Kalyani Strategic Systems Ltd (KSSL), the wholly owned defence arm of Bharat Forge Ltd, and France-based Thales Group signed a Strategic Alliance Agreement on 3 September 2026 to build 70mm rocket systems in India. Signed during Belgian Prime Minister Bart De Wever’s state visit to New Delhi, the pact will create an indigenous industrial capability for both unguided and laser-guided variants of Thales’s combat-proven rockets. The first fully assembled rocket made in India is targeted for early 2027, marking a major step for domestic defence manufacturing and India-Belgium cooperation.
What Is the KSSL-Thales Strategic Alliance Agreement?
A Strategic Alliance Agreement (SAA) is a formal partnership where two companies agree to cooperate on technology, production and market access while remaining independent entities. It is not a merger and does not always create a new joint venture company. In this case, the SAA provides a framework for technology transfer, local production, system integration and distribution of 70mm rocket systems and related equipment.
The agreement was signed in New Delhi on 3 September 2026 between Kalyani Strategic Systems Ltd (KSSL) and Thales. The signing took place on the sidelines of the Belgian state visit led by Prime Minister Bart De Wever, who was accompanied by Defence Minister Theo Francken and 15 Belgian defence companies. Ten industrial agreements were signed during this visit, with the Thales-KSSL pact being the flagship defence deal.
The alliance covers both unguided and laser-guided variants of Thales’s 70mm (2.75 inch) rocket systems, which are already in service with the Indian Armed Forces. The two companies will work to produce the first fully assembled rocket in India by early 2027. Thales will contribute its global expertise in rockets and launchers developed by its Belgian unit, Thales Belgium (formerly Forges de Zeebrugge), while KSSL will use its manufacturing and testing facilities in India and integrate components from Thales’s qualified supply chain to meet international quality standards. The partnership builds on a decade-long relationship between the two companies and is described as a step to create sovereign capability through local value creation and skill development.
What Are 70mm Rocket Systems and Why Do They Matter?
A 70mm rocket system, also called the 2.75 inch rocket, is a family of air-to-ground, ground-to-ground and naval rockets that fills the gap between heavy missiles and unguided guns. It is widely used because it is light, low cost and can be fired from many platforms. The globally known version is the Hydra 70, developed in the United States, and Thales’s system is the European leader in this class.
Thales Belgium offers two main variants covered by the new alliance. The FZ90 is an unguided Folding Fin Aircraft Rocket (FFAR) for area targets. The FZ275 Laser Guided Rocket (LGR) is a precision guided version that uses Semi-Active Laser (SAL) guidance. The rocket has a seeker that follows a laser spot reflected from the target, which can be marked before launch, after launch or by a separate designator on the ground or another aircraft. This allows very high accuracy with low collateral damage.
The system is designed to be compatible with existing launchers and can be used from helicopters, fixed-wing aircraft, drones, ground vehicles and naval vessels. In India, Thales 70mm rockets are already deployed on the Advanced Light Helicopter (ALH) Weapon System Integrated (WSI) Rudra and the Light Combat Helicopter (LCH) Prachand, both built by Hindustan Aeronautics Limited (HAL). Globally, Thales states that its 70mm rockets are used by 70 armed forces in 55 countries, with more than 50 countries operating the broader rocket system.
Newer variants are also promoted as cost-effective counter-drone (counter-UAS) weapons. Unlike expensive surface-to-air missiles, laser-guided 70mm rockets can destroy drones and drone swarms at a fraction of the cost, a capability that has become vital in modern conflicts. The rockets can hit stationary and moving targets, including light armoured vehicles, small boats and soft bunkers.
Key Specifications of the FZ275 LGR
| Feature | Detail |
|---|---|
| Calibre | 70mm (2.75 inch) |
| Length | About 1.8 metres |
| Total weight | 12.7 kg with 4.1 kg warhead |
| Warhead | High Explosive (HE), about 1 kg Composition B, pre-fragmented, lethal radius 9 metres, penetration 6mm steel |
| Guidance | Semi-Active Laser (SAL), compatible with STANAG 3733 laser codes |
| Steering | 4 folding canards at the front |
| Range | 1.5 km to 7 km (up to 8 km in some conditions) |
| Accuracy | Circular Error Probable (CEP) less than 1 metre at 6 km range |
| Launchers | Compatible with standard Thales launchers such as FZ606 (6-tube for helicopters) and FZ800 (7-tube for aircraft) |
The rocket closes a key capability gap. It offers near missile level precision at rocket level cost, which makes it ideal for close air support, anti-armour and now anti-drone missions.
