DRDO Unveils New Push to Bring MSMEs and Start-ups Into India’s Defence Technology Ecosystem

New Delhi, September 15, 2026: India is stepping up efforts to build a more integrated and self-reliant defence manufacturing ecosystem, with the government placing MSMEs and deep-tech start-ups at the centre of the country’s next phase of defence innovation.

At the VIMARSH 2026 DRDO-Industry Synergy Meet in New Delhi, Defence Minister Rajnath Singh unveiled a series of policy initiatives aimed at reducing the technical and financial barriers faced by smaller companies seeking to enter the defence sector.

The initiatives include direct funding, incubation support, dedicated access to DRDO testing facilities and a new framework for securely sharing DRDO-developed software source codes with licensed industries. The objective is to accelerate innovation, improve technology absorption and strengthen India's domestic defence supply chain.

From technology development to an integrated defence ecosystem

The significance of VIMARSH 2026 goes beyond individual technology transfers. The government is seeking to change the way India's defence establishment and private industry work together.

Rajnath Singh said DRDO-industry collaboration should no longer be restricted to manufacturing. Instead, cooperation should extend across the entire value chain—from research and design to testing, certification and manufacturing.

The underlying model is one of complementary  capabilities: DRDO contributes scientific knowledge and defence technologies, established industry provides manufacturing scale, start-ups contribute innovation and agility, while India's young talent pool supplies the next generation of technological capabilities.

This approach could potentially make the defence industry less dependent on a small number of large manufacturers and create more opportunities for smaller technology companies to participate in complex defence programmes.

New policy support for MSMEs and deep-tech start-ups

One of the most important announcements at VIMARSH 2026 is the effort to lower the entry barriers for MSMEs and deep-tech start-ups.

The new framework is designed around several forms of support:

• Direct funding for promising companies
• Incubation support to help technologies move towards maturity
• Dedicated access to DRDO testing facilities
• Greater emphasis on industry-led research and development
• Funding and mentorship for start-ups and MSMEs
• Stronger academia-industry collaboration
• Opportunities to work on emerging technologies such as artificial intelligence, quantum computing, hypersonics and directed-energy systems.

For smaller companies, access to testing and validation facilities can be particularly important. Defence technologies often need to meet demanding operational, reliability and certification requirements before they can enter service. Providing structured access to testing infrastructure could therefore help promising technologies move more efficiently from laboratory concepts towards deployable systems.

A new framework for sharing defence software source code

Another significant initiative unveiled at the event is a standardised and secure framework for sharing DRDO-developed software source codes with licensee industries.

The move is intended to support the development of software-defined defence capabilities and help address technology obsolescence.

As modern military systems increasingly depend on software, secure access to relevant source code can become important for maintaining, adapting and upgrading systems over their operational lifetimes.

The framework therefore represents an attempt to make the technology-transfer process more relevant to today's increasingly software-intensive defence environment.

Nine technology-transfer agreements handed to 13 manufacturers

The event also saw nine Licensing Agreements for Transfer of Technology (LAToTs) handed over to 13 manufacturing partners.

These agreements are intended to enable commercial production of state-of-the-art defence systems.

Technology transfer is an important component of India's defence-indigenisation strategy because it allows technologies developed through public-sector research to move into industrial production.

The government says the expansion of technology transfer has already helped establish parallel production lines for meeting the requirements of the armed forces while also benefiting MSMEs and expanding India's previously limited manufacturing base.

According to Defence Secretary and Secretary, Department of Defence R&D, Rajesh Kumar Singh, more than 2,300 technology transfers have so far been handed over to more than 1,100 industries. He also said technologies relating to approximately 50 DRDO-developed missiles have been made available to industry to encourage greater participation.

Industry outreach gets a further push

VIMARSH 2026 also sought to broaden participation beyond established defence companies.

Strategic MoUs were exchanged with the Society of Indian Defence Manufacturers (SIDM) and Laghu Udyog Bharati (LUB) to expand industry outreach and encourage grassroots participation.

DRDO also signed a contract with the Quality Council of India for System for Advance Manufacturing Assessment and Rating (SAMAR) version 2.0.

The system is intended to benchmark the manufacturing maturity of domestic defence enterprises.

Such standardisation can help provide a clearer picture of the capabilities and maturity levels of companies operating within the domestic defence manufacturing ecosystem.

India's defence transition: From importer to exporter

The policy push comes against the backdrop of India's stated ambition to transition from a defence importer to a defence exporter.

Rajnath Singh specifically highlighted areas such as drone technology, artificial intelligence and cybersecurity where MSMEs and start-ups could accelerate innovation and strengthen India's technological and strategic capabilities.

He described MSMEs as both the backbone of India's economy and a critical component of the defence ecosystem, while stressing the importance of quality, delivery, innovation, global standards and partnerships with larger companies.

The broader objective is to develop a defence industrial base capable not only of satisfying domestic requirements but also of competing in international markets.

