Reuters sources said the move comes amid rising tensions between the two neighbors and New Delhi's pursuit of a military modernization policy with increased use of drones and other autonomous systems.
Indian defense and security analysts say officials are concerned that intelligence could be exploited through Chinese-sourced components such as communications equipment, cameras, radios and operating system software on drones.
Since 2020, New Delhi has imposed restrictions on the import of reconnaissance drones and conducted the process through military tenders.
In early 2023, minutes of a drone tender meeting showed that Indian defense officials told potential bidders that equipment or sub-assemblies “originating from countries sharing a land border with India will not be accepted for security reasons.”
Meanwhile, another document found that subsystems had “security vulnerabilities” that could compromise critical military data, and required suppliers to disclose the origins of components.
Indian industry is now dependent on the world’s second-largest economy despite concerns about cyberattacks. Last week, Beijing announced export controls on certain types of drones and related equipment. In 2019, the US Congress banned the Pentagon from buying or using drones and components made in China.
70% of drone components are made in China
Prime Minister Narendra Modi’s government is looking to build India’s drone capabilities to counter emerging threats. The country has earmarked $19.77 billion for military modernization in 2023-24, of which 75% will be for domestic industry.
However, the ban on using components from China has increased the cost of domestic drone production by up to 50%, as manufacturers have to "have a headache" finding replacement parts.
Finance Minister Nirmala Sitharaman said that large Indian private companies are less invested in research and development, with venture capitalists especially staying away from military projects because of the long lead times and the risk of no market for the product.
Sameer Joshi, founder of NewSpace Research & Technologies, one of the companies supplying small drones to the Indian military, said that 70% of the goods in the supply chain are made in the neighboring country. This has led to some manufacturers importing Chinese components but “white labeling” them to keep costs from skyrocketing.
India depends on foreign countries for both components and systems as it lacks the technology to manufacture certain types of drones.
A government-funded program to produce unmanned systems has been delayed by at least half a decade, said Y. Dilip, director of the Aeronautical Development Agency (ADE). The Tapas platform, for example, meets most of the technical requirements but is limited by its engine to achieve the goal of “operating at 30,000 feet for 24 hours.”
To fill this gap, in June 2023, New Delhi announced the purchase of 31 MQ-9 drones from the US for more than $3 billion.
(According to Reuters)
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