Introduction

From a stealth fighter’s missing engine to a jet-powered kamikaze drone’s first flight, September 2026 offered a compact snapshot of how India is racing to close its self-reliance gaps even as the character of modern warfare shifts under its feet

For a defence establishment that has spent decades importing everything from fighter jets to artillery shells, September 2026 delivered an unusually concentrated run of indigenisation news. Within the span of a few weeks, India’s largest private conglomerate entered the race to build the country’s first sovereign fighter-jet engine, the Ministry of Defence cleared private firms to manufacture DRDO-designed missiles, and a Lucknow-based startup successfully flew India’s first indigenously developed jet-powered kamikaze drone. Taken individually, each is a notable but incremental development. Taken together, they sketch the outline of a defence-industrial strategy that has been building since the 2025 Operation Sindoor strikes against Pakistan forced New Delhi to confront, in real time, just how dependent its military remains on foreign suppliers for critical systems — and how urgently that dependence needs to shrink.

That domestic push is unfolding against a global backdrop that is itself changing faster than most defence establishments can keep pace with: directed-energy weapons moving from experimental status to operational use on live borders, battlefield data harvested from Ukraine’s four-year war becoming a tradeable strategic asset among allied militaries, and NATO running large-scale exercises explicitly built around drone warfare and counter-UAS interoperability. For India, watching this from the outside while managing its own conflict-adjacent frontiers — Pakistan to the west, an increasingly unstable Myanmar to the east, and China across the Line of Actual Control to the north — these global shifts are not academic. They are a preview of the capabilities India will need domestically within the decade.

The Engine Problem: India’s Oldest Unsolved Defence Challenge

Few gaps in India’s defence-industrial base have proven as stubborn as fighter-jet propulsion. It is a peculiar irony that a country capable of designing and building its own fighter airframes has never been able to build the engine that powers them — and that gap has had real, measurable costs. Hindustan Aeronautics Limited’s indigenous Tejas light combat aircraft, a 4.5-generation platform that has been in development for decades, has faced persistent delivery delays traced substantially to erratic supplies of the GE F414 engine from American manufacturer General Electric, itself contending with its own supply-chain bottlenecks. For a platform meant to anchor the Indian Air Force’s modernisation, being held hostage to a single foreign supplier’s production schedule has been a recurring embarrassment and a strategic vulnerability.

That history is what makes the mid-August 2026 announcement from Reliance Industries and Rolls-Royce significant. The two companies issued a joint statement declaring their strategic intent to jointly design, develop, manufacture, test and deliver a “sovereign indigenous combat engine” for India’s Advanced Medium Combat Aircraft — the fifth-generation stealth fighter programme that represents India’s most ambitious indigenous combat aircraft effort to date, with a prototype rollout targeted for 2028. Under the proposal, the two firms would establish a dedicated Aerospace Gas Turbine Complex, envisioned as an end-to-end Indian centre of excellence spanning design, development, manufacturing, testing, production and through-life support of advanced aero-engines — the full lifecycle capability that India has never possessed domestically for a combat-grade engine. Rolls-Royce chief executive Tufan Erginbilgic called the tie-up a milestone toward a “robust, self-reliant aerospace ecosystem,” while Reliance executive director Anant Ambani framed it explicitly in terms of strategic autonomy, arguing that India’s sovereignty in critical technologies required exactly this kind of domestic capability-building. Neither company disclosed the scale of planned investment, and the partnership remains at the “strategic intent” stage — a memorandum of ambition rather than a signed, funded programme.

What makes the AMCA engine question particularly consequential is that Reliance-Rolls-Royce is not the only bidder. A rival proposal from French engine maker Safran, partnered with India’s state-run Gas Turbine Research Establishment, is simultaneously under evaluation by the Cabinet Committee on Security. The Committee’s eventual choice will shape not just who builds the AMCA’s engine, but the broader template for how India structures future defence-technology partnerships — whether through a private-sector-led model banking on Reliance’s industrial scale and execution capacity, or a public-sector route anchored in GTRE’s decades of institutional experience (and institutional caution) working alongside a French partner. Either way, the fact that India is for the first time hosting a genuine competitive process for combat-engine development, rather than simply importing a finished product, marks a structural shift from previous decades.

Opening the Missile Supply Chain

If the AMCA engine competition represents India’s aspiration to build entirely new indigenous capability, the Ministry of Defence’s decision to transfer conventional missile technology from the Defence Research and Development Organisation to private industry represents something more immediately consequential: unlocking capacity that already exists on paper but has been bottlenecked by DRDO’s limited manufacturing bandwidth. The approval covers technology transfer for the full range of DRDO-developed conventional missile systems to private Indian defence firms, with the explicit goals of scaling domestic missile production, reducing India’s residual reliance on imported munitions, and — notably — building India’s capacity to eventually export these systems to foreign partners, a revenue and strategic-influence opportunity that has become increasingly attractive as countries look to diversify away from traditional arms suppliers like Russia amid its prolonged war in Ukraine.

