India is turning to its start-up ecosystem to build advanced military technologies such as AI-powered weapons, drone warfare systems, stealth platforms and space-based surveillance tools, a former senior defence official said on Tuesday.
G Satheesh Reddy, former chairman of DRDO, told the Matrix summit 2025 that more than 1,000 start-ups are now contributing to India's defence and aerospace programmes—up from just a handful in 2016
India is turning to its start-up ecosystem to build advanced military technologies such as AI-powered weapons, drone warfare systems, stealth platforms and space-based surveillance tools, a former senior defence official said on Tuesday.
G Satheesh Reddy, former chairman of the Defence Research and Development Organisation (DRDO), told the Matrix Summit 2025 that more than 1,000 start-ups are now contributing to India's defence and aerospace programmes—up from just a handful in 2016.
Speaking at the event, he revealed how India's defence sector is undergoing a shift powered by start-ups and deep-tech. He emphasised that this steering the country away from legacy models of long defence development cycles, toward agile, high-tech, start-up-led solutions.
“Traditionally, defence meant massive investments, long gestation periods, and dependency on foreign imports. But now, we’re witnessing a shift, an era where start-ups are building entire systems, not just supplying parts,” Reddy said.
He shared that India has more than 1,000 start-ups actively contributing to the defence and aerospace ecosystem, a massive leap from just a handful in 2016. These start-ups are working on technologies like drone-based combat and surveillance systems, AI-powered targeting solutions, signal intelligence, synthetic aperture radar (SAR), hyperspectral imaging and space-based surveillance platforms.
Key enablers of this transformation include government schemes like iDEX, DISC, TDF and SPRINT, which offer funding ranging from ₹1.5 crore to ₹50 crore for emerging tech start-ups. These programmes, Reddy noted, allow defence start-ups to co-develop systems in collaboration with the armed forces and bypass traditional procurement barriers.
“The defence acquisition procedure (DAP) has been reformed to allow direct induction of technologies from start-ups, with the armed forces acting as co-developers or problem owners,” he said. “Even the financial eligibility norms have been relaxed, enabling start-ups to bid for tenders up to ₹300 crore based on tech capability alone.”
He also pointed to the role of institutional mechanisms like the Army Design Bureau, Navy’s Naval Innovation and Indigenisation Organisation (NIIO) and Air Force innovation cells, which now directly interface with start-ups to source tech for field applications. “From autonomous UAVs to AI-based automatic target detection, the armed forces are not just customers anymore, they are partners,” Reddy remarked.
On the space tech front Reddy said, “Space has become the fourth dimension of warfare.” Start-ups are now contributing to India’s space-based surveillance, communications, and threat detection capabilities. Imaging resolutions have improved from 35 cm to 12 cm, enabling sharper intelligence gathering in real time.
He also spoke about platforms like ‘Dare to Dream,’ inspired by A P J Abdul Kalam, which crowdsources problem statements and challenges for the defence sector. Many of the winning entries are transitioned into full-scale projects under TDF or iDEX.
“The nature of warfare has changed. It’s no longer just boots on the ground, it’s hybrid, asymmetric, and tech-first,” Reddy concluded. With deep-tech start-ups stepping into once-exclusive domains like stealth tech, ISR (intelligence, surveillance and reconnaissance) and AI-led decision systems, India is building not just for autonomy but for next-generation battlefield readiness.