India is opening up the designs of its first indigenously developed drones to domestic private companies, seeking to spur further technological advances and encourage manufacturing as Prime Minister Narendra Modi modernizes the military.
Previously secret blueprints for the Rustom drones are being made available under a drive to boost the defense industry, a break from the past practice of relying on state-run companies, according to K. Tamilmani, aeronautical director general at the Defense Research & Development Organization in New Delhi.
"We're now talking of sharing everything that we develop," Tamilmani said in an interview. "The concept of public-sector defense companies alone making everything that the Indian armed forces need is gone."
Modeled on General Atomics' U.S. Predator aircraft, Rustoms are designed for surveillance and target-tracking in areas such as India's disputed borders with China and Pakistan. Modi's wider vision is to develop a defense-industrial complex that can improve India's sometimes poorly equipped forces and curb its reliance on overseas acquisitions.
While Modi has eased restrictions on joint ventures between Indian and foreign defense companies to gain much-needed expertise, Asia's third-largest economy has a long way to go.
One variant of the Rustom that's already flying will be made by private companies, Tamilmani said in the Sept. 9 interview. He declined to identify which businesses are talking with the government.
Taneja Aerospace & Aviation Ltd. and Trivan Industries make the airframe of another version that's yet to become fully operational, he said. Overall assembly is handled by state-run Hindustan Aeronautics Ltd., India's largest defense contractor.
The Rustom drones took between five and 10 years to develop, according to S. Christopher, who heads the Defense Research & Development Organization, which is part of India's Defense Ministry.
Larsen & Toubro Ltd., India's biggest engineering company, paid a $2.1 million fee this year for an unmanned aircraft that provides aerial targets for training -- the first defense technology transfer by the government to the private sector, according to Tamilmani.
Larsen & Toubro can export the product if the government approves, as well as use the existing technology to develop a new vehicle, according to the defense research unit. The Mumbai-based company will pay a royalty for each aircraft made under the deal.
Debojyoti Chatterjee, a spokesman for Larsen & Toubro, declined to comment.
Modi's government has approved $60 billion of defense purchases since taking office in May last year, according to data compiled by Bloomberg. The Cabinet recently cleared a deal for 15 Chinook and 22 Apache helicopters from Boeing Co. for about $3 billion.
Boeing, Airbus Group SE and BAE Systems Plc are among the companies seeking to profit from Modi's push to improve India's military. The government is also in talks with Dassault Aviation SA for the purchase of 36 Rafale fighter jets.
The move to transfer technology to private businesses is long overdue, said Amber Dubey, the New Delhi-based head of aerospace at KPMG.
"Our huge import dependence for defense equipment has a lot to do with the systematic sidelining of the private sector," he said.
Anurag Kotoky and Manish Modi of Bloomberg News contributed to this report.
SundayMonday Business on 09/28/2015