From Defence to Space, India’s Thriving Startup Ecosystem Emerges as a Pillar of Nation-Building

New Delhi  -As India marks a decade of the ‘Startup India’ initiative, the startup movement has evolved far beyond an economic reform. It has become a powerful nation-building force, reshaping how the country builds capabilities, creates opportunities, and instils confidence for the century ahead.

Launched on January 16, 2016, by Prime Minister Narendra Modi, ‘Startup India’ was envisioned as a transformative national programme to promote innovation, encourage entrepreneurship, and drive investment-led growth, with the aim of turning India into a nation of job creators rather than job seekers.

Today, India’s transition from being seen as a global “back office” to an “innovation architect” is not only about technological or defence self-reliance. It is about rebuilding institutions, decentralising opportunity, and embedding innovation into the country’s everyday functioning. What began as ease-of-doing-business reforms has now matured into a comprehensive capability-building framework aligned with the vision of Viksit Bharat 2047.

In defence, startups have moved beyond a narrow security role to contribute to institutional resilience and industrial depth. Through initiatives like iDEX, startups have been directly integrated into the Armed Forces’ procurement and problem-solving processes — an unprecedented shift in post-independence India. This has helped transform defence from a closed, import-dependent sector into a broad-based national manufacturing ecosystem.

The results are tangible. Defence production has surged, exports are at record highs, and private innovation is translating into actual orders. More than 788 industrial licences have been issued to 462 companies, significantly expanding private sector participation. Today, the private sector accounts for nearly 23 per cent of India’s total defence production, with over 16,000 MSMEs embedded in the defence ecosystem. The idea of Atmanirbharta has evolved into a nationwide movement.

Before 2014, defence startups were virtually absent in India. Today, over 1,000 such startups operate across the country, developing mission-critical technologies that were once imported. In a major step towards technological sovereignty, India is developing an indigenous Quantum Positioning System (QPS) for the Indian Navy with support from startups. Bengaluru-based quantum deeptech firm QuBeats won the ADITI 2.0 Defence Challenge, securing a $3 million grant to build the technology.

Similarly, India’s armed forces have transitioned from drone systems reliant on foreign components to fully indigenous platforms. These made-in-India drones were deployed during precision strikes under Operation Sindoor and were designed and manufactured domestically, including in innovation hubs such as Bengaluru. In another first, the Indian Army signed a Rs 168 crore contract with Bengaluru-based startup NewSpace Research & Technologies under iDEX for solar-powered surveillance drones, overcoming endurance limitations of conventional systems.

Beyond defence, startups are expanding what is often described as the nation’s “nervous system” — space and artificial intelligence. From just one space startup in 2014, India now has over 382, following the opening of the space sector to private participation. These startups are strengthening India’s sovereign space intelligence capabilities.

Pixxel, a Bengaluru-based startup, has launched the first satellites of its Firefly constellation — India’s first commercial satellite constellation offering advanced hyperspectral imaging. Meanwhile, GalaxEye’s upcoming Mission Drishti aims to deliver the world’s first multi-sensor Earth-observation satellite, providing India with what has been described as “sovereign eyes” in space.

In artificial intelligence, the IndiaAI Mission is ensuring that India does not merely consume global AI tools but builds its own sovereign ecosystem. Startups such as SarvamAI were selected in 2025 to develop India’s first sovereign large language models, trained on Indian languages and hosted on domestic servers. To democratise AI innovation, the government has onboarded over 38,000 GPUs, offering subsidised access to startups at just Rs 65 per hour, enabling even small-town founders to train advanced AI models.

Recognising the importance of indigenous intellectual capability, the government launched the India Semiconductor Mission and the Design-Linked Incentive (DLI) scheme. Startups like Netrasemi have benefited from this push, securing Rs 107 crore in venture capital funding to develop chips for smart vision, CCTV, and IoT applications.

Policy reforms have also unlocked innovation in geospatial technology. In 2021, the government liberalised mapping regulations, allowing Indian startups and businesses to collect, generate, store, and publish geospatial data within the country. This has spurred advances across agriculture, infrastructure, and governance. Startups such as Satsure are using satellite imagery to provide credit scoring for farmers, while others are delivering plot-level farm advisories using AI and data science.

India’s biotechnology sector has also emerged as a critical pillar of innovation-driven growth. BIRAC’s incubation network now includes 75 BioNEST Centres and 19 E-YUVA Centres, offering more than 9,00,000 sq. ft. of incubation space. These centres have supported over 3,000 entrepreneurs and startups, led to more than 1,300 intellectual property filings, and helped over 800 products reach various stages of market deployment.

The dismantling of the old “Inspector Raj” and its replacement with an “Innovation Raj” has restored agency to Indian entrepreneurs. Through Startup India, startups have been recognised as partners in nation-building rather than mere regulatory entities. The result is an ecosystem focused not just on valuations, but on creating real societal value.

Meanwhile, according to a Prime Minister’s Office statement, Prime Minister Narendra Modi will interact with members of India’s vibrant startup ecosystem on Friday. Selected startup founders will share insights from their entrepreneurial journeys, and the Prime Minister will address the gathering.

With inputs from IANS