India eyes a first-of-its-kind defence deal post Operation Sindoor
India is seeking a first-of-its-kind defence sourcing deal, with the Centre evaluating a cutting-edge combat drone to be first imported and subsequently localized in India through the JSW Group.
As part of the $4.5-billion emergency procurement plan that the ministry of defence has opened to the Indian Air Force, Army and Navy following Operation Sindoor, US defence supplier Shield AI is currently in talks with the Indian Air Force to supply its V-Bat combat drones.
The initial deal is set to be worth $35 million, which is the upper cap for any singular contract being signed under the emergency procurement plan.
Following the deal, a $90-million joint venture transfer-of-technology contract between Shield AI and JSW Defence is expected to indigenize the V-Bat drones, which could later make for a larger contract from the Air Force in the long run, three people with direct knowledge of the matter told Mint.
“The early deals are meant just to give India early access to fill in gaps in national defence, through imports. Going forward, successful execution of the emergency procurement deals could lead to longer-term contracts,” said a senior official requesting anonymity since the contracts are currently under evaluation.
Straight-up, Shield AI’s V-Bat emergency contract, if approved, will be worth up to $35 million. This adds on top of its $90-million localization contract with JSW Defence, a senior executive close to the developments said.
The imported drones, once approved, can be sourced as early as the first half of the 2026 calendar year. Subsequently, locally-manufactured V-Bat drones could start being produced from JSW Defence’s indigenous assembly line as early as the end of 2027 itself.
The ministry of defence and Shield AI did not reply to emails sent last week.
India’s warfighting capabilities
Shield AI is not the only private vendor being evaluated, a second official aware of the matter added that as part of the discussions. Other private defence contractors currently in talks include vendors from Israel, as well as Ukraine.
“Shield’s proposition of localizing the drone is unique in the sense that so far, no other private contractor has as yet proposed such a long-term plan to indigenize their technology in India,” the official said.
The Indian Air Force, Army and Navy will gain greater access to sophisticated global defence technology under an emergency procurement package cumulatively worth about $4.5 billion, which the Ministry of Defence rolled out shortly after Operation Sindoor.
“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,” said the second of the three officials.
“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,” this official said.
Industry stakeholders said that such deals are of tantamount importance given the current geopolitical dynamics.
“India is one of the world’s largest economies, and as we saw as part of the recent Operation Sindoor skirmish, non-contact warfare is a crucial aspect of future national security strategies,” said Sameer Patil, director of centre for security, strategy and technology at global think-tank Observer Research Foundation.
“India’s emergency procurement push involves both loitering munition and precision stand-off capabilities, which would expand India’s conventional warfighting capabilities without having to climb the nuclear escalation ladder,” Patil said. “In case of major previous threats to national security such as in 2008 and 2016, the availability of cutting-edge drones and precision munitions is what India lacked.”
Sharper eye in the sky
India is also seeking access to uninterrupted satellite surveillance technologies as part of the same emergency procurement programme. While Indian firms are in process of building indigenous versions of this technology, temporary sourcing could come from external suppliers such as vendors from the US, France and Israel, the first official added.
The uninterrupted space surveillance technology India is seeking will require ultra-high-resolution satellites as well as low-latency transmissions for round-the-clock operations.
“India’s current surveillance satellite infrastructure is not sufficient to provide continuous surveillance because of the limited numbers. The gap is presently filled by taking imagery from foreign commercial companies,” said Anil Kumar Bhatt, director general of space industry body, Indian Space Association.
“India’s Space-Based Surveillance-3 (SBS-3) programme, under the Centre, is currently being implemented to bring such capabilities through 52 satellites, of which 31 will be supplied by the private sector,” he added.
For deeper capability building in defence technology, however, India needs to invest actively in research and development. The current emergency procurement contracts are not expected to come with indigenisation and technology transfer agreements.
The current spree of emergency procurement “underlines India’s need to invest in defence-led research and development, including incentivizing the private sector to spend more,” said Patil.
Incidentally, in the 2025-26 Union Budget, the government increased the allocation to India’s Defence Research and Development Organisation (DRDO) by 12% to $3.1 billion.
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