How It Compares to Common Rocket Launchers in India
India operates several rocket systems. The most discussed is Pinaka, a Multi Barrel Rocket Launcher (MBRL) firing 214mm long-range rockets for artillery. The 70mm system is different. It is a short-range, lightweight system for direct attack from aircraft and vehicles, not long-range artillery. Together, they complement each other. Pinaka provides volume fire for the Army, while 70mm rockets give helicopters and light platforms precise, quick strike capability.
How Will the Rockets Be Made in India?
Under the alliance, Thales will bring design know-how, rocket and launcher technology, and access to its established global supply chain from Belgium, where it is the European leader in 70mm systems. KSSL will provide local manufacturing, system integration and testing capacity, including facilities in Pune and Jejuri, Maharashtra, and a major upcoming site.
A central pillar of the manufacturing plan is KSSL’s new Energetics facility being built through its step-down subsidiary Agneyastra Energetics Limited near Madakasira in Sri Sathya Sai District, Andhra Pradesh. The integrated campus spreads over more than 1,000 acres (about 949.65 acres acquired through the Andhra Pradesh Industrial Infrastructure Corporation) and involves a planned investment of ₹1,500 crore over the next 2 to 4 years, with a total commitment of up to ₹2,400 crore in two phases. The groundbreaking took place on 15 May 2026. The complex will house high explosives manufacturing, ammunition filling, gun propellant lines and future capacity for rocket propellants, warheads and space launch energetics. It is expected to generate about 800 direct and 2,500 indirect jobs.
Production will integrate components sourced from Thales’s qualified suppliers while building a local supply chain in India. The goal is to meet domestic requirements of the Indian Armed Forces first and also to serve export markets, positioning India as a second supply source for Thales’s international orders. The Belgian Defence Ministry has noted that this will also strengthen European security of supply.
The alliance also emphasises technology transfer, local value creation and skill development, which are core aims of the government’s Atmanirbhar Bharat and Make in India for the World programmes. KSSL Chief Executive Officer Neelesh Tungar said the pact lays the foundation for indigenous production of next-generation rocket systems using KSSL’s advanced industrial ecosystem. Thales Vice President for India Ankur Kanaglekar said combining Thales’s combat-proven expertise with KSSL’s engineering strengths will enhance India’s operational readiness.
This is not Thales’s first push to make 70mm rockets in India. The company earlier signed a Memorandum of Understanding with Adani Defence and Aerospace in 2024 and an agreement with Bharat Dynamics Limited (BDL) in 2023 for similar co-production. The status of those initiatives remains unclear and no production line has been confirmed. The KSSL pact is now the most concrete step, with a clear target of an India-assembled rocket in early 2027.
KSSL, Bharat Forge and Thales Group: Who Are the Partners?
Kalyani Strategic Systems Ltd (KSSL)
KSSL stands for Kalyani Strategic Systems Limited. It is a wholly owned defence subsidiary of Bharat Forge Limited (BFL), set up as the flagship company to drive the defence and aerospace business of the Kalyani Group. The Kalyani Group has more than five decades of experience in design, engineering, metallurgy and manufacturing. KSSL itself is not separately listed on the stock market, its parent Bharat Forge is listed on the National Stock Exchange and Bombay Stock Exchange.
KSSL is headquartered in Pune, Maharashtra, with manufacturing sites at Pune and Jejuri and testing facilities across India. Its portfolio covers artillery systems, protected vehicles, ammunition, air defence solutions, small arms, marine and defence electronics. Key products include the Bharat 52 towed artillery gun and the Advanced Towed Artillery Gun System (ATAGS) developed with the Defence Research and Development Organisation. In-house research is driven by the Kalyani Centre for Technology and Innovation (KCTI) and the Kalyani Centre for Manufacturing Innovation (KCMI). The company is led by Chief Executive Officer Neelesh Tungar and is part of the group chaired by Baba Kalyani. Its step-down subsidiary Agneyastra Energetics Limited, incorporated on 2 July 2025, will handle energetics and propellants.
Bharat Forge Limited
Bharat Forge Limited is the flagship company of the Kalyani Group, founded in 1961 and headquartered in Pune. It is one of the world’s largest forging companies and has diversified into defence, aerospace and e-mobility. The company is transferring its defence business assets to KSSL to create a focused defence entity, a restructuring valued at about ₹453.3 crore.
Thales Group
Thales Group is a French multinational aerospace, defence and electronics corporation. The name has no Hindi meaning, it is named after the ancient Greek philosopher Thales of Miletus. The company is headquartered in La Défense, Paris, France, and is listed on Euronext Paris. Its history goes back to 1893 as Compagnie Française Thomson-Houston (CFTH). It became Thomson-CSF in 1968 and was renamed Thales in December 2000. The Chairman and Chief Executive Officer is Patrice Caine.
