India’s defence innovation ecosystem has moved beyond the stage of government-funded experiments, with hundreds of start-ups and MSMEs now working on military-defined problems and dozens of technologies progressing towards actual procurement. At the centre of this transformation is Innovations for Defence Excellence (iDEX), the government-backed framework launched in 2018 to connect start-ups, MSMEs and individual innovators with the operational requirements of the Armed Forces and other security organisations.
The scale of the programme has expanded significantly. As of February 2026, around 676 start-ups, MSMEs and individual innovators had joined the defence innovation ecosystem since iDEX was launched.
In a statement, the Ministry of Defence had said that 566 challenges had been launched and 548 design-and-development contracts signed. Of the technologies developed through these initiatives, 58 prototypes, with an estimated procurement value of around Rs 3,853 crore, had received clearance for procurement.
More importantly, 45 procurement contracts worth nearly Rs 2,326 crore had already been signed.
For India’s defence start-up ecosystem, that final transition, from a problem statement and prototype to an actual procurement contract — could be more significant than the headline number of participating companies.
Addressing the gathering at the National Defence Industries Conclave in New Delhi on March 19, 2026, Defence Minister Rajnath Singh said, “These figures demonstrate that innovation is gradually materialising into tangible products & technologies, and the role played by our start-ups & MSMEs in this transformation is steadily gaining strength.”
What iDEX changed
Before the iDEX model, defence innovation majorly operated through established institutions and companies. The framework of iDEX created a formal route for smaller technology companies and individual innovators to participate in solving specific military requirements.
The Armed Forces, Indian Coast Guard, Defence Space Agency, defence public sector undertakings and other security organisations identify a particular operational requirement. Start-ups and innovators can then compete to develop solutions to those challenges.
Selected companies receive financial assistance as well as access to technical mentoring, incubation and testing facilities. The approach is important as defence technology operates differently from consumer technology.
A product may work technically but still fail to meet military requirements relating to reliability, ruggedisation, security, interoperability or performance in demanding operational environments. By connecting innovators with military users and specific operational requirements at an early stage, iDEX seeks to reduce the gap between developing a technology and making it usable for defence purposes.
From Rs 1.5 crore grants to Rs 25 crore for deep tech
The government’s funding support has expanded as the programme has moved into increasingly complex technologies. The original iDEX framework provided assistance of up to Rs 1.5 crore. In 2022, the government launched iDEX Prime, increasing support for selected high-end projects to as much as Rs 10 crore.
Its problem statements have covered technologies including artificial intelligence, advanced imaging, sensors, big-data analytics, autonomous unmanned platforms and secure communications. The expansion in funding shows the higher costs involved in developing sophisticated defence systems.
A software-based solution or relatively compact subsystem can require considerably less investment than a radar, propulsion system, autonomous platform, electronic-warfare component or advanced communication system.
The government subsequently created another layer through Acing Development of Innovative Technologies with iDEX (ADITI). Launched in March 2024, ADITI had an outlay of Rs 750 crore for 2023-24 to 2025-26 and provides grants of up to Rs 25 crore for critical and strategic technologies. The programme was designed to support around 30 deep-technology projects and establish a “Technology Watch Tool” to align emerging technologies with the future requirements of the Armed Forces.
ADITI expands the technology focus
The first ADITI round featured 17 challenges from the Army, Navy, Air Force and Defence Space Agency. Subsequent challenges have covered areas including artificial intelligence, quantum technologies, military communications, anti-drone systems and adaptive camouflage.
At the March 2026 National Defence Industries Conclave, Singh launched the fourth edition of ADITI challenges, alongside the 14th edition of the Defence India Start-up Challenge (DISC-14). Together, the two programmes launched 107 new problem statements — 82 under DISC-14 and 25 under ADITI Challenges 4.0. The challenges came from the Defence Forces, Indian Coast Guard and Defence Space Agency.
Launching ADITI, Singh described iDEX and ADITI as “game-changer initiatives” for connecting innovators with the specific requirements of the Armed Forces.
“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,” he said.
TDF adds another funding route
iDEX is not the only government mechanism supporting indigenous defence technology. The Technology Development Fund (TDF), a Ministry of Defence programme executed by the Defence Research and Development Organisation (DRDO), supports Indian industry in developing defence components, products, systems and technologies, with particular interest in start-ups and MSMEs.
The maximum funding available under TDF has been increased from Rs 10 crore to Rs 50 crore.
The Ministry of Defence has cited operational outcomes from TDF-supported development. According to a ministry review, technologies developed through the programme include systems that have flown aboard Polar Satellite Launch Vehicle missions. The different programmes therefore operate at different levels of technological and financial complexity.
The standard iDEX framework supports early-stage development, iDEX Prime provides larger assistance for high-end projects, ADITI focuses on critical and strategic deep technologies, while TDF supports industry-led technology development through DRDO’s technical network.
DPSUs get their own innovation pipeline
The government’s latest push is also attempting to bring start-ups and MSMEs deeper into the supply chains of defence public sector undertakings. At the March 2026 conclave, a separate initiative featuring 101 innovation challenges from DPSUs was launched. The participating companies will also provide mentorship and testing facilities to winning start-ups, along with opportunities for potential integration into their supply chains.
This could provide another route for smaller companies to move from technology development into the wider defence manufacturing ecosystem. The government’s objective is not only to create new defence products but also to establish stronger connections between start-ups, MSMEs and established defence manufacturers.
The MSME integration push
The Defence Minister also stressed on the importance of connecting smaller companies with larger industries and with one another. He described this as two forms of integration.
Horizontal integration involves MSMEs from different sectors connecting and collaborating. Vertical integration involves MSMEs partnering with large-scale industries and developing capabilities in emerging technologies such as artificial intelligence, automation, robotics and additive manufacturing.
“Our MSMEs must advance towards the adoption of Industry 4.0,” Singh said.
According to the Defence Minister, combining both forms of integration is necessary to create a stronger innovation ecosystem.
From 619 participants to 676
The growth of the iDEX ecosystem becomes clearer when compared with the previous year. In February 2025, the iDEX platform had engaged 619 start-ups and MSMEs, launched 549 problem statements and signed 430 contracts. By February 2026, participation had risen to approximately 676 start-ups, MSMEs and individual innovators. The number of challenges launched stood at 566, while signed contracts had increased to 548.
Of the technologies developed, 58 prototypes had received procurement clearance and 45 procurement contracts had already been signed. That indicates that at least some technologies are progressing beyond the development stage and entering the acquisition process.
The real test: Can prototypes become businesses?
For defence start-ups, winning an innovation challenge is only one part of the journey. A company must develop the prototype, undergo testing and meet the requirements of its potential military user before it can reach procurement. The 58 prototypes cleared for procurement and 45 procurement contracts show that this transition is happening.
But the figures also underline the scale of the challenge ahead.
Hundreds of innovators have entered the ecosystem and hundreds of development contracts have been signed, while procurement contracts represent a smaller subset of those projects. For the ecosystem to produce durable defence companies, successful innovators will need to move beyond initial procurement and build the capacity to manufacture and supply at scale.
This is particularly important for start-ups because defence development involves long testing cycles, specialised capabilities and significant development costs.