The policy’s design also reflects a broader ambition to widen India’s defence-industrial base beyond the handful of large conglomerates that have historically dominated private-sector defence contracts. By explicitly building pathways for micro, small and medium enterprises to enter missile-production supply chains — subject to qualification, certification and regulatory standards — the Ministry is betting that a deeper, more distributed manufacturing ecosystem will prove more resilient than a small number of large prime contractors, echoing lessons drawn from how distributed, agile supply chains have sustained Ukraine’s wartime production surge. This missile technology-transfer decision arrived alongside the Ministry’s sixth Positive Indigenisation List, which identified 405 new defence items — components, sub-systems and platforms — earmarked exclusively for domestic production, with an estimated procurement value of roughly INR 30.7 billion (approximately US$320.8 million). Positive Indigenisation Lists work by progressively banning the import of listed items after a specified date, forcing the domestic industry to develop substitute capability — a blunt but, by most industry accounts, effective instrument that India has used repeatedly since 2020 to compel import substitution across categories ranging from small arms to radar systems.

Divyastra Mk3: A Small Drone With an Unusual Engine

Perhaps the most technically distinctive development of the month came not from a state-run laboratory but from a four-year-old startup. Kawa UAV Private Limited, operating under the brand name HoverIt and headquartered at the Lucknow node of the Uttar Pradesh Defence Industrial Corridor, successfully flew the Divyastra Mk3 — described as India’s first domestically designed suicide, or kamikaze, drone — on its maiden test flight at a dedicated drone-testing airstrip in Uttar Pradesh. Kamikaze drones, sometimes called loitering munitions, are designed to loiter over a target area before diving into vital enemy assets, infrastructure or personnel, detonating an onboard warhead on impact. Their appeal in modern warfare — vividly demonstrated across the Russia-Ukraine and various Middle Eastern conflicts of the 2020s — lies in their combination of relatively low cost, operational versatility and the ability to strike high-value targets without risking a manned platform or a far more expensive precision-guided missile.

What distinguishes the Divyastra Mk3 from the majority of kamikaze drones currently in global service is its propulsion system. Most loitering munitions rely on propeller-driven electric motors, prized for their quiet operation and mechanical simplicity but limited in speed, range and payload compared to jet propulsion. The Divyastra Mk3’s jet-engine architecture is a deliberate departure, reportedly aimed at extending range and strike speed — features that matter considerably in contested, longer-distance theatres. The drone is also claimed to feature autonomous flight control and AI-enabled target engagement, positioning it within the broader global trend toward increasingly autonomous strike platforms that require diminishing levels of human-in-the-loop control during the terminal engagement phase — a trend that is simultaneously reshaping military doctrine and generating persistent ethical and legal debate internationally over the appropriate boundaries of machine autonomy in lethal decision-making. For Uttar Pradesh’s still-young Defence Industrial Corridor — one of two such corridors India has established, the other running through Tamil Nadu — a successful first flight from a homegrown startup is also a validation of the broader policy bet that dedicated defence manufacturing zones, tax incentives and land allocation can incubate genuine indigenous innovation rather than merely attracting assembly-line operations for foreign-designed systems.

The Global Battlespace Is Moving Faster Than Doctrine

India’s indigenisation push does not happen in isolation, and the same weeks that produced these domestic milestones also offered a compressed preview of where global military technology is heading — developments that Indian planners will be watching closely as they calibrate the country’s own modernisation priorities.

In the United States, the Army’s Joint Task Force–Southern Border used an Army Multipurpose High-Energy Laser system to intercept and destroy a number of drones suspected of being operated by drug cartels along the border with Mexico, targeting eleven cartel-linked unmanned aircraft in what US authorities described as a response to an imminent threat to military and Border Patrol personnel. It marks one of the more visible operational uses of directed-energy weapons in a domestic security context, following earlier reported American use of directed sonic-disruption devices during a January 2026 special-forces operation in Caracas that resulted in the capture of Nicolás Maduro and Cilia Flores. The border deployment sets a precedent that is likely to accelerate global interest in directed-energy systems for counter-drone applications — a category of technology India’s own DRDO has been separately developing, given the demonstrated vulnerability of Indian military installations and border areas to low-cost drone incursions, particularly along the western border with Pakistan.

Ukraine, meanwhile, continued to leverage what has become one of its most valuable strategic assets after nearly four years of war: an enormous, continuously updated archive of real battlefield audiovisual data. Ukraine signed a landmark agreement with the United Kingdom to share this data — gathered through Ukraine’s Avengers AI Lab — with the explicit aim of training and enhancing Britain’s autonomous military platforms, building on a decision Kyiv made in March 2026 to begin sharing select battlefield data with allied states. The arrangement, which coincided with British Prime Minister Andy Burnham’s visit to Kyiv and a separate decision by France and the UK to transfer Storm Shadow missile production blueprints to Ukraine, reflects a broader emerging pattern in allied military cooperation: countries with limited direct combat experience against a peer adversary increasingly treat access to authentic, combat-tested training data as a strategic commodity nearly as valuable as hardware transfers, since AI-driven targeting and identification systems are only as good as the data used to train them. For Britain specifically, the timing matters — Whitehall has been preparing its defences against new forms of Russian hybrid warfare, drone incursions prominent among them, making Ukrainian battlefield data directly applicable to an active domestic threat rather than a purely theoretical one.

That same drone-centric threat perception drove NATO’s BALTIC TRUST 2026 exercise, held across the Sēlija region of southern Latvia between August 3 and 14, 2026, and organised jointly by the Latvian Armed Forces and the NATO Communications and Information Agency. The exercise brought together roughly 650 participants from 24 countries — including non-NATO partners Ukraine, Australia and Japan — with a specific focus on drone warfare and interoperability in the counter-unmanned-aircraft-systems domain, coordinating autonomous platforms, real-time intelligence sharing and synchronised counter-UAS and AI-driven warfare techniques tailored to the specific hybrid threats Baltic states face along their eastern borders with Russia. The scale and specificity of the exercise underline how central counter-drone interoperability has become to NATO’s near-term planning — a priority India’s own military planners, contending with a steadily expanding drone threat along multiple borders, would do well to study closely.

Myanmar’s Shifting Battlefield and India’s Eastern Flank

Not every development shaping India’s near-term security calculus in September 2026 was about hardware. In Myanmar, the military junta — the Tatmadaw — has been mounting a series of successful offensives to retake urban centres that rebel forces had controlled for two to three years, reversing a trajectory that had favoured the opposition since Operation 1027, launched by rebel forces in October 2023 with tacit Chinese backing, delivered major territorial gains against the junta. As of August 2026, the junta had retaken 22 of the 101 towns that had fallen under insurgent control since 2023, a reversal enabled by a combination of heavy airpower, an intensified forced-conscription drive, a notable shift in Beijing’s posture toward the regime, and persistent disunity among Myanmar’s loosely coordinated rebel factions.

The implications for India’s eastern flank are considerable, even if less immediately visible than developments on the western border with Pakistan or the northern LAC with China. Escalating violence in Myanmar directly undermines the security of India’s northeastern border by fuelling illegal cross-border migration and contraband trafficking, adding sustained pressure on the Border Security Force’s already-stretched resources in a region historically prone to insurgency and cross-border criminal networks. A deepening Chinese footprint in mineral-rich Myanmar, channelled through Beijing’s evolving relationship with the junta, also poses a longer-term threat to Indian infrastructure, energy and industrial investments in the region, complicating New Delhi’s own connectivity ambitions through projects like the Kaladan Multi-Modal Transit Transport Project. The challenge for Indian policymakers going forward will be balancing legitimate concern over Myanmar’s trajectory against the simultaneous, and somewhat contradictory, pursuit of a broader détente with Beijing — a balancing act that captures, in miniature, the layered and often competing security priorities India must manage simultaneously across its very different borders.

Conclusion: A Self-Reliance Race Against a Moving Target

What connects an engine partnership in Mumbai, a missile technology transfer in New Delhi, a drone test flight in Lucknow, a laser deployment on the US-Mexico border, a data-sharing pact between Kyiv and London, and a counter-drone exercise in Latvia is a single underlying dynamic: the pace of change in military technology and doctrine has outstripped the pace at which most countries, India included, can indigenise and institutionalise new capability. India’s defence-industrial push — visible in the AMCA engine competition, the opening of missile production to private industry, the Positive Indigenisation List’s steady expansion, and homegrown platforms like the Divyastra Mk3 — represents a genuinely serious and increasingly well-resourced effort to close decades-old dependency gaps. But self-reliance is, by definition, a race against a moving target: even as India builds domestic capacity in propulsion, missiles and autonomous platforms, the global frontier is simultaneously advancing into directed-energy weapons, AI-trained autonomous targeting systems built on real combat data, and integrated counter-drone architectures that most of India’s current indigenous programmes have not yet begun to address at scale.

The strategic lesson from September 2026’s cluster of developments is not that India is falling behind — the AMCA engine competition and the Divyastra Mk3’s jet propulsion both suggest a domestic industry increasingly capable of genuine innovation rather than mere import substitution. The lesson is that indigenisation, to remain strategically relevant rather than merely symbolically satisfying, will need to be paired with sustained investment in the next generation of capabilities — directed energy, autonomous data-driven targeting, and integrated counter-drone systems — even as the current generation of engines, missiles and drones is still being built out. For a country simultaneously managing an unresolved western border with Pakistan, a cautiously thawing but still-unsettled northern relationship with China, and a deteriorating security picture on its eastern flank in Myanmar, that is not a luxury. It is the baseline requirement for defence policy in the years ahead.

Consulting Editor