The helicopter first flew in 1992; its development was prolonged due to multiple factors including the Indian Army's requirement for design changes, budget restrictions, and sanctions placed on India following the 1998 Pokhran-II nuclear tests.

[12] Development problems arose due to changing military demands and a funding shortfall in the wake of the 1991 Indian economic crisis.

[17][18] The HAL Rudra, earlier known as Dhruv-WSI (Weapons Systems Integrated), is an attack variant designed for the Indian Army.

[19] Development was sanctioned in December 1998[20] and the prototype first flew on 16 August 2007; it is to be armed with both anti-tank and anti-aircraft missiles, and a 20-mm turret-mounted cannon.

[22] In addition to the Dhruv-WSI, HAL is also developing the light combat helicopter (LCH) based on the Dhruv for the Indian Armed Forces.

The LCH will also have forward-looking infrared (FLIR), a charge-coupled device (CCD) camera, and a target acquisition system with laser rangefinder and thermal vision.

[23] In 2005, following a crash landing of a Dhruv, the entire fleet was grounded when it was discovered to have been caused by excessive vibration of the tail rotor.

[24][25] In April 2007, a report published by the Indian Committee of Defence noted the Dhruv as one of four "focus areas" identified as having high export potential.

[34] IAI has also developed targeting systems and an electronic warfare suite for the Dhruv, as well as avionics for day-and-night flight observation.

[27] HAL's claim that the Dhruv is indigenous has been challenged by 5h3 Comptroller and Auditor General of India, who reported that as of August 2010 the helicopter was: "...against the envisaged indigenisation level of 50% (by 2008), 90% of the value of material used in each ALH is still imported from foreign suppliers".

[35] In September 2010, it was reported that the Dhruv's Integrated Dynamic System (IDS), which combines several key rotor control functions into a single module carrying the engine's power to the rotors,[9] was suffering from excessive wear, necessitating frequent replacement; as a consequence the cruising speed had been restricted to 250 km/h and high-altitude performance was lessened as well.

[44]The Dhruv is capable of flying at high altitudes, as it was an Army requirement for the helicopter to be able operate in the Siachen Glacier and Kashmir regions.

The proposed anti-submarine warfare (ASW) variant had been deemed unsuitable by the Navy, which was reportedly dissatisfied with the folding blade performance and maintenance record.

[51][52] In 2015, HAL modified the foldable rotor's design to allow the Dhruv to be carried on board light frigates; several Indian Navy helicopters shall receive this modification.

[56] On 12 November 2013, the Indian Navy commissioned their first Dhruv squadron (INAS 322, Guardians); Vice Admiral Sinha stated that "In the Navy, Dhruv helicopters had transformed into an advanced search and rescue (SAR) helicopter, which is also used for missions like heliborne operations, and armed patrol with night vision devices".

[44] In March 2011, India's Directorate General of Civil Aviation released a proposed airworthiness directive asking all civilian Dhruv operators to temporarily ground their aircraft due to cracks potentially forming in the tail area, and recommended reinforcing affected areas.

[61] In October 2011, Jharkhand's regional government appealed for Mil Mi-17 helicopters as operations of their Dhruvs had been disrupted by prolonged maintenance delays and a major crash.

[65] In February 2012, HAL reported that the Indian Army and Air Force had ordered a further 159 units of Dhruv helicopters.

[80] Myanmar: In 2007, Amnesty International stated it possessed evidence that India planned to transfer two Dhruvs to Burma, and pointed to the use of European-sourced components as a possible violation of the European Union (EU) arms embargo against that country.

[94] Flight certification for Europe and North America is also being planned in order to tap the large civilian market there.

[103] Argentina: The Argentinian Ministry of Defense signed a Letter of Intent (LOI) to procure the Dhruv for the Armed Forces of the Argentine Republic on July 20, 2023.

[104][105] Chile: The Dhruv participated in a Chilean tender for eight to ten twin-engined helicopters, conducting a series of evaluation flights to demonstrate the capabilities of its avionics and flight performance; however, it lost out to the Bell 412,[106][107] although there were media accusations of unfair pressure being exercised by the US Government to favour Bell.

[94][108] HAL has secured an order from the Ecuadorian Air Force (EAF) for seven Dhruvs, amidst strong competition from Elbit, Eurocopter and Kazan.

[112] Following the crash of one of the Dhruvs in October 2009, Ecuador reportedly considered returning their six helicopters to HAL amid claims of being unfit for service;[113] EAF commander Genl.

[115] By October 2015, a total of four Ecuadorian Dhruvs had crashed reportedly due to mechanical equipment and Ecuador grounded the type.

[116] In October 2015 Ecuador cancelled the contract and withdrew the surviving helicopters from service, non-delivery of parts and high accident rate were cited.

[119] A HAL spokesman said that while maintenance was supposed to be done by the EAF due to the warranty period being expired, the company was willing to assist them to make sure that the Dhruvs were operational.

[120] Same in performance to the Mk.3 however, has additional equipment such as a cabin mountain MG, High Intensity Search Light and a loud hailer.

The requirement would be fulfilled through the Strategic Partnership (SP) model including an Indian and a foreign Original Equipment Manufacturer (OEM) under the Make in India initiative.

[150] On 20 October 2024, a report from The Economic Times revealed that the prototype of Utility Helicopters-Marine (UH-M) helicopter is under construction while the first flight is expected by May 2025.