India's Domestic Drone Manufacturing and Defence Procurement Reforms

Introduction

India's proposed USD 2 billion investment in indigenously manufactured drones marks a significant milestone in defence modernisation and the promotion of Aatmanirbhar Bharat in the defence sector. Beyond strengthening indigenous manufacturing, the initiative reflects a broader transformation in military strategy, shifting from reliance on high-cost platforms such as fighter aircraft and tanks towards low-cost, expendable, and technologically adaptable unmanned systems. However, realising the full benefits of this investment requires comprehensive reforms in India's defence procurement framework, which was originally designed for conventional military platforms with long service lives.

Changing Nature of Modern Warfare

Rise of Cost-Effective Drone Warfare

• Recent conflicts have demonstrated that micro drones, nano drones, and other low-cost unmanned aerial systems (UAS) have become indispensable components of modern warfare.

• Countries such as Ukraine, Russia, and Iran have successfully employed large numbers of inexpensive drones for reconnaissance, surveillance, precision strikes, and electronic warfare.

• The greatest advantage of drones lies in their highly favourable cost-benefit ratio. In many situations, the cost of intercepting a drone exceeds the cost of manufacturing it, making mass deployment both economically and strategically advantageous.

• Consequently, military superiority increasingly depends upon the ability to deploy large numbers of affordable and adaptable systems rather than relying exclusively on a limited fleet of expensive military assets.

Growing Importance of Attritable Systems

Modern battlefields are witnessing a shift from preserving every military platform to accepting the planned loss of attritable systems—low-cost assets that can be rapidly replaced without significantly affecting operational capability.

This emerging doctrine prioritises quantity, adaptability, and rapid replacement, making attritable drones a central feature of contemporary military strategy.

Innovation Through Civil-Military Collaboration

Role of Civilian Technologies

Much of the innovation in drone technology originates in the civilian sector. Commercial drones can be modified for military purposes at relatively low cost, enabling armed forces to adopt new technologies rapidly.

Ukraine's extensive use of First-Person View (FPV) drones equipped with explosive payloads illustrates how commercially available technologies can be transformed into highly effective military systems. Such developments increasingly blur the distinction between civilian innovation and military applications.

Importance of Research and Development Ecosystems

The remarkable growth of China's drone industry demonstrates the importance of close collaboration among industry, academic institutions, and the armed forces.

A strong Research and Development (R&D) ecosystem accelerates technological innovation, shortens product development cycles, and enables manufacturers to respond quickly to evolving operational requirements.

Challenges in Tactical Drone Procurement

Rapid Technological Obsolescence

Unlike conventional military platforms that remain operational for several decades, tactical drones become obsolete within relatively short periods because of rapid advances in electronic warfare (EW), signal interception, and jamming technologies.

Adversaries continually develop countermeasures, requiring drone systems to undergo frequent upgrades and modifications. For instance, during the Russia–Ukraine conflict, the replacement of conventional radio communication with fibre-optic control systems demonstrated how quickly battlefield technologies evolve.

Limitations of Traditional Procurement Models

India's conventional procurement framework is primarily transaction-based, assuming that military capability can be acquired through one-time purchases.

While this approach is suitable for fighter aircraft, warships, and armoured vehicles, it is inadequate for technologies such as drones that require continuous software updates, hardware improvements, and rapid technological adaptation throughout their operational life.

India's Existing Procurement Framework

Positive Reforms

India has already introduced several reforms to improve procurement flexibility. The Defence Acquisition Procedure (DAP) permits procurement of Commercial-Off-The-Shelf (COTS) technologies, while the Defence Procurement Manual (DPM) provides greater financial flexibility for repairs, maintenance, and upgrades.

These reforms acknowledge the growing importance of technological modernisation and represent important steps towards building a more responsive procurement system.

Remaining Gaps

Despite these improvements, India's procurement system continues to focus predominantly on the purchase of products rather than the maintenance of long-term capabilities.

The present framework remains largely transactional, with limited emphasis on continuous collaboration between the armed forces and defence manufacturers.

Towards a Partnership-Based Procurement Model

Managed Service Contracts

A more effective procurement strategy would involve establishing long-term managed service contracts between the armed forces and drone manufacturers.

Such arrangements would provide continuous maintenance, regular software and hardware upgrades, assured logistics support, and enhanced surge production capacity during emergencies or armed conflicts.

Benefits of Long-Term Strategic Partnerships

Long-term partnerships would provide demand predictability for domestic manufacturers while ensuring sustained operational readiness for the armed forces.

Continuous collaboration between industry and the military would facilitate rapid technological upgrades, improve innovation, strengthen indigenous manufacturing capabilities, and enable faster responses to changing battlefield conditions.

Significance for India

India's investment in domestic drone manufacturing supports the objectives of Aatmanirbhar Bharat, strengthens the indigenous defence industrial base, reduces dependence on imports, and enhances national security.

It also creates opportunities for private sector participation, start-up innovation, and dual-use technologies, thereby contributing to employment generation, technological advancement, and defence exports.

Way Forward

• India must complement increased investment in drone manufacturing with comprehensive reforms in defence procurement.The focus should shift from one-time acquisitions to capability-based procurement, supported by continuous technological upgrades, strong industry-academia-military collaboration, enhanced R&D investment, and simplified procurement procedures.

• Building a robust ecosystem for artificial intelligence, autonomous systems, electronic warfare, and advanced drone technologies will enable India to remain competitive in future warfare.

Conclusion

India's USD 2 billion investment in indigenous drone production reflects a clear understanding of the rapidly changing character of modern warfare. However, acquiring drones alone is insufficient to ensure long-term military effectiveness. Sustainable defence capability requires procurement systems that promote continuous innovation, technological adaptability, and strategic partnerships. By transitioning from traditional transaction-based procurement to a partnership-driven model, India can develop a resilient defence ecosystem capable of meeting the evolving demands of future conflicts while strengthening its position as a global leader in defence manufacturing.