DRDO Signs Two Major Naval Technology Deals With BDL and Vertex Engineering

The Naval Science & Technological Laboratory (NSTL), a DRDO laboratory based in Visakhapatnam, signed two Licensing Agreements for Transfer of Technology (LAToT) on August 21, 2026. The agreements cover the Submarine Fired Decoy (SFD) and technology for the fabrication, installation and commissioning of the LM2500 Gas Turbine.

The first agreement transfers SFD technology to Bharat Dynamics Limited (BDL), supporting indigenous production of a submarine torpedo countermeasure. The second transfers LM2500-related technology to Hyderabad-based Vertex Engineering Systems Pvt. Ltd., expanding Indian industrial capabilities around naval gas-turbine systems.

The two agreements address different areas of naval capability, with the SFD focused on submarine survivability and the LM2500-related transfer supporting naval propulsion infrastructure and lifecycle capabilities.

DRDO signs two naval technology-transfer agreements

The agreements signed by NSTL bring specialised defence technologies into the Indian industrial ecosystem. BDL is the recipient of the SFD technology, while Vertex Engineering Systems has received technology covering fabrication, installation and commissioning associated with the LM2500 Gas Turbine.

Particulars	Details
Agreement date	August 21, 2026
DRDO laboratory	NSTL
Location	Visakhapatnam
SFD recipient	Bharat Dynamics Limited
LM2500 technology recipient	Vertex Engineering Systems Pvt. Ltd.
Vertex location	Hyderabad
Technology-transfer mechanism	LAToT

The transfers are part of the wider effort to increase domestic participation in critical naval technologies, including production, integration and lifecycle support.

What is the Submarine Fired Decoy?

The Submarine Fired Decoy is a defensive countermeasure designed to help protect submarines from incoming homing torpedoes. The system is intended to act as a preferred target, potentially diverting an attacking torpedo away from the submarine.

The SFD therefore forms part of the submarine's soft-kill protection layer. Unlike a hard-kill system that attempts to destroy an incoming weapon, a decoy seeks to interfere with or defeat the torpedo's targeting process.

Why is the SFD important for Indian submarines?

Submarine survivability depends on several layers, including stealth, sonar awareness, threat detection, manoeuvring and countermeasures. An indigenous submarine-fired decoy can strengthen this defensive ecosystem while reducing dependence on external suppliers for a specialised underwater warfare system.

The transfer to BDL also fits its existing capabilities in underwater defence. The company has experience with underwater weapons, including the Varunastra heavyweight torpedo developed by NSTL.

What does the LM2500 technology transfer involve?

The second agreement covers fabrication, installation and commissioning of the LM2500 Gas Turbine and names Vertex Engineering Systems Pvt. Ltd. as the recipient. The wording does not establish that Vertex will manufacture the complete LM2500 engine or receive the underlying intellectual property of the original engine design.

The LM2500 is a GE Aerospace marine gas turbine already used extensively in naval applications. India also has established LM2500 experience through Hindustan Aeronautics Limited, including assembly, testing, repair and overhaul activities.

Why is the LM2500 important for India's Navy?

The LM2500 provides high-power naval propulsion and is already part of India's naval ecosystem. INS Vikrant, for example, uses two LM2500 gas turbines, while the technology has also been used across Indian Navy warships.

Expanding Indian industrial capabilities around fabrication, installation and commissioning can support domestic engineering, integration and lifecycle requirements for naval gas-turbine systems.

What investors should watch

The two agreements highlight the expansion of India's defence-indigenisation ecosystem across underwater weapons, submarine countermeasures and naval propulsion technologies. The participation of both a defence PSU such as BDL and a private engineering company such as Vertex indicates a broader industrialisation model for DRDO-developed technologies.

However, the public announcement does not disclose contract values, production schedules, unit quantities or specific Navy procurement orders. The immediate significance therefore lies in the transfer of technology and expansion of domestic industrial capability rather than any confirmed revenue impact for the companies involved.

Key facts at a glance

Detail	Information
Technology 1	Submarine Fired Decoy
SFD recipient	Bharat Dynamics Limited
SFD purpose	Submarine torpedo countermeasure
Technology 2	LM2500 Gas Turbine fabrication, installation and commissioning
Recipient	Vertex Engineering Systems Pvt. Ltd.
Location	Hyderabad
Strategic focus	Naval indigenisation
SFD relevance	Submarine survivability
LM2500 relevance	Naval propulsion and lifecycle support

What technology has DRDO transferred to Bharat Dynamics Limited?

DRDO's Naval Science & Technological Laboratory has transferred Submarine Fired Decoy (SFD) technology to Bharat Dynamics Limited (BDL) to support indigenous production of submarine torpedo countermeasures.

What is a Submarine Fired Decoy?

A Submarine Fired Decoy is a defensive countermeasure designed to act as a preferred target for incoming homing torpedoes, helping protect the submarine from an attack.

Why is the DRDO SFD technology transfer important?

The technology transfer can strengthen India's indigenous submarine defence capabilities and reduce dependence on external suppliers for specialised underwater warfare systems.

What technology was transferred to Vertex Engineering Systems?

Vertex Engineering Systems received technology covering the fabrication, installation and commissioning of the LM2500 Gas Turbine for naval applications.

Will Vertex Engineering manufacture the complete LM2500 engine?

The available announcement does not establish that Vertex Engineering will manufacture the complete LM2500 engine. The agreement specifically covers fabrication, installation and commissioning.

What is the LM2500 Gas Turbine?

The LM2500 is a marine gas turbine used for high-power naval propulsion and is already part of India's naval ecosystem.

Which companies received DRDO technology transfers?

Bharat Dynamics Limited (BDL) received the Submarine Fired Decoy technology, while Vertex Engineering Systems Pvt. Ltd. received the LM2500-related technology.

Is Bharat Dynamics a defence stock?

Yes, Bharat Dynamics Limited (BDL) is a listed Indian defence company and a major manufacturer of defence systems and equipment.

Why is Bharat Dynamics in the news?

Bharat Dynamics is in the news after receiving Submarine Fired Decoy technology from DRDO's NSTL for indigenous production of a submarine torpedo countermeasure.

Could the DRDO technology transfer benefit Bharat Dynamics?

The agreement could strengthen BDL's portfolio in underwater defence and submarine countermeasure systems, although the announcement does not disclose a specific order value or revenue impact.

Is this a new LM2500 engine developed by DRDO?

No. The announcement concerns technology for fabrication, installation and commissioning of the LM2500 Gas Turbine and should not be interpreted as the development or transfer of the original LM2500 engine design.

What is the main significance of the DRDO agreements?

The agreements expand India's domestic defence-industrial ecosystem by transferring specialised naval technologies to Indian companies for manufacturing, integration and lifecycle support.