By Satyabrata Satapathy, Co-founder & CEO, BonV Aero
India’s defence industrial base has never been larger. Annual defence production reached a record ₹1.78 lakh crore in FY 2025–26, up 15.6% year-on-year. The private sector accounted for approximately 24%, or ₹42,000 crore, while defence exports touched a record ₹38,424 crore, according to the Ministry of Defence. Startups are now an increasingly visible part of this growth. Yet anyone who has built hardware for the armed forces knows the hardest distance in defence technology isn’t from idea to prototype. It is from prototype to a product soldiers can rely on, every day, in every condition.
The numbers illustrate the challenge. Since its 2018 launch, Innovations for Defence Excellence (iDEX) has brought about 676 startups, MSMEs, and individual innovators into India’s defence innovation ecosystem. As of February 2026, 548 contracts had been signed and 566 challenges launched.
Of these innovations, 58 prototypes received procurement clearance, with an estimated procurement value of ₹3,853 crore, while the Ministry of Defence announced that 45 procurement contracts worth nearly ₹2,326 crore were signed. These are significant milestones, but they also highlight the challenge of moving from prototype development to procurement and deployment.
So what will it take to bridge this gap?
Indigenous R&D that goes deeper than the airframe. Assembling imported subsystems is not enough to achieve technological self-reliance. The cancellation of contracts for 400 logistics drones over concerns about Chinese-origin components underscored how supply-chain provenance can shape defence procurement. Control over critical software and hardware determines a platform’s security, upgradeability and long-term availability. Flight controllers, propulsion, batteries, communication links and firmware must increasingly be developed and controlled in India. Policy is moving in this direction: DRDO’s allocation rose to ₹29,100 crore in FY 2026–27, with about a quarter of its R&D budget opened to industry, startups and academia. Startups must complement this support with sustained investment in core technology and intellectual property, not merely system integration.
Manufacturing built for volume and consistency. A prototype proves a design; a production line proves a company. Defence buyers need consistent quality, traceable components, qualified suppliers, and assured spares and support over years of service. The System for Advanced Manufacturing Assessment and Rating (SAMAR), developed by the Quality Council of India (QCI) and DRDO, is a step towards assessing manufacturing capabilities and strengthening confidence in the defence supply chain. With around 75% of the FY 2026–27 capital acquisition budget reserved for domestic industry, the demand signal is clear. The challenge is whether startups can invest in tooling, quality systems, supplier development and working capital before large orders arrive, often without certainty about when they will materialise.
Testing and certification that keep pace with innovation. Defence equipment must perform under extreme conditions, and testing must reflect operational realities. At BonV Aero, more than 1,000 days of operational experience with heavy-lift drones in demanding environments have reinforced a fundamental lesson: field conditions expose what laboratory tests miss.
Our work includes lifting a 30 kg payload at 19,024 feet at Umling La in Ladakh. This experience underscores the need to validate performance in the environments where these technologies must operate. Startups need affordable access to government test ranges, high-altitude facilities, and other harsh-environment testing infrastructure, along with clear, time-bound qualification standards. The Ministry of Defence’s revised SOP for using its proof ranges, field firing ranges and test facilities is a welcome step. It waives proof and testing charges for iDEX, TDF, Make and other developmental projects and aims to simplify access for industry. The next priority is a clear pathway from successful testing to qualification and military acceptance.
Collaboration that continues beyond the first contract. User trials with the armed forces are invaluable because soldiers help shape products around operational needs. But successful trials do not guarantee procurement, and an initial order does not ensure sustained demand.
Scaling requires predictable follow-on orders, a faster and more transparent path from Acceptance of Necessity (AoN) to contract, and deeper partnerships with defence public sector undertakings (DPSUs) and larger private firms for integration and production. Closer collaboration between the armed forces and the startup ecosystem can help align operational feedback directly into procurement pathways and manufacturing readiness. This alignment can accelerate the transition from successful trials to scalable, field-ready defence technologies.
India has built the on-ramp for defence innovation. The next phase is to build the highway, connecting indigenous technology with manufacturing depth, credible testing, predictable procurement and sustained demand. If startups, the armed forces, DRDO, DPSUs, private industry and investors align around deployment, homegrown technologies can move from showcase to service at the speed India’s security environment demands.