Episode Description

For most of the last decade, India's defence sector was an afterthought for the startup and venture world. That has changed decisively since, and the shift has been structural.

India's defence budget for FY27 has risen to ₹7.8 lakh crore, a roughly 15% jump year on year, with the capital modernisation allocation growing even faster, from ₹1.8 lakh crore to ₹2.2 lakh crore. Of that, 75% is now earmarked for domestic procurement, with roughly ₹25,000–30,000 crore specifically reserved for private players and startups. These aren't one-year line items; they reflect a deliberate shift, codified through Positive Indigenisation Lists mandating local sourcing of over 5,000 critical systems by 2029.

What recent conflicts around the world have demonstrated is that modern warfare is asymmetric and technology-led in ways that compress the advantage of traditional industrial scale. A sub-$1,000 FPV drone neutralising a multi-million dollar tank has become an operating assumption that every defence establishment now has to plan around. Responding to that reality demands a fundamentally different industrial base, one built on software, electronics, and systems integration.

India's particular context adds further urgency. Global solutions, built for different terrain, cost structures, and operational conditions, routinely underperform at the altitudes and temperatures India's forces actually operate in. The country needs approaches built from the ground up for its own requirements, which is precisely where technology-first teams have room to build something genuinely consequential.

We've been spending considerable time in this space, meeting founders building across