TLDR: Indian defence startups are rapidly transforming the nation’s defence landscape, driving self-reliance, boosting exports, and attracting significant investment. Supported by government policies like the Positive Indigenisation Lists and iDEX, these companies are innovating in critical areas including small arms, aerospace, drones, and quantum technology, with AI and autonomous systems being key growth drivers.
India’s defence sector is undergoing a profound transformation, with a burgeoning ecosystem of startups playing a pivotal role in establishing the nation’s presence on the global map. Once heavily dependent on foreign Original Equipment Manufacturers (OEMs) for critical systems, India is now aggressively pursuing self-reliance in high-value defence manufacturing, a shift powered by robust government initiatives and a surge in private sector innovation.
This paradigm shift is underpinned by the government’s ‘Positive Indigenisation Lists,’ which now encompass over 4,500 components previously imported, opening vast opportunities for domestic startups to develop locally designed, IP-owned solutions meeting stringent defence-grade standards. Further bolstering this movement, the Ministry of Defence is overhauling its procurement process through a revised ‘Defence Acquisition Procedure,’ promising a more ambitious framework to facilitate startup participation.
Key players are emerging as frontrunners in this defence renaissance. Bangalore-based SSS Defence, for instance, is making significant strides in small arms, ammunition, and military optics, with its Saber sniper rifle securing a substantial $50 million export order in 2024. In the aerospace domain, Hyderabad’s Skyroot Aerospace, founded by former ISRO scientists, is pioneering modular, cost-effective, and reusable rockets with its Vikram series. The agility of these startups is evident, with Apollyon Dynamics, a company founded by students, already delivering high-speed, radar-evading kamikaze drones to the Indian Army. Furthermore, QNu Labs has achieved remarkable feats in Quantum Key Distribution, outperforming global competitors.
The ‘Innovations for Defence Excellence (iDEX)’ program, spearheaded by former Defence Secretary Dr. Ajay Kumar, has been particularly impactful. It has democratized participation in military technology development, allowing smaller players to address hundreds of complex challenges simultaneously, a significant departure from the past where only large entities could afford to engage.
The financial landscape for defence tech startups is equally promising. India’s defence market is projected to grow by 48% from $27 billion in 2025 to $40 billion by 2030. Notably, nearly half of this growth, approximately $19 billion, is expected to be driven by new-age technologies such as artificial intelligence, autonomous systems, and quantum computing. Investor interest has surged, with Indian defence tech startups raising $432 million in venture funding by the first half of 2025, with drone and anti-drone technologies alone attracting 71% of this capital. Defence exports have seen an impressive 34-fold increase over the last decade, with the private sector contributing over Rs 15,000 crore in 2024–25.
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While the sector faces structural barriers, the momentum is undeniable. India is also actively pursuing international collaborations, notably with the U.S. through initiatives like COMPACT and the US-India Major Defence Partnership, aiming to create an ‘Indo-U.S. Startup Bridge’ to help Indian startups scale globally. This strategic push, combined with a robust domestic innovation ecosystem, positions India not just as a defence importer, but increasingly as a global supplier and a leader in defence technology innovation.
