillance-3 (SBS-3) programme, which aims to deploy 52 satellites, including 31 from the private sector, highlights India’s commitment to enhancing its surveillance capabilities.
However, the current focus on emergency procurement also raises questions about India’s long-term defence innovation strategy. “The current spree of emergency procurement underlines India’s need to invest in defence-led research and development, including incentivising the private sector to spend more,” said Sameer Patil, director of the Centre for Security, Strategy and Technology at the Observer Research Foundation. The recent 12% increase in the budget for the Defence Research and Development Organisation (DRDO) is a step in the right direction, but sustained investment will be crucial to ensure that India can eventually produce the most advanced defence technologies domestically.
This initiative could set a precedent for future defence collaborations, blending immediate operational needs with strategic industrial goals. If successful, it may inspire similar partnerships, fostering a more resilient and self-sufficient defence ecosystem in India.
