A small technology company can now receive a battlefield problem from the Indian Armed Forces, develop a prototype with government funding, test it with military users and potentially secure a procurement contract.
That pathway—largely unavailable to private innovators less than a decade ago—is emerging as one of the most consequential changes in India’s defence-industrial architecture.
The scale of the transformation is becoming visible. As of February 2026, approximately 676 start-ups, micro, small and medium enterprises, and individual innovators had joined the defence-innovation ecosystem since Innovations for Defence Excellence, or iDEX, was launched in 2018.
The Ministry of Defence reported that 566 challenges had been opened and 548 design-and-development contracts signed. Of the resulting technologies, 58 prototypes—with an estimated procurement value of ₹3,853 crore—had received clearance for acquisition. Forty-five procurement contracts worth nearly ₹2,326 crore had already been concluded.
“These figures demonstrate that innovation is gradually materialising into tangible products and technologies, and the role played by our start-ups and MSMEs in this transformation is steadily gaining strength,” Defence Minister Rajnath Singh said at the National Defence Industries Conclave in March 2026.
He described iDEX and the Acing Development of Innovative Technologies with iDEX, or ADITI, programme as “game-changer initiatives” connecting innovators with the operational requirements of the Armed Forces.
The numbers point to rapid institutional growth. In February 2025, the iDEX platform had engaged 619 start-ups and MSMEs, opened 549 problem statements and signed 430 contracts. The increase to 676 participants and 548 contracts within roughly a year indicates that the programme is moving beyond its experimental phase. More importantly, procurement has started following prototype development—a critical test for any defence-innovation policy.
At the centre of this architecture is iDEX, administered by the Defence Innovation Organisation under the Department of Defence Production. Instead of asking young companies to anticipate military demand, iDEX enables the Services, the Indian Coast Guard, defence public sector undertakings and other security organisations to frame specific problem statements. Start-ups and innovators compete to develop solutions, supported by grants, technical mentoring, access to users, incubation and testing facilities.
The challenge model is significant because defence technology does not function like an ordinary consumer market. A military product must satisfy exacting requirements related to reliability, ruggedisation, security, interoperability and performance in difficult operational environments. Early interaction with the prospective user can reduce the risk of a company developing an impressive technology that does not meet a clearly defined military requirement.
The initial iDEX framework offered assistance of up to ₹1.5 crore, appropriate for comparatively compact prototypes but inadequate for capital-intensive technologies. The government therefore launched iDEX Prime in 2022, raising support for selected high-end projects to as much as ₹10 crore. Its problem statements have included artificial intelligence, advanced imaging, sensor systems, big-data analytics, autonomous unmanned platforms and secure communications.
The escalation in funding reflects a broader understanding that defence innovation cannot be confined to software applications or lightweight subsystems. Developing a radar, propulsion system, autonomous platform, electronic-warfare component or advanced communication system requires specialised equipment, extensive trials and longer development cycles.
ADITI represents the next tier. Launched in March 2024 with an outlay of ₹750 crore for the period from 2023-24 to 2025-26, the scheme offers grants of up to ₹25 crore for critical and strategic technologies. It was designed to support about 30 deep-technology projects and create a “Technology Watch Tool” to align emerging technological capabilities with the future requirements of the Armed Forces.
The first ADITI round included 17 challenges from the Army, Navy, Air Force and Defence Space Agency. Subsequent challenges have covered artificial intelligence, quantum technologies, military communications, anti-drone systems and adaptive camouflage—fields in which technological dependence can create operational and geopolitical vulnerabilities.
“The scheme will nurture the innovation of youth and help the country leap forward in the field of technology,” Rajnath Singh said while launching ADITI. Explaining its strategic rationale, he added: “As times are changing, new technologies are coming into existence. To become a developed country, it is necessary for us to achieve a technological edge.”
Running alongside iDEX is the Technology Development Fund, a Ministry of Defence programme executed by the Defence Research and Development Organisation. TDF supports the indigenous development of defence components, products, systems and technologies by Indian industry, with particular emphasis on start-ups and MSMEs. The maximum funding available for a project has been increased from ₹10 crore to ₹50 crore.
Although the schemes overlap in their emphasis on indigenous innovation, they serve different stages and participants. Standard iDEX grants help innovators prove relatively early-stage ideas; iDEX Prime finances more complex solutions; ADITI targets strategic deep technologies; and TDF uses DRDO’s technical network to support larger, industry-led development. Together, they form an ascending ladder of technological and financial complexity.
TDF has also begun producing operational outcomes. According to a Ministry of Defence review, technologies developed through the programme include systems that have flown aboard Polar Satellite Launch Vehicle missions. The fund now provides grants of up to ₹50 crore for critical technologies that might otherwise remain commercially unattractive because of high development risks and an initially limited customer base.
The expansion of this ecosystem carries strategic as well as industrial implications. Modern conflicts have demonstrated the growing importance of drones, loitering munitions, counter-unmanned systems, electronic warfare, secure communications, artificial intelligence and space-based surveillance. These technologies evolve faster than conventional acquisition cycles. Start-ups can contribute speed and specialised expertise, while the Armed Forces provide operational knowledge, testing environments and assured demand.
Rajnath Singh has placed this effort in the larger context of sovereignty. “Self-reliance in defence is not just a matter of production or economy for us. It is first and foremost a matter of our strategic autonomy and is directly linked to our sovereignty,” he said in October 2025.
Yet the transition from a promising ecosystem to a durable industrial base is not automatic. The headline figure of 676 participating entities measures engagement, not commercial survival. Defence start-ups must contend with long trial schedules, certification demands, restricted markets, uncertain order quantities and the working-capital burden of maintaining specialised teams before revenue begins. Intellectual-property protection, predictable procurement timelines and export clearances will also influence whether successful innovators can scale.
The most revealing numbers, therefore, are not simply the challenges launched or contracts awarded for prototype development, but the 58 prototypes cleared for procurement and the 45 acquisition contracts already signed. They show that the system has begun crossing the so-called “valley of death” between technological demonstration and commercial orders. However, these procurement outcomes still involve only a fraction of the hundreds of innovators and development contracts in the pipeline.
India has successfully created multiple doors through which start-ups and MSMEs can enter defence research. The next phase must ensure that the best technologies move quickly from grant to trial, from trial to order, and from an initial order to sustained production. If that conversion accelerates, iDEX, iDEX Prime, ADITI and TDF could do more than generate prototypes: they could reshape India’s defence supply chains and give the Armed Forces faster access to technologies designed for Indian operational conditions.
