L&T Partners With General Atomics to Build Combat Drones Worth $4,457M Market by 2030

India’s defense manufacturing ambitions just received a major boost. Infrastructure giant Larsen & Toubro has partnered with American drone powerhouse General Atomics to build combat-proven unmanned aircraft systems on Indian soil, a move that could reshape the country’s aerospace capabilities and strengthen its military readiness. According to NDTV Profit, this collaboration will manufacture Medium Altitude Long Endurance (MALE) Remotely Piloted Aircraft Systems for the Indian armed forces, marking one of the most significant defense technology partnerships under the ‘Make In India’ initiative.

The partnership positions L&T as the prime bidder for the Ministry of Defence’s upcoming 87 MALE RPAS program, with General Atomics Aeronautical Systems (GA-ASI) serving as the technology partner, as reported by Angel One on October 31, 2025. The collaboration will enable production of GA-ASI’s MQ-series RPAS, combat-proven platforms that have accumulated millions of flight hours in surveillance and strike missions globally. ScanX notes that the initiative includes critical technology transfers and fulfills indigenous content requirements, directly supporting the government’s ‘Atmanirbhar Bharat’ vision for defense self-reliance.

Markets responded positively to the announcement. According to Equitypandit, L&T shares rose 1% to reach a day’s high of Rs 4,045.90 on October 31, 2025, while NDTV Profit reported the stock trading 0.8% higher at Rs 4,017.70 on the NSE by mid-morning. This comes on the heels of strong quarterly results, with the company reporting a 15.6% jump in net profit to Rs 3,926 crore in Q2 FY26, as noted by Capital Market.

The timing couldn’t be better for India’s defense drone ambitions. India’s military drone market generated revenue of $1,760.7 million in 2024 and is projected to reach $4,457.6 million by 2030, representing a compound annual growth rate of 16.9%. P&S Intelligence offers an even more bullish forecast, projecting the market will reach $5,574.6 million by 2032, growing at 17.5% annually. These projections underscore the massive opportunity L&T is positioning itself to capture.

General Atomics brings formidable technological credentials to the table. As reported by Angel One, GA-ASI is a leading global supplier of unmanned aircraft systems, producing renowned models including the Predator, MQ-9A Reaper, MQ-1C Gray Eagle, MQ-20 Avenger, and MQ-9B SkyGuardian and SeaGuardian. According to General Atomics’ own announcements from June 2025, the company’s Predator line of UAS has accumulated over 8 million flight hours across 30 years of operations.

Several factors are driving India’s aggressive push into indigenous drone manufacturing:

• Rising Defense Budgets: According to Ken Research, India’s Ministry of Defence allocated $10 billion to its capital acquisition budget in 2024, with substantial portions directed toward drone technology. The Defence Research and Development Organisation received $4 billion in 2024 to advance drone systems.
• Geopolitical Tensions: P&S Intelligence identifies increasing tensions with neighboring countries as a primary market driver, creating urgent demand for surveillance and combat capabilities.
• Technology Advancement: The same source notes growing focus on AI-enabled, autonomous, and indigenous drones for complex missions including attack and electronic warfare operations.
• Strategic Independence: Nexgen Exhibitions reported that Operation Sindoor has accelerated drone adoption in counter-terror operations, signaling a new strategic era for India’s drone deployment.

The partnership represents more than just technology transfer. According to India TV News, S.N. Subrahmanyan, L&T’s Chairman and Managing Director, stated the collaboration offers India a unique opportunity to manufacture state-of-the-art unmanned platforms indigenously, enhancing defense capabilities and advancing self-reliance in aerospace technologies. Dr. Vivek Lall, Chief Executive of General Atomics Global Corporation, emphasized that combining GA-ASI’s proven technology with L&T’s robust manufacturing expertise will deliver cutting-edge solutions while contributing to a sustainable defense ecosystem.

This fits within India’s broader defense manufacturing transformation. According to The Economic Times, India’s indigenous defense output reached a record Rs 1.51 lakh crore in FY 2024-25, marking 18% growth. The government has set an ambitious target of Rs 3 lakh crore by 2029. PIB reports that defense production surged 174% from Rs 46,429 crore in 2014-15 to Rs 1,27,434 crore in FY 2023-24, driven by ‘Make in India’ initiatives.

Analyst sentiment reflects confidence in L&T’s defense expansion. According to ScanX, several brokerages have revised their target prices, with PL Capital setting the highest at Rs 4,766, Nuvama at Rs 4,680, and Motilal Oswal at Rs 4,500. Morgan Stanley maintains an overweight stance with a target of Rs 4,090.

The strategic implications extend beyond immediate financial gains. Bharatshakti notes that with significant technology transfer expected, India will gain valuable expertise in critical areas including aerostructures, avionics integration, and ground control systems. The project is viewed as a strategic enabler for future exports of indigenous remotely piloted aircraft, potentially positioning India as a global player in unmanned systems manufacturing.

This partnership signals a turning point in India’s defense capabilities. By combining American technological leadership with Indian manufacturing scale and cost efficiency, the collaboration could accelerate India’s journey toward aerospace self-reliance while creating a competitive, globally integrated manufacturing base. As defense modernization accelerates and geopolitical uncertainties persist, indigenous drone production isn’t just about military readiness but economic opportunity and strategic autonomy.

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