Indian Defence Startups Now Build Core Military Systems

India's defence startup ecosystem has moved beyond supplying simple parts, with young companies now building complete military systems like drones, missiles, satellites, and launch vehicles.

What Happened

Speaking at the India Today Conclave South 2026, National Security Advisory Board member G. Satheesh Reddy called this growth a revolution that is changing how India makes defence equipment. Startups now control 90 percent of the drone sector and the entire cyber security space, while private industry builds about 12 to 13 different types of missiles along with bombs, tanks, and armoured vehicles. Young entrepreneurs are shifting from seeking basic jobs to building globally competitive products that attract interest from other countries. Government schemes like Innovations for Defence Excellence and the Technology Development Fund have funded over 700 startups and industries to help them move past the development stage.

Private Industry Growth

Changes to the defence acquisition process allow startups that win challenge grants to secure procurement pathways without needing an established revenue history, with orders reaching up to Rs 300 crore. India now has over 25,000 industries working as tier-1 and tier-2 suppliers, alongside more than 130 private companies partnering with DRDO for development and production. Indigenous content in military equipment has jumped from 30 to 35 percent fifteen years ago to 65 to 70 percent today. Defence exports also grew from Rs 23,622 crore last year to Rs 38,458 crore this year.

Context

India has traditionally relied heavily on foreign imports and public sector heavyweights to meet its military hardware needs. Recent policy shifts aim to boost domestic manufacturing and self-reliance in military technology to reduce foreign dependence and build a local industrial base.