Deep Tech

Startups push into India’s defence frontlines, but roadblocks ahead

Anuj Suvarna

August 12, 2025 | 13 Min Read

With procurement reforms and funding on their side, India’s defence startups are making a mark. They, however, face structural barriers in the system they serve.

Key Takeaways

India’s military is now awarding contracts to defence-tech startups, a major shift from its traditionally risk-averse procurement culture
Defence exports have grown 34-fold in a decade, with the private sector contributing over Rs 15,000 crore in 2024–25
Reforms like the Defence Acquisition Procedure and Positive Indigenisation Lists prioritise local manufacturing and limit imports
VC is increasingly backing defence-tech, with big-ticket funding rounds for UAVs, secure electronics, and aerospace manufacturing

In 2012, when Bharat Forge, known for its precision-engineered components with a legacy of over 50 years, showcased its first homegrown gun at the Defence Expo, military officers merely glanced at it before moving on. Chairman Baba Kalyani has recalled in several interviews later that, back then, few believed that a Pune-based Indian automotive parts maker could build an artillery gun.

Fast forward to 2025. Just two months after founding Apollyon Dynamics, a group of 20-year-old students has delivered high-speed, radar-evading kamikaze drones to the Indian Army.

The deal, though small, marks a watershed. For the first time, India’s traditionally risk-averse military is placing bets on startups. The shift comes at a time of deep structural changes taking place in India’s defence sector. After decades of costly imports, the world’s largest democracy is racing to become self-sufficient in weapons manufacturing, while also looking to be a global supplier to allied nations.

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