Thales employs more than 83,000 people and reported revenue of about €22.13 billion in 2025. It operates in defence, aerospace, cybersecurity, space and digital identity. Thales Belgium, a 100 percent subsidiary in Herstal, Belgium, is the centre for 70mm rocket development and production. Thales has been present in India since 1953, with its India head office in Noida, Uttar Pradesh, and engineering centres in Bengaluru and other cities. Thales is not an Indian company, it is French, with Thales India Private Limited as its Indian arm.
Strategic Significance for Defence Manufacturing and India-Belgium Ties
The pact directly supports defence manufacturing in India, a priority under Make in India and Atmanirbhar Bharat. India is the world’s largest arms importer and is working to cut import dependence by building domestic capacity and creating export hubs. Local production of a widely used rocket system reduces logistics delays, improves availability for the armed forces and builds resilience against global supply disruptions.
For India, three gains stand out. First, operational readiness. The armed forces already use Thales 70mm rockets, so local assembly ensures faster replenishment and easier integration with existing platforms like Rudra and Prachand. Second, industrial depth. The deal adds rocket energetics and precision guidance to India’s private defence base, which already includes artillery, vehicles and ammunition made by KSSL and other firms such as Tata Advanced Systems, Mahindra Defence and Larsen and Toubro. Third, exports. The alliance is designed for both domestic supply and global sales, advancing the Make in India for the World vision and helping India move from buyer to supplier.
For Thales and Belgium, the benefits are also clear. Thales gains a second production source that can serve international orders, while Belgium deepens defence industrial ties with India beyond its traditional areas of diamonds, chemicals and logistics. The agreement was one of 10 industrial pacts signed during Prime Minister Bart De Wever’s visit, which also covered ammunition production and naval mine countermeasure systems. Belgian officials said the cooperation works both ways, India builds capacity while Europe gains supply security.
The timing matters for modern warfare. With drones now central to battlefield and border threats, affordable precision weapons that can defeat drone swarms are in high global demand. A laser-guided 70mm rocket offers a low cost, high precision answer, making the system attractive to many countries. If KSSL and Thales meet the early 2027 target, India will be well placed to meet both its own needs and a growing world market.
Strategic Alliance vs Joint Venture: What Is the Difference?
Both are forms of business cooperation, but they differ in structure and commitment.
| Feature | Strategic Alliance | Joint Venture |
|---|---|---|
| Legal entity | No new company is required, partners remain independent | A new jointly owned company is often created |
| Purpose | To cooperate on specific technology, production or market access | To build and run a shared business with equity stakes |
| Investment | Limited, mainly technology and facility sharing | Significant capital investment from both sides |
| Control | Each partner controls its own operations | Shared control through a joint board |
| Example in this case | Thales-KSSL SAA for 70mm rockets, a framework for transfer and production | KSSL is also exploring a joint venture with FN Herstal for small arms and counter-drone systems, which would involve a dedicated production centre |
A strategic alliance is more flexible and faster to set up, which is useful for proving technology transfer and local production before committing to a deeper joint venture.
The Way Forward
The next steps will determine whether the framework becomes a full production line. The companies will finalise workshare, localise more components of the supply chain and validate quality at KSSL’s facilities, including the Madakasira energetics campus once it is operational. Successful certification and the rollout of the first India-assembled rocket in early 2027 will be the key milestone to watch. If executed well, the alliance could expand to other rocket variants, smart launchers like the FZ606 and FZ800, and larger export orders, strengthening India’s position as a trusted partner in the global defence supply chain.
Key Takeaways
- Kalyani Strategic Systems Ltd (KSSL), a wholly owned subsidiary of Bharat Forge Ltd, signed a Strategic Alliance Agreement with France-based Thales Group on 3 September 2026 to make 70mm rocket systems in India.
- The alliance covers both unguided FZ90 and laser-guided FZ275 LGR variants and targets the first fully assembled rocket in India by early 2027.
- The FZ275 LGR uses Semi-Active Laser guidance, has a range of 1.5 km to 7 km and accuracy of less than 1 metre CEP at 6 km, and can be used for counter-drone missions.
- Manufacturing will combine Thales Belgium expertise with KSSL’s Pune and Jejuri facilities and the upcoming Agneyastra Energetics campus of over 1,000 acres near Madakasira, Andhra Pradesh, with an investment of ₹1,500 crore.
- Thales 70mm rockets are already used by the Indian Armed Forces on HAL Rudra and HAL Prachand helicopters and by 70 armed forces in 55 countries worldwide.
- The pact was signed during Belgian Prime Minister Bart De Wever’s state visit to India and supports Atmanirbhar Bharat and Make in India for the World, while strengthening India-Belgium defence cooperation.
