Lloyds Engineering Works Limited (LEWL), a prominent player in the engineering sector, has taken a bold step into India's burgeoning defence industry by incorporating a wholly-owned subsidiary named Lloyds Advance Defence Systems Ltd.

This move, announced on 12 December 2025, underscores the company's ambition to carve out a significant niche in indigenous defence manufacturing amid the nation's push for self-reliance in security technologies.

The new subsidiary is dedicated exclusively to the defence vertical, which LEWL views as a realm of immense strategic importance and substantial growth potential. By ring-fencing operations under this entity, the company aims to enhance agility, ensure specialised compliance with defence regulations, and foster a concentrated focus on local production capabilities.

This strategic initiative aligns seamlessly with India's 'Atmanirbhar Bharat' agenda in defence, emphasising not merely the adoption of advanced solutions but their complete indigenisation within the country. LEWL anticipates that this synergy between global expertise and domestic execution will form a cornerstone of its future growth, driving sustained value creation for stakeholders.

To bolster its entry, LEWL has forged key international collaborations, enabling rapid deployment of cutting-edge technologies. These partnerships position the firm to deliver world-class defence equipment tailored to India's evolving security imperatives, from tactical drones to sophisticated radar systems.

A pivotal alliance is with Poland's FlyFocus Sp. z o.o., targeting the joint introduction of advanced First Person View (FPV) drones. These next-generation unmanned aerial vehicles (UAVs) are designed for rapid-response tactical operations, addressing critical gaps in India's drone warfare capabilities amid rising border tensions and asymmetric threats.

Complementing this, LEWL has partnered with Kliver Polska Sp. z o.o., also from Poland, for marine and underwater systems. The collaboration encompasses the design and prototyping of essential marine infrastructure, including Towed Reels for multifunctional underwater platforms and Operational Test Tilt Stands, enhancing India's naval and sub-surface defence posture.

Adding to its technological portfolio, the company has inked a deal with Italy's Virtualabs S.r.l. for state-of-the-art radar technology. Applicable across both defence and civilian domains, this partnership promises versatile radar solutions that could integrate into air defence networks, surveillance systems, and even homeland security applications.

These tie-ups exemplify a pragmatic approach to technology transfer, blending foreign know-how with Indian manufacturing prowess. For LEWL, transitioning from its engineering roots—primarily in metals and heavy fabrication—to defence production leverages existing strengths in precision engineering and modular assembly.

India's defence sector has witnessed explosive growth, with procurement budgets surging and private participation encouraged under reforms like the Defence Acquisition Procedure 2020. Companies like LEWL entering via specialised subsidiaries mirror trends seen with Tata Advanced Systems and Bharat Forge, accelerating private sector contributions to a market projected to exceed $25 billion annually by 2025.

The FPV drones from the FlyFocus collaboration are particularly timely, given the Indian Armed Forces' emphasis on swarm drone tactics post the 2020 Galwan clash. These systems offer real-time video feeds for precision strikes, reconnaissance, and electronic warfare, potentially integrating with platforms like the Akashteer command system.

In the maritime domain, Kliver Polska's contributions address vulnerabilities in underwater operations. Towed Reels facilitate deployment of sonar arrays and unmanned underwater vehicles (UUVs), vital for anti-submarine warfare in the Indian Ocean Region, where China's naval expansion poses strategic challenges.

Virtualabs' radar expertise could yield multi-function radars with active electronically scanned array (AESA) features, bolstering India's integrated air defence grid. Dual-use potential extends to civilian aviation and disaster management, aligning with the government's push for technology diversification.

Financially, LEWL's shares reacted positively to the announcement, reflecting investor confidence in defence as a high-margin, long-term play. The subsidiary's structure allows for dedicated funding, R&D investments, and order pipelines from DRDO, HAL, and the three Services.

Challenges ahead include navigating stringent export controls, qualifying for 'Make in India' tenders, and scaling production amid supply chain constraints. Yet, LEWL's established order book in non-defence sectors provides a stable base for this diversification.

This foray positions Lloyds Advance Defence Systems as a nimble innovator in a crowded field dominated by incumbents like L&T and Bharat Electronics. Success will hinge on execution, certification milestones, and securing initial contracts, potentially transforming LEWL into a defence heavyweight.

The development signals deepening private sector momentum in India's defence indigenisation drive, promising enhanced national security through homegrown, globally benchmarked technologies.

Based On ET News Report