Defence Ministry flags use of Chinese parts in drones of Dhaksha Unmanned Systems, Sky Industries and Dhoni-backed Garuda Aerospace

Moneycontrol was unable to reach out to Gandhinagar-based Sky Industries. Additionally, Moneycontrol has also reached out to Ministry of Defence for comments on the matter, and the article will be updated when a response is received.

Also read: ‘Make in India’ success runs through Chinese factories, manpower. What can the govt do?

This comes at a time when tensions between India and China, including ongoing border disputes and geopolitical rivalries, have led the Indian government to scrutinise imports from China more closely. The presence of Chinese-made components in defense equipment, such as drones, raises concerns about espionage, data theft, and compromised security systems.

What the letter said

In the letter by the Department of Defence Production under MoD, the government named the three companies and said they, "...are reportedly engaged in selling/supply of UAVs/drones to Indian Defence Forces which include assembly and integration of Chinese components".

"All the industry associations are hereby requested to sensitise their association members engaged in defence manufacturing to exercise caution while procuring defence items from said three companies and remain vigilant while procuring from other players in the field," the letter read.

Post this letter, sources said that Dhaksha's 2023 order to supply 200 logistics drones to the Indian Army, had been put on hold. The matter was first reported by Hindu Businessline.

"We do not use Chinese products"

In a statement to Moneycontrol, a Dhaksha spokesperson said, "We would like to clarify that Dhaksha Unmanned Systems does not use any Chinese components in its defence drones, and any such claims are untrue and unsubstantiated."

"Dhaksha Unmanned Systems has also reiterated this fact to the Defence Ministry officials. As part of the process, the company had submitted all the information and documents related to sourcing of its components to the Defence Ministry, and has successfully submitted documents towards completion of the quality and process audit. Dhaksha Unmanned Systems remains steadfast on its commitment to manufacture ‘Make in India’ drones," the spokesperson said.

"All integrated components meet regulatory standards"

In a statement, a spokesperson for Garuda Aerospace said that the company predominantly works in the agriculture and consumer drone segment. However, in its past statements, the company had previously claimed that its drones also service sectors such as defence, including surveillance and reconnaissance.

"As a DGCA-approved drone manufacturing company, Garuda Aerospace strictly adheres to all government regulations, ensuring that our products meet the highest quality and data security standards. Our supply chain is carefully managed, and we ensure that all components meet all regulatory and quality standards before they are integrated into our products," the spokesperson told Moneycontrol.

"There have been no formal or specific accusations made by the Ministry of Defence against Garuda Aerospace regarding the assembly or integration of Chinese components into our drones. We have received invitations from the Army to participate in trials and significant events organized by the Eastern and Western Commands in August 2024," it said.

"The said internal and confidential notice isn’t a reflection of any wrongdoing on the part of our company and is instead a cautionary notice, a routine measure and a part of general directions by the Ministry of Defence,” the spokesperson added.