Why India Still Pays Russia for Indigenous Konkurs Missiles?

Legacy licensing keeps India paying Russia for Konkurs ATGMs, raising questions amid push for defense self-reliance under Atmanirbhar Bharat.

HYDERABAD/NEW DELHI – As India accelerates its drive toward self-reliance in defense manufacturing under the ambitious “Atmanirbhar Bharat” initiative, one legacy system continues to expose the fine print of international defense deals: the Konkurs anti-tank guided missile (ATGM). Despite being manufactured domestically by Bharat Dynamics Limited (BDL) for over three decades, the Indian government continues to pay royalties to Russia for every unit produced — a lingering cost of Cold War-era licensing agreements.

This paradox — of indigenization with strings attached — raises broader questions about intellectual property rights, technology transfer limitations, and India’s ongoing challenge to achieve true strategic autonomy in its defense ecosystem.

A Cold War Inheritance with Modern Costs

Originally developed in the 1970s by the Soviet Union’s Tula KBP Instrument Design Bureau, the 9M113 Konkurs (NATO designation: AT-5 Spandrel) was inducted into the Indian Army in the 1980s. Designed to destroy tanks equipped with Explosive Reactive Armour (ERA), the Konkurs features wire-guided SACLOS technology with a range of 4 km and a potent tandem HEAT warhead.

By the late '80s, India entered into a technology transfer and licensing agreement with the Soviet Union, allowing BDL to begin licensed production of the missile. Over the decades, BDL scaled up manufacturing at its Bhanur facility, delivering over 25,000 units of the upgraded Konkurs-M variant to the Indian Army — a system still integral to India's BMP-2 Sarath infantry fighting vehicles and portable launchers.

However, buried in the original licensing agreements are perpetual royalty clauses, under which India pays 2-5% of production costs per unit to Russia’s Rosoboronexport or KBP, even though more than 90% of components are now locally sourced.

Indigenized, but Not Independent

BDL and the Ministry of Defence have repeatedly claimed “maximum indigenization” of the Konkurs missile, especially following large procurement deals like the ₹3,131.82 crore ($398 million) contract signed in 2022. Yet, India remains bound by the original Soviet agreement, where full design ownership and source codes were never transferred.

According to defense analysts, India’s reliance on Russian IP continues in subtle but significant ways. Software algorithms, seeker logic, warhead configurations, and certain materials still fall under Russian proprietary control, preventing India from declaring the missile truly indigenous. A 2013 Comptroller and Auditor General (CAG) report had already flagged incomplete technology absorption, citing missing blueprints and withheld testing protocols from Russia.

The result: India manufactures, but doesn’t own the system — a distinction that translates into crores of rupees in annual royalties, even as BDL has become an exporter of the same system to friendly nations.

A Pattern in Indian Defense Procurement

The Konkurs royalty situation is not an outlier. India faces similar royalty burdens in other key platforms:

• T-90 Bhishma tanks (produced by Heavy Vehicles Factory under Russian license)
• Su-30MKI fighter jets (co-produced with HAL)
• Even older aircraft engines and naval systems tied to foreign origin designs
• In each case, despite assembling or even fabricating the majority of components domestically, India continues to pay for foreign IP.

These deals, while historically beneficial for quickly ramping up capability, now undercut India’s strategic and economic autonomy, particularly when modern indigenous alternatives are available.

The Konkurs vs the Future

With over 40,000 Konkurs missiles in Indian inventory, the system will remain operational for years, particularly due to its integration with the Army’s BMP-2 fleet. Its performance during recent India-Pakistan skirmishes in 2025, where it reportedly neutralized several enemy armored platforms, reaffirmed its tactical relevance.

However, its second-generation technology lacks modern features such as fire-and-forget guidance, advanced imaging seekers, and AI-enhanced target discrimination — all standard in newer ATGMs like Israel’s Spike or the U.S. Javelin.

India’s own third-generation Nag and MPATGM systems are under active induction, with the Army expected to receive over 2,300 MPATGMs by the end of 2025. These fully indigenous systems, developed by DRDO, signal the future — but the Konkurs remains the present.

Strategic Implications and the Road Ahead

The Ministry of Defence has acknowledged the issue. Its 2025 Indigenization Roadmap lists 310 import-dependent items — worth ₹7 lakh crore — targeted for localization by December 2025. For legacy systems like the Konkurs, a hybrid upgrade approach is underway. BDL has begun integrating Indian-made thermal imagers, AI-based tracking software, and localized materials to reduce dependency — and potentially, royalty triggers.

But renegotiating royalty clauses remains difficult. As one defense official put it, “Legacy licenses are like old contracts with modern consequences — there’s no clean exit without geopolitical costs.”

Russia remains India’s largest arms supplier, accounting for 58% of all imports, and with the Ukraine war reshaping global alignments, New Delhi is keen to maintain diplomatic balance, not open contentious defense contract disputes.

A Strategic Inflection Point

As India builds toward becoming a defense manufacturing hub — exporting missiles, drones, and radar systems to over 75 countries — the Konkurs royalty saga is both a lesson and a warning.

It reveals how incomplete technology transfers can lock a nation into decades of financial dependency, even as it marches toward self-reliance. It also underscores the need for smarter future licensing deals, preferably structured like the BrahMos joint venture, where India holds a majority stake and co-ownership of IP.

“Licenses are like marriages,” quipped one defense analyst. “Entered for mutual benefit, but the in-laws — in this case, the IP holders — keep collecting dowry forever.”

India may build the Konkurs. It may even improve it. But until it owns the core technology, true self-reliance remains just out of reach — a powerful reminder that Atmanirbharta is not just about making in India, but owning what is made.