JSW Defence, Shield AI begin work on $90 million drone making facility in Hyderabad

JSW Defence and US-based Shield AI have begun work on a $90 million unmanned-aerial-system manufacturing facility on the outskirts of Hyderabad, under a long-term licensing and technology-transfer agreement, the companies said.

The project, located within the Electronic Manufacturing Cluster at Maheshwaram, is intended to produce, assemble and test Shield AI’s V-BAT drone system, a vertical take-off and landing platform used for reconnaissance and battlefield intelligence by multiple defense forces.

According to JSW, the facility will be built over 16 acres and is designed to support “large-scale production” for the Indian armed forces while also acting as a global export base.

The company added that the investment will cover the construction of the plant, a comprehensive training program, and a global compliance framework to meet defense-industry standards. Once completed, the plant will serve as a supply-chain hub for key UAV components and will house final assembly and flight-testing infrastructure. Production is currently targeted for the last quarter of 2026.

JSW said the Hyderabad facility is being developed as part of the wider industrial policy push for domestic defense manufacturing. The company described the venture as aligned with India’s broader goal of increasing self-reliance in next-generation defense systems and reducing overseas dependence on advanced unmanned platforms.

It called the project the start of a local industrial ecosystem around Group-3 UAVs, which include long-endurance drones capable of vertical lift and rapid deployment from limited operating environments.

Shield AI, based in San Diego, has positioned V-BAT as a single-engine, ducted-fan, fixed-wing system designed for long-range ISR missions and maritime and land-border surveillance. The company has promoted it as a platform capable of autonomous control, high-endurance flights and operation from confined decks, including naval vessels. JSW said that under the partnership, India will become one of the principal production nodes for the platform.

The plant will also support workforce training and familiarization for operators and maintenance teams domestically.

JSW said the investment extends to skill development so that flight-testing, inspection, assembly and post-deployment support can be managed locally. The company added that it intends to develop vendor capacity within India over time, with localization progressively expanding to more critical sub-assemblies.

While neither firm commented on projected capacity, earlier state-level statements in Telangana placed the scale at several hundred units per year once the plant matures, alongside job creation for skilled technicians.

JSW also said that it views the facility as part of a long-term defense corridor strategy, noting that the Maheshwaram cluster offers proximity to aerospace and electronics suppliers already operating in and around Hyderabad.

JSW characterized its agreement with Shield AI as a step toward transferring intellectual property and production know-how for systems originally engineered in the US. According to the company, both sides will jointly work on compliance, safety certification and operational readiness, with the end goal of creating a fully-qualified, export-eligible production base.

The announcement also signaled that the plant could serve overseas defense customers, subject to approvals.

The state government of Telangana has separately said that it aims to anchor drone design, manufacturing and flight-testing within dedicated industrial zones, citing expected growth in India’s UAV market over the next decade.

JSW said the project aligns with those ambitions, pointing to the potential role of the V-BAT platform in border management, maritime surveillance and asset protection.

The V-BAT partnership was originally outlined in late 2024, when both companies announced plans to localize production in India subject to facility planning and regulatory clearances.

Shield AI has previously underscored the importance of establishing regional manufacturing bases, arguing that demand for autonomous and semi-autonomous systems is accelerating as militaries deepen ISR capabilities and pursue longer-range, lower-signature airborne platforms.

JSW said that establishing an Indian production line forms part of the economic logic of supplier diversification and close-to-deployment manufacturing.

According to the company, the localization of the V-BAT supply chain will shorten delivery cycles for the Indian customer base and expand opportunities for component makers in composite structures, electronics, sensors and propulsion subsystems.

The companies did not disclose commercial terms, operational capacity, or prospective order volumes from the Indian defense establishment. However, JSW noted that the program is structured to scale, with the plant’s infrastructure and compliance architecture sized for future expansions.

Shield AI has indicated in separate statements that global demand for its Group-3 platform has been rising as militaries adopt distributed, lower-cost aerial assets in parallel with higher-end strategic systems.