India can be a major drone hub—if it learns to take risks, accept losses

The cost of the US-India drone deal raises a question—could some portion of this amount could have been better spent on indigenously developing and producing smaller drones?

Drones were deployed to monitor the security situation in the run up to the Pran Pratishtha ceremony in Ayodhya | Representational image | ANI

The multiplicity of roles that drones can undertake has been battle-tested and their utility has been convincingly established. Depending on the role, drones come in various sizes. At the higher end of lethality are the American MQ 9-Reaper and at the lower end of surveillance is the Black Hornet weighing less than 1.2 ounces.

India is in the process of acquiring 31 higher-end MQ9B Predator armed drones from the United States at an approximate cost of Rs 2.5 lakh crore. The deal was announced during Prime Minister Narendra Modi’s visit to the US in 2023. The Navy already operates two unarmed Predator drones, which are on lease, at the Rajali naval air station in Tamil Nadu. The new acquisitions will be apportioned to the three Services with the Navy getting the majority share. Apart from the political message of reliance on the US for major weapon systems, it also signals that Atmanirbharta is not currently feasible in this class of weapon systems.

The cost of the deal raises the issue of opportunity costs. The question that arises is whether at least some portion of this amount could have been better spent on developing and producing indigenous smaller drones in large numbers at lower costs. This alternative opportunity is birthed by factors like increased lethality and efficiency of smaller drones, the potential for leveraging existing human capital in the country and relatively lower per-unit costs that are supplemented by faster development and production through 3-D printing.

In operational terms, on the modern battlefield, big platforms are being increasingly replaced by smaller ones. Protecting bigger platforms like ships, aircraft carriers, and tanks from smaller vectors like drones, which can swarm attack and overwhelm the target in large numbers, is challenging the ability of the existing defensive systems employed by the large platforms. The advent of the concept of the Kamikaze (suicidal) and Swarm drones are classic examples. However, there is no doubt that smaller drones lack the lethality found in various types of missiles that can only be carried by larger armed drones. Therefore, India’s arsenal should have a healthy mix of both large and small drones.

Budget constraints 

For a country like India, where the size of the defence budget is severely constrained by competing demands and the established long-standing proclivity of political leadership to reduce spending on defence, the question that arises is how to maintain the correct balance between importing large platforms and producing smaller ones. This capability lies within both the governmental and private sectors. Ideally, it should be a joint venture.

Unfortunately, both these sectors are handicapped by a lack of funds. If the announcement in the Interim Budget 2024 about establishing a Rs 1 lakh crore corpus for long-term loans for deep tech in the defence sector and the tax advantage to start-ups is any indication, there is recognition that the government will have to be the prime mover for provision of funds. But as usual, the devil will lie in the details of how the fund is managed, distributed and monitored. Importantly, it will have to navigate the shackles of the audit authorities, which could be expected to privilege procedure over outcomes. The private sector would be wary of the risks involved, especially since these would be dependent on a single buyer, the defence ministry, unless they are able to access the export market.

If more indigenous products are going to be developed, the government will also have to increase its budget to procure the items on offer. The interim defence budget allocation and the government’s allocation for capital expenditure do not indicate any steps to meet that need. Statistical jugglery apart, when one takes inflation and changes in foreign exchange rates into account, the capital budget will fall short on the demand side. Until now the structural problem was mostly on the supply side.

Efforts by young entrepreneurs

With respect to the development of drones, there are some encouraging signs emerging. The DRDO Young Scientists-Asymmetric Technologies (DYSL-AT) Lab, Hyderabad is one of five young scientists labs launched by the PM in 2020—IISc Bangalore (Artificial Intelligence), IIT Bombay (Quantum Technologies), IIT Madras (Cognitive Technologies) and Hyderabad (Smart Materials Lab). In 2021, the DYSL-AT successfully demonstrated its swarm drones. It is now working on a ‘gun on drone’ and an underwater autonomous vehicle. However, the conversion of demonstrated capability to operational systems has been an endemic weakness and has often failed to meet the user requirements and overcome the vagaries of the defence acquisition system. Thus they have had to face problems of budgetary support.

According to a recent report, the Hyderabad-based Adani-Elbit joint venture has been called upon to deliver 20 Hermes 900 medium-altitude, long-endurance (MALE) UAVs to Israel. These UAVs have a 36-hour endurance, can carry a payload of 420 kgs and can operate at an altitude of 32,000 feet. Adani-Elbit has also secured initial orders from the Indian Army and Navy for two Hermes 900 units each. These units are being procured under emergency powers for immediate needs and could serve as a test bed for further procurement. The three Services have expressed a combined requirement for 155 MALE-class UAVs. It is highly unlikely that these demands can be met without due increase in the capital budget.

Currently, only the airframe for the Hermes 900 drone is manufactured by Adani Aerospace. It is hoped that Israel will transfer technology and the Hermes will be assembled entirely in India in due course. Notably, the availability of the Hermes 900 has resulted in the closure of DRDO’s TAPAS BH-201 drone project, which was its main endeavour to design indigenous UAVs. The project was sanctioned in 2011 for Rs 1,540 crore. The first flight of TAPAS took place in 2016 and it was displayed in Aero-India 2023. It has completed 200 test flights and has ostensibly not met the qualitative requirements of the users. The closure of the project is a major setback in the indigenous capability development of MALE-UAVs.

On the other hand, it is understood that efforts are being made by young entrepreneurs to design and develop myriad miniaturised sub-systems of drones that are now mostly being imported from China or the West. But their efforts are floundering due to the lack of funds. Now that the defence ministry has created a corpus for research, one can only wait and watch whether the grandiose political announcement will end up as a done deed.

For India, the opportunity lies in the increasing capability of small platforms to take on larger platforms/targets. We have no shortage of human or material capability. Beyond securing financial support, what stands between India emerging as a major drone hub for medium and small drones is the ability to take risks, accept losses, and unleash creativity by being freed from bureaucratic procedures and unnecessary interference.

Ideally, private sector investment is best suited for medium and small drones, but whether they would do so is a moot question as the government is the only market unless the drones are multiple use. The major challenge for the government is to incentivise the private sector. It is a path that has been opened up but would require further widening if India wants to realise its potential in the design and manufacture of drones.

Lt Gen (Dr) Prakash Menon (retd) is Director, Strategic Studies Programme, Takshashila Institution; former military adviser, National Security Council Secretariat. He tweets @prakashmenon51. Views are personal.

(Edited by Theres Sudeep)