Industrial groups such as Tata, Larsen and Toubro and also Mahindra and Mahindra, are chipping away at the state monopoly on defence with aggressive bidding, company officials said.

"We are asking the government to give weightage to the private sector in critical technology areas, as India cannot forever depend on foreign vendors," said Sujit Haridas, who heads the defence wing of the Confederation of Indian Industry trade lobby.

India in 1991 began moving away from a stringently state-run economy. In 2002, the government invited the private sector into defence and allowed direct foreign investment of up to 26 percent in military projects.

Non-government firms, however, were initially relegated to making just trucks and jeeps.

"Things have changed. Today 15 licences have been issued, and today (Larsen and Toubro) can manufacture arms and ammunition," Haridas said.

Indian private firms at a global defence fair in New Delhi last week offered products not only to the Indian government but to 300 rivals from 21 nations.

Mahindra and Mahindra makes sensors, multi-barrel rocket launchers, armoured vehicles and mobile missile launchers and is boasting of an international profile.

"Mahindra Defence System has tied up with four Israeli and one Swiss firm to make climate-control for T-90 tanks, bullet-proof vehicles, armoured vehicles and surveillance systems," said Khutub Hai, who leads the company's defence division.

"The alliances range from supplier agreement to licensed manufacture in India," Hai said.

Daryl Gomes, an executive from Tata's electronics division, said it would soon deliver to the Indian army indigenously designed Pinaka multi-barrel rocket launchers.

The Pinaka can fire a salvo of 12 rockets with 1.2 tonnes of explosives to a range of 40 kilometres (25 miles) in 40 seconds to an area stretching 350 square kilometres (135 square miles).

Gomes said his company was negotiating with an Israeli firm for new technology to give the Pinaka more teeth.

Tata Power said it was also collaborating with the Indian army on electronic warfare networks, air defence and naval combat systems.

Its subsidiary Nelco is making Israeli-designed ground senros and infra-red detectors in a transfer of technology deal.

Tata and Larsen and Toubro are jointly making mobile missile launchers for India's surface-to-air Akash (Sky) missile and multi-target Trishul (Trident), Gomes said.

The Confederation of Indian Industry said it was pressuring the government to allow private sector participation to build a comprehensive missile defence system, India's top military priority.

"Even today India imports 70 percent of its technology and so the private sector must be allowed to mature to develop such products," Haridas said.

"Of course, it does not make sense to develop each and every component and so there is no harm to some imports and tie-ups," he said.

But he conceded the Indian defence industry, while buying technology, was not attracting foreign investment.

"It is too early for that," Haridas said.

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