India set to build US-origin combat drones at home in rare tech transfer deal

India is close to clinching a landmark deal with US-based defence tech firm Shield AI to acquire and locally manufacture its V-BAT combat drones, marking a rare instance of technology transfer in India’s defence procurement landscape.

As reported by Mint, the deal is part of a $4.5 billion emergency procurement programme initiated shortly after Operation Sindoor. Under the plan, the Defence Ministry is in advanced talks with Shield AI to supply enhanced V-BAT drones to the Indian Air Force (IAF), while simultaneously setting up a domestic production line through a joint venture with JSW Defence, a division of the JSW Group.

The first contract for the IAF is expected to be worth $35 million, the ceiling for emergency procurement contracts. But the broader collaboration goes well beyond acquisition. The companies have inked a $90-million joint venture agreement that includes full transfer of technology (ToT) to JSW, enabling large-scale local manufacturing, assembly, and testing of the V-BAT system in India.


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As part of the JV, JSW Group will invest $90 million over two years, $65 million of which will be deployed in the first 12 months. This will cover the establishment of a global compliance programme, set up manufacturing facilities, and train local manpower to handle the licensed tech.

The plan is not just to meet Indian defence requirements but to make the country a global production hub for the V-BAT, which is already deployed by several international forces including the United States Marine Expeditionary Units.

The V-BAT is a vertical take-off and landing (VTOL) drone with fixed wings and long endurance capabilities. Designed for intelligence, surveillance, and reconnaissance (ISR) missions, it’s built for tactical deployments in challenging environments, from special forces operations to front-line support for infantry, armoured, and artillery units. Its patented ducted design allows for a minimal logistics footprint and quick, flexible deployment.

If finalised, the deal would mark a significant shift in India’s approach to defence acquisitions, moving from outright purchase to co-development and localised production of advanced weapon systems.