India’s defence Start-Up ecosystem is undergoing a profound transformation, moving far beyond component supply and emerging as a major force behind the development of advanced military technologies and complete weapon systems.

Speaking at the India Today Conclave – South 2026, G. Satheesh Reddy, Member of the National Security Advisory Board and former DRDO Chairman, described the rise of defence and aerospace Start-Ups as a revolution that is reshaping how India designs, develops and manufactures military capabilities.

According to Reddy, sectors once dominated by established defence organisations and large industrial groups are increasingly being led by young technology companies.

He noted that around 90% of India’s drone sector is now driven by Start-Ups, while cyber security has become almost entirely Start-Up-led.

Indian Start-Ups are also developing satellites, launch vehicles and sophisticated payload technologies, including synthetic aperture radar and hyperspectral imaging systems, reflecting a growing capability in both defence and space-related applications.

The shift extends beyond niche technologies. Reddy said private industry is now manufacturing complete defence platforms and weapon systems, including missiles, bombs, tanks, armoured vehicles and artillery systems.

He revealed that roughly 12 to 13 missile programs are currently being executed by private-sector manufacturers, underscoring the expanding role of industry in areas that were previously the preserve of the public sector.

Reddy highlighted a major change in entrepreneurial thinking. Earlier generations often sought stable employment or operated as ancillary suppliers to large government-owned companies.

Today’s entrepreneurs, however, are increasingly focused on creating original products capable of competing in international markets.

He said several Indian Start-Ups are already developing technologies that are attracting attention from overseas companies and foreign governments, demonstrating the growing competitiveness of India's indigenous innovation ecosystem.

One of the biggest challenges for defence Start-Ups remains the transition from prototype development to serial production.

To bridge this gap, the government has introduced multiple support mechanisms, including the Innovations for Defence Excellence (iDEX) initiative and DRDO’s Technology Development Fund.

Reddy said iDEX alone has supported more than 620 Start-Ups, while over 700 Start-Ups and industries have collectively received funding through various government-backed schemes.

He added that reforms to defence procurement procedures are helping successful innovators move more quickly from demonstration to acquisition.

Under existing provisions, Start-Ups that successfully complete iDEX or Technology Development Fund challenges gain a clearer pathway into procurement programmes and can secure contracts worth up to ₹300 crore even without an established revenue track record.

India’s wider defence manufacturing base has also expanded substantially.

Reddy said more than 25,000 firms now operate as Tier-1 and Tier-2 suppliers within the defence ecosystem, while over 130 private companies are working alongside DRDO as development-cum-production partners.

This represents a significant departure from the traditional model in which state-owned entities dominated the transition from research and development to manufacturing. The increasing role of private industry has coincided with a sharp rise in indigenous content within military equipment.

Reddy said indigenous content has increased from roughly 30-35% around 15 years ago to approximately 65-70% today, reflecting the success of long-term self-reliance efforts.

He also pointed to growing confidence within the armed forces in domestically developed systems, a factor that has helped accelerate the adoption of indigenous technologies.

The expansion of private industry and Start-Ups is simultaneously strengthening India’s position within global defence supply chains.

Reddy noted that defence exports increased from ₹23,622 crore last year to ₹38,458 crore this year, highlighting the rapid growth of India’s international footprint.

The broader trend aligns with India's ambition to become a major global defence exporter, supported by growing demand for indigenous systems ranging from missiles and drones to radar and electronic warfare technologies.

As Indian defence products gain acceptance overseas, the next challenge will be ensuring that today’s Start-Ups can evolve into large-scale defence technology firms capable of designing, manufacturing and sustaining advanced military systems for both domestic and international customers.

The success of that transition could determine whether India’s current Start-Up boom develops into a lasting strategic industrial advantage and cements the country's emergence as a leading defence manufacturing power.

Agencies