Rise of the defence innovation ecosystem in India

A unique characteristic of iDEX is that it is funded and managed by the Defence Innovation Organisation, whose founding members were HAL and Bharat Electronics
| Photo Credit:
PHOTO COURTESY: DRDO

The headlines around Operation Sindoor focused on India’s assertiveness, the powerful visual of two women officers shaping the narrative, and the munitions used. However, a crucial but less discussed aspect of the operation was the quiet and significant role played by the defence innovation ecosystem in India.

A prominent defence innovation example used in Operation Sindoor was SkyStriker Loitering Munitions, which are suicide drones developed by Bengaluru-based Alpha Design Technologies. This precision-striking drone was used in covert operations, given its low noise. It could carry a 5-10 kg warhead and has a range of 100 km. It was not just about the offensive, drone innovations were crucial in playing defence too. For instance, the D-4 anti-drone system developed by the DRDO was instrumental in neutralising hostile drones by disrupting GPS signals. Indigenously developed innovations were also used for other purposes, such as surveillance and unmanned systems.

While organisations like DRDO have a long history, a key recent catalyst shaping many of the above-discussed innovations is Innovations for Defence Excellence (iDEX), a flagship initiative under the Ministry of Defence launched in 2018. This initiative brings together all the key innovation ecosystem actors, including start-ups, individual innovators, R&D institutions, and academia, to foster self-reliance in defence technologies.

Funding and management

A unique characteristic of iDEX is that it is funded and managed by the Defence Innovation Organisation (DIO), a Section 8 company, whose founding members were Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL). This structure, which has the inclusion of established defence manufacturers anchoring the ecosystem, facilitated a close strategic alignment between emerging innovators and start-ups with the existing defence industrial manufacturers in India, enabling closer commercialisation links for the innovations.

A stage-gated approach to funding the innovations is another key strength of this evolving ecosystem. For early-stage prototyping, through the Support for Prototype and Research Kickstart (SPARK) framework, iDEX supports innovative start-ups with a grant funding of ₹1.50 crore. Those innovations that develop to an advanced stage receive a larger investment support through the iDEX Prime scheme, which provides grants of up to ₹10 crore. To specifically further support Deep Tech innovations in defence, which require more capital investment, in 2024, iDEX launched the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, offering grant support up to ₹25 crore. This stage-gated process ensures funding support spanning from the seed stage to integration in the defence supply chain.

iDEX adopts an open innovation approach, which calls for open participation of innovators from across the country to engage with the challenges of the defence sector. For example, through the Defence India Startup Challenge (DISC), iDEX launches challenges for start-ups to offer solutions to specific technological needs of the Indian Armed Forces. This challenge-driven approach ensures an alignment between the operational needs and innovative solutions developed. In addition, iDEX also conducts Open Challenges, which are more broadly scoped open innovation challenges, where innovators can propose solutions of relevance to the defence sector, not being constrained by the thematic considerations of DISC.

Multi-layered collaboration

Finally, iDEX has facilitated a multi-layered collaboration structure. It involves domestic-global collaboration, for example, iDEX partners with the US Department of Defense’s Innovation Unit to facilitate joint co-development of innovation between Indian and US start-ups. Similarly, the example of SkyStriker discussed earlier was developed through a joint venture between an Indian and an Israeli organisation (Elbit Security Systems). SkyStriker’s example is also an illustration of an MNE (Adani Group) investment in an SME (Alpha Design Technologies) scaling up its innovations. The partnership between DRDO and IIT Delhi to create DRDO Industry Academia Centres of Excellence is a good illustration of government-industry-academia collaboration in this sector.

In essence, through multiple key strategic efforts, iDEX has accelerated the defence innovation ecosystem in India. It has signed over 350 agreements with start-ups as of June 2024. In recognition of its significant contribution to the Indian defence innovation ecosystem, iDEX was given the prestigious Prime Minister Award for Public Policy in the Innovation Category in 2021.

The story of iDEX offers multiple lessons for fostering other similar public investment-supported Deep Tech innovation ecosystem creation. First, having an anchor orchestrator that brings in multiple domain expertise (i.e., HAL and BEL in the above case) relevant for the ecosystem provides both the functional expertise and networks relevant for commercialisation. Second, an open innovation-based challenge-driven approach creates a level playing field for innovators from across the country to participate in the ecosystem.

Third, it is crucial to take a co-creation approach to innovation ecosystem development, drawing on the collaborative strengths of diverse stakeholders — international partners, MNEs, academia, and start-ups. Applying some of these lessons to other deep tech fields could help forge a self-reliant and technologically advanced India that is adept in meeting the challenges of tomorrow.

The writer is a Professor at the Adam Smith Business School, University of Glasgow, UK

Published on May 12, 2025