How Startups are Advancing to India’s Defense Frontlines

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India is the world’s second-largest arms importer, with its imports reflecting perceived threats from both China and Pakistan. However, its imports decreased by 9.3 per cent between 2015–19 and 2020–24, as per the data on international arms transfers published by the Stockholm International Peace Research Institute (Sipri). 

In a mission to reduce dependency, homegrown defense tech startups are on the rise. India’s startup ecosystem is exploding, with over 172,000 startups and counting. A profound transformation is underway in a sector once thought impenetrable: defense and aerospace. While consumer tech and SaaS often steal the spotlight, a new generation of innovators is solving for something far more critical: India’s national security.

Speaking at the TiE Bangalore Matrix 2025 Global Summit, Dr G Satheesh Reddy, former secretary for defense R&D and former DRDO chairman, said, “For decades, India was one of the world’s largest importers of defense equipment, heavily reliant on foreign nations for technologies and systems. Defense was synonymous with long development timelines, heavy engineering, and bureaucratic complexity.”

Traditionally, the defense industry, both globally and in India, was synonymous with massive investments, long development cycles, and delayed inductions.

But now, that story has changed.

“Over the past decade, we have witnessed a quantum leap in indigenous development. India is now developing its own technologies and solutions, making remarkable strides toward self-reliance,” Reddy said. 

Today, Indian firms, especially startups, are playing a critical role in designing and delivering cutting-edge solutions. Indigenous content in defense procurement has surged from 30–35% a decade ago to nearly 65% today.

Shift from PSU Monopoly to Private Participation

Once dominated by defense PSUs HAL (Hindustan Aeronautics Ltd), BEL (Bharat Electronics Ltd), BDL (Bharat Dynamics Ltd), and BEML (Bharat Earth Movers Ltd), India’s defense manufacturing landscape is now shared by over 2,000 private companies, including more than 1,000 startups.

“Defense manufacturing was largely driven by the public sector. Today, that paradigm has shifted. Private startups are now at the core of defense innovation and production,” Reddy said. 

Government schemes like IDEX (Innovations for Defense Excellence), TDF (Technology Development Fund), SPRINT, and ADITI are fueling this momentum, offering funding from ₹1.5 crore up to ₹25 crore for deep-tech innovations.

“With mechanisms like IDEX and TDF, we have encouraged startups in such a way that more than 1,000 are now working in defense and aerospace in a big way,” Reddy said. 

Policy Reforms Enabling Speed

One of the most significant enablers has been the reform of the Defense Acquisition Procedure (DAP). It now allows direct procurement from startups without the typical requirements of past revenues or large order books, especially for contracts up to ₹300 crore.

“Startups can now bid for defense contracts without stringent turnover or past performance requirements, a game-changer for young firms,” Reddy said. 

The armed forces themselves have become partners in co-developing technologies and solutions. Institutions like the Army Design Bureau, Naval Innovation & Indigenisation Organisation, and their Air Force counterparts are working directly with startups to fast-track innovation.

Startups across India, particularly in Bengaluru, are developing a wide range of advanced defense technologies. These include AI-based targeting systems and advanced radar solutions, robust cyber defense and offensive cybersecurity tools, drone surveillance platforms alongside anti-drone jamming systems, innovations in quantum encryption and computing, as well as capabilities in electronic warfare and signal intelligence.

Indian startups are now building offensive drone systems, spoofing technologies, hyperspectral payloads, and cyber defense tools, all developed on home soil, Reddy said.

Some of the notable players include Venetrix, QNu Labs, QpiAI, Signalchip, Lekha Wireless, and Vigantara, who are working on everything from space surveillance to quantum-secure communications.

India’s Role in Warfare has Changed 

Modern warfare is no longer fought with just boots on the ground. Today, it’s hybrid, asymmetric, and increasingly contactless. India’s startups are delivering technologies already deployed in live combat zones, including Operation Sindoor.

“We are entering a new era of high-tech, contactless warfare. These are wars fought with indigenous weapons, proudly built by Indian startups,” Reddy said.

India has also flipped its identity from importer to exporter. In FY 2024–25, defense exports touched ₹23,666 crore, and the target for 2027–28 is a bold ₹50,000 crore.

“India is no longer just a buyer, we’re also becoming an exporter. The world is watching and acknowledging the technological prowess India now offers,” he said.

What Startups Need to Succeed

Despite the progress, Reddy emphasized that startups still need stronger ecosystem support to scale meaningfully.

“To fully realize this potential, three key enablers are needed: mentorship, timely funding, and market access,” he said. 

Mentorship can help young innovators understand defense needs and shape their ideas accordingly. Funding, through the right schemes at the right time, can fast-track development. And market access, especially simplified routes into procurement pipelines, ensures their innovations reach the forces that need them.

If startups align their innovations with strategic priorities, and the ecosystem provides the right support, India can achieve not only self-reliance but also global leadership in defense technology.

The Road Ahead

With a capital procurement budget of ₹1.75 trillion, rising to ₹3 trillion by 2039, India’s defense sector is full of opportunities. 

Emerging areas include high-power lasers and electromagnetic weapons, next-generation underwater communication, advanced propulsion and hypersonic systems, AI-driven cognitive radar and electronic warfare capabilities, as well as innovations in materials science and 3D printing manufacturing.

India now fights its battles under the banner of Atmanirbhar Bharat,  and its startups are no longer auxiliary. They are at the frontlines of building India’s strategic future.