How India’s Defence-Tech Startups Are Rewriting the Rules of War
Article by Dr Sudhanshu Kumar
At approximately 4 PM one afternoon in early May 2025, a message landed at a defence-tech startup. Brief. Firm. Laced with urgency. The request was for a deployment of drones. Operation Sindoor was about to begin. But even before the call came, the team was already in a trial run. Their drones, built for night-time surveillance and designed to operate in GPS-denied zones, were not a reaction to the operation. They were the result of months of preparation, built on groundwork laid as part of the company’s participation in the Innovation for Defence Excellence programme. The startup had joined the programme nearly two years earlier.
That sequence is the most important story in Indian defence in a generation. Not the operation itself, though the operation was historic. The most important story is the two years of preparation that preceded the phone call at 4 PM. A startup, working through a government framework, building a product that soldiers needed, being ready when the moment came. Operation Sindoor was the inflection point that pushed defence tech from the margins to the mainstream, exposing India’s dependence on imports and accelerating the shift toward indigenisation. Defence-tech startups raised $68 million in 2025 alone, accounting for about 13 per cent of all deep-tech funding in the country.
India’s defence and security architecture is being quietly rewired, not just in DRDO laboratories and defence public sector units, but in small offices in Bengaluru, Chennai, Mumbai, Hyderabad, and Noida where defence-tech startups are building the next layer of India’s military capability. These young companies are no longer proof of concept. They are supplying operational drones, electro-optics, anti-drone shields, and AI systems that are already in the hands of soldiers, sailors, and airmen.
The Framework That Changed Everything
For decades, India’s defence ecosystem revolved around large public sector units and foreign vendors, with long procurement cycles and limited room for small players. The door to startups opened only after the government deliberately chose to open it.
The cornerstone of that opening is the Innovation for Defence Excellence framework under the Department of Defence Production. iDEX runs Defence India Startup Challenges and Open Challenges where the armed forces post real problem statements and invite startups to solve them. It provides SPARK grants of up to Rs 1.5 crore for early prototypes and up to Rs 10 crore under iDEX Prime for more mature solutions. And it connects successful startups directly to the Army, Navy, Air Force, DPSUs, and DRDO for trials and adoption.
As of early 2026, iDEX has opened over 500 problem statements across DISC, SPRINT, and ADITI editions and signed over 400 contracts with startups, MSMEs, and innovators. Procurement orders worth thousands of crores have been placed by the three services and Defence PSUs for iDEX-developed products. ADITI, the deep-tech tier of iDEX launched in 2024, targets 30 critical and strategic defence technologies, including hypersonic propulsion, directed energy weapons, autonomous swarms, AI in defence, secure communications, and quantum technologies, with each ADITI project eligible for up to Rs 25 crore in grant-in-aid. The startup retains full ownership of the intellectual property developed under iDEX.
The leverage point in this design is the IP ownership provision. Every previous Indian defence procurement model transferred intellectual property to the state or to a public sector unit. iDEX reversed this. The startup that solves the problem owns the solution. That single change restructured the incentives entirely, because a startup that owns its IP can export it, license it, scale it, and attract investor capital against it. Over 2,000 defence and 300 space startups are now driving deep-tech innovation. In emerging technologies like AI, quantum, and drones, Indian startups are producing top-tier solutions. QNu Labs achieved record distances in Quantum Key Distribution, outperforming global competitors. Major companies began R&D without waiting for funding. PSUs, once seen as assembly units, filed over 2,000 patents. The feedback loop runs in one direction: more problems solved, more contracts signed, more IP owned, more investment attracted, more problems solved.
Drones at the Front Line
Nowhere is the impact of defence startups more visible than in unmanned systems. The Army has inducted loitering munitions, kamikaze drones, and surveillance UAVs worth over Rs 5,000 crore from Indian firms including NRT, ideaForge, SMPP, Raphe mPhibr, Adani Defence, Bharat Forge, JSW, A-Vision, and Munitions India. Additional drone procurements with a budget of Rs 3,000 crore were approved by the Defence Acquisition Council in late 2025, facilitating further inductions. A larger Rs 20,000 crore fast-track procurement for drones is expected in 2026.
The non-linear consequence of these numbers deserves attention. Rs 20,000 crore in fast-track drone procurement is not simply a large procurement order. It is a structural shift in how India’s military intends to fight. Before Operation Sindoor, the debate about autonomous systems in Indian defence was largely theoretical. After it, the Army, Navy, and Air Force are signing contracts at a pace that would have been inconceivable two years ago. The startup that had its drones ready at 4 PM on a day in May did not benefit from good fortune. It benefited from two years of iDEX preparation, followed by a government that had already decided to buy what it needed from the companies that had built it.
The Army signed a $20 million deal with drone maker ideaForge for its SWITCH UAV system, a high-altitude, long-endurance surveillance drone designed and built in India. It followed with a Rs 137 crore contract for hybrid mini-UAVs under emergency procurement, indicating that these systems had been battle-tested and proven in operations. The Army also placed its first-ever Rs 200 crore order for a swarm drone system capable of surveillance, electronic warfare, and attacks, on Bengaluru-based startup NewSpace Research and Tech. Noida-based Raphe mPhibr received contracts for swarm drones and load-carrying UAVs to resupply troops at high-altitude locations. These orders move swarming from theory to the battlefield, giving India an indigenous capability that adversaries must now plan for.
Seeing First: The Sensor Revolution
Modern warfare is about who sees first and understands faster. Here, Indian deep-tech startups are upgrading the military’s fundamental capability to perceive its environment. Bengaluru-based Tonbo Imaging develops advanced electro-optic and infrared systems, which are multispectral cameras, thermal imagers, laser range-finders, and gimballed payloads for land, naval, airborne, and missile platforms. Their products give soldiers and perimeter guards clear vision in darkness, smoke, fog, and glare. They equip drones and vehicles with stabilised, AI-assisted imaging for targeting and surveillance. And they provide precision seekers that can guide munitions in their terminal phase.
By embedding AI directly on-sensor for scene interpretation, these systems do not just capture images. They help humans rapidly detect threats and targets. A soldier who receives an AI-interpreted feed rather than raw imagery can make decisions faster, under higher stress, with less training, and at greater ranges. The interconnectedness of this with everything else in the system is what makes it strategically significant. Better sensors feeding into AI command systems feeding into drone controllers feeding into swarm systems creates a layered, adaptive intelligence architecture that no individual component of that chain could produce on its own. Companies like Skylark are building systems that fuse data from ground and air-mounted platforms across land, sea, and air, providing reconnaissance and early warning for beyond-line-of-sight threats and turning large volumes of sensor data into tactical and strategic insights that can be quickly acted upon.
The Anti-Drone Shield India Built Itself
As India and its adversaries adopt drones, the air above the battlefield has become contested in both directions. Startups are filling the defensive gap as effectively as they are filling the offensive one. Chennai-based Big Bang Boom Solutions, founded in 2018, focuses on electronic warfare, AI-driven autonomous systems, and advanced materials. Its flagship Vajra Sentinel anti-drone system uses soft-kill techniques, which are jamming or spoofing of communications and GPS, to safely neutralise hostile drones. It adds hard-kill options through interceptor drones that can exceed 180 km per hour and physically disable or destroy incoming drones or swarms using ramming or fragmentation warheads. The system has secured a contract worth over Rs 200 crore from the Indian Air Force and Army.
That contract figure matters because it represents something more than a procurement decision. It represents the Indian Air Force and Army publicly placing their critical base and asset protection in the hands of a six-year-old startup. That is a statement of institutional confidence in the startup ecosystem that no policy document could make as effectively. In a world where cheap quadcopters can carry explosives or cameras, an indigenous, agile, rapidly improvable counter-drone system is not a nice-to-have. It is a critical vulnerability plug that the market either builds or leaves open.
The Ecosystem That Compounds
Of the approximately $78 million raised by defence-tech startups over the last ten years, $68 million was raised in 2025 alone. This accounted for about 13 per cent of the total $533 million in funding raised by all deep-tech startups in India. That concentration of capital in a single year, into a single sector, triggered by a single operational event, is the most telling economic signal in Indian deep-tech since the early years of the software boom.
The historical parallel is not coincidental. India’s software industry grew from a services export base in the 1990s into a globally competitive product and platform industry over three decades, through a combination of government policy, diaspora capital, and institutional investment in engineering education. India’s defence-tech ecosystem is following a compressed version of the same arc. The iDEX programme has done for defence what the Software Technology Parks of India scheme did for software: created a structured pathway from idea to market with government backing at the critical early stage. Before Operation Sindoor, there was some movement toward improving tech sovereignty, particularly around cybersecurity, but it was fairly scattered and patchy. Today, the focus has clearly shifted toward indigenisation and tech sovereignty.
Private space companies like Skyroot Aerospace and Agnikul Cosmos are reshaping the strategic backdrop in parallel. Skyroot became the first Indian private company to launch a rocket, and Agnikul built the world’s first single-piece 3D-printed rocket engine, launching its Agnibaan rocket from India’s first private launch pad. These capabilities support small satellite constellations for communications, intelligence, surveillance, reconnaissance, and navigation, which are the core elements of any future network-centric warfare architecture. As these launch services mature, defence customers will be able to deploy tailored satellites faster and more cheaply, with Indian firms at the helm of the entire value chain from design to orbit. iDEX fostered unprecedented collaboration among the armed forces, DRDO, PSUs, and other departments, working together as equals rather than in silos. That cultural shift, from a procurement system that treated startups as vendors of last resort to one that treats them as partners of first choice, is the biggest structural change the iDEX era has produced.
The Road Ahead
Despite the extraordinary momentum, the challenges are real. Scaling from prototype to mass adoption remains difficult for many startups, which need working capital, predictable order books, and integration support to survive the valley between a successful trial and a large-scale procurement contract. Certification, testing, and integration with legacy platforms can be slow and complex. The competition for skilled engineers from Big Tech and global defence firms puts pressure on small teams to retain the talent their products depend on.
The policy direction is increasingly aligned with addressing these gaps. iDEX Prime, the ADITI deep-tech challenge, and the Ministry of Defence’s target of 70 per cent self-reliance in weaponry by 2027 all push the system toward absorbing more startup innovation at scale. The Rs 20,000 crore fast-track drone procurement expected in 2026 is the largest single signal yet that the procurement system is serious about moving at startup speed rather than traditional defence acquisition speed. The global UAV market is projected to exceed $45 billion by 2030, with persistent platforms gaining prominence. India, which was almost absent from this market as a supplier five years ago, is now a credible participant with combat-proven systems, an active procurement pipeline, and an iDEX-backed innovation ecosystem generating new capability faster than any previous era in Indian defence.
The Nervous System India Has Been Building
India’s traditional defence structure, comprising large state-owned factories, DRDO laboratories, and imported high-end platforms, is being overlaid with a network of nimble, AI-driven, hardware-software startups. Drones from ideaForge, NewSpace, and Raphe are flying patrols. Optronics from Tonbo are helping soldiers see in darkness and smoke. AI products from firms like Skylark are turning raw sensor data into actionable decisions. Anti-drone shields from Big Bang Boom Solutions are guarding bases and convoys. Private rockets from Skyroot and Agnikul are building the launch infrastructure that will eventually put India’s own defence satellites into orbit on India’s own schedule.
This is what a modern defence architecture looks like. Not a single monolith designed by a committee and built over decades. An ecosystem, where startups act as the nervous system, sensing, deciding, and adapting at the edge, faster than any centralised system can respond. The phone call at 4 PM that told a startup its drones were needed was not a coincidence. It was the product of a deliberate policy choice made six years earlier to open India’s most sensitive industrial domain to the most agile actors in its economy. The drones were ready. The soldiers used them. The adversary was struck. If India sustains this policy direction and continues investing in this ecosystem, its defence-tech startups will not just plug gaps in existing capability. They will define how India fights, deters, and secures itself in the decades to come.