Defence reforms creating space for private innovation

The government has pointed to a series of reforms undertaken in recent years to reduce India's dependence on defence imports.

These include:

• Positive Indigenisation Lists
• Make in India
• iDEX
• ADITI
• Allocation of 25% of the defence R&D budget to the private sector
• Grants for start-ups through the Technology Development Fund.

According to the Defence Minister, these measures have helped create a new ecosystem in which start-ups can develop solutions based on actual operational requirements.

The emphasis on operational requirements is particularly important. Rather than innovation being developed in isolation, the ecosystem is designed to connect technology developers with the needs of India's armed forces.

VIMARSH's bigger message: From buyer-seller to co-creation

The theme of VIMARSH 2026 was “Varta se Vikas”, and the event was designed to connect commercial innovation with national defence readiness.

Rajesh Kumar Singh described the objective as moving India's defence ecosystem away from a traditional transactional buyer-seller relationship towards a collaborative, co-created technology ecosystem.

That shift could be significant for emerging defence technologies, where development cycles can be complex and close interaction between researchers, manufacturers and end users is often necessary.

Focus on faster technology absorption

The technical sessions at VIMARSH 2026 covered roadmaps across several major DRDO technological clusters, including:

• Aeronautical Systems
• Missiles
• Armaments
• Microelectronics
• Naval Systems

DRDO headquarters also introduced initiatives aimed at simplifying procedural compliance, accelerating access to facilities and reducing licensing timelines.

A high-level panel involving DRDO, the Department of Defence Production and the armed forces discussed ways to accelerate technology absorption, optimise Development-cum-Production Partner models and speed up the induction of indigenous technologies into active service.

The focus on speed is important because developing a technology is only one part of the defence innovation cycle. Its value ultimately depends on how efficiently it can be tested, certified, manufactured and inducted.

Preparing for the technologies of future warfare

A particularly forward-looking aspect of the initiative is its focus on technologies expected to shape future military capabilities.

The policy initiatives explicitly identify AI, quantum computing, hypersonics and directed energy as areas where investment and collaboration should be encouraged.

Rajnath Singh stressed that technological leadership would increasingly determine strategic advantage in future warfare, arguing that companies investing in emerging technologies today could become tomorrow's technology leaders.

For India's start-up ecosystem, this potentially opens a much wider field than conventional defence manufacturing. Companies working in artificial intelligence, advanced computing, autonomous systems, cybersecurity and other deep-tech fields could increasingly find opportunities within defence programmes.

A long-term vision for 2047

The initiatives announced at VIMARSH 2026 form part of a larger vision linked to Viksit Bharat 2047.

According to Rajnath Singh, India's goal by 2047 is to achieve self-reliance in critical technologies, substantially increase indigenous content, achieve multi-fold growth in defence exports and establish a robust presence in global supply chains.

This means the ambition extends beyond simply replacing imported defence equipment.

The larger objective is to build an ecosystem in which India can research, design, develop, manufacture and export advanced defence technologies while maintaining control over strategically important capabilities.

DRDO's growing technology-transfer footprint

The scale of technology transfer highlighted at VIMARSH provides an indication of how the ecosystem is evolving.

With more than 2,300 technology transfers involving over 1,100 industries, DRDO's research is increasingly being connected with private and industrial manufacturing capabilities.

The next challenge is to deepen this network—particularly by bringing more MSMEs and start-ups into the supply chain.

Smaller firms can play an important role in specialised components, subsystems and niche technologies. Rajnath Singh specifically highlighted their role in developing components and subsystems alongside major defence systems.

More than a defence manufacturing programme

VIMARSH 2026 ultimately reflects an attempt to build a broader national defence innovation ecosystem.

The event brought together more than 250 defence industry leaders, industry chamber representatives, senior civil and military officials and DRDO scientists, with the Secretary of the Department for Promotion of Industry and Internal Trade also participating.

The presence of such a broad group underlines the increasingly interconnected nature of India's defence technology ambitions.

The government's message is clear: building an Aatmanirbhar defence sector will require more than government laboratories and large defence manufacturers. It will require start-ups, MSMEs, academia, established companies, researchers and the armed forces to work together.

What VIMARSH 2026 could mean for India's defence industry

The immediate announcements at VIMARSH 2026 can be viewed as pieces of a larger strategy:

Lower barriers → more start-ups and MSMEs → greater innovation → faster technology transfer → stronger domestic manufacturing → higher indigenous content → greater export potential.

Whether this translates into sustained technological leadership will depend on how effectively the new frameworks are implemented and how quickly technologies can move from research and prototypes into reliable, scalable production.

But the direction is unmistakable. India is seeking to move from a defence ecosystem centred primarily on procurement towards one increasingly based on domestic innovation, collaborative development and industrial co-creation.

As India works towards its 2047 objectives, the ability to connect DRDO's technological capabilities with the speed and innovation of private industry could become one of the defining factors in building a globally competitive Indian defence-industrial base.