In a fresh move towards developing a range of unmanned strike weapons, Tata Advanced Systems Limited and Nibe Limited have emerged as the two lowest bidders in a tender of 840 loitering munitions for the Indian Army which can be used to target enemies beyond 100 kilometres. The contract is valued at about Rs 1,600 crore and if Tata quotes a lower price, he will get the majority of the order worth of Rs 1,000 crore or more, while Nibe will get the balance of the order worth of Rs 600 crore or less, which will be for its Vayu Astra system on the Skystriker platform. A third contender, A-Vision, was in the fray but did not make the cut on price. Both the winning vendors will now be summoned into the arena for formal price discussions before the contracts are signed, which usually takes a couple weeks using the fast-track procurement process that the Army has availed itself of.

It's not the number on the cheque in particular that makes this deal noteworthy, but the pattern it falls into. The contract follows a series of fast-track deals for drones and loitering munitions contracts signed by the Army's Artillery in recent months, which has resulted in dedicated drone formations being created. The Shaktibaan regiments have been created to operate with drones and Divyastra batteries and separate Bhairav battalions have been provided with the ability to conduct precision strikes using the drone systems. Those officers in the modernisation initiative have stated that the force will seek to bring in nearly a lakh drones of various ranges in the next one year to 18 months, ranging from 50 kilometres to a thousand kilometres. There's a separate tender for 36 jet-powered drones valued at about Rs 1,500 crore, which has been split into two, the lowest bidder and the second lowest bidder.

The urgency runs directly from the previous year's Operation Sindoor when Indian military bases were attacked by home-grown loitering munitions and precision-guided systems within the borders of Pakistan. That operation did far more to change New Delhi's perception of drones than any white paper. Afterwards, officials explained to the reporters that domestically-made platforms did what they were designed to do, and that experience has since led to money being pumped more rapidly than usual into the acquisition pipeline. The next wave of tactical drone procurement could involve an investment of as much as Rs 2 lakh crore, steeply up from the approximately Rs 300 crore worth of orders placed for the tactical class of drones not long ago, the Drone Federation India, an industry body that is in touch with the government, has informed wire agencies. That's not some random guess it's a conversation that's already been happening between the ministry and manufacturers regarding scaling up.

This is confirmed by the wider industrial landscape. The defence production in India has reached the figure of Rs 1.78 lakh crore in the past financial year and the drones are one of the fastest growing segments of the pie. Over 600 companies are now developing drones or drone parts in Australia, and more than 100 of them are specifically working in the defence sector, a scene that only began to emerge 5 years ago. Established companies such as Larsen & Toubro, Adani Defence and Hindustan Aeronautics are pitching against more niche businesses from the start such as ideaForge and Nibe, which was a small components manufacturer less than a decade ago, and now is bidding for nine-figure defence contracts on its own merits. That's the story of Nibe's own financials in miniature growth of the topline by more than 70 per cent last fiscal year and the wild swings of the stock on the back of contract announcements and successful trials, including a 20 per cent upper circuit in the beginning of this year after its Vayu Astra-1 endurance test at a high altitude above 14,000 feet in Uttarakhand.

There's a strategic undertone which needs to be clearly stated. India has traditionally relied on Israel and in a lesser degree the United States for acquiring high end unmanned platforms and currently operates Israeli made Heron and Harop platforms for long range surveillance and strike. However, the trend has definitely shifted towards indigenous content, not only because of cost, but also as a result of lessons learnt from the war in Ukraine in terms of supply security. The split-order tenders are of the class that is being sought by every modern military across the world as it has seen Ukrainian and Russian production lines buckle under the strain of war demand, and is being used in this contract and in the larger, similar tender for medium altitude drones for about Rs 30,000 crore that is being pursued by HAL, Tata, Adani and L&T. It is not only because China undercuts on the price, but because China has created an entire drill manufacturing ecosystem, including batteries, embedded electronics, rapid prototyping, which India is still following half heartedly.

None of this ensures a smooth execution. The process of price negotiation can be prolonged, technical snags can emerge during the process of trials, and India's defence procurement history is strewn with examples of contracts that were taking longer than claimed. The numbers Nibe publishes reveal the mood swings that this business can endure in two quarters, it went from a loss of a quarter to a profit jump of many times. But the direction of travel is no longer in doubt. No longer a tag line in defence planning, drone technology has now become the primary focus of the government with billions of rupees being channelled towards companies that can build, test and deliver the technology at the pace a modern battlefield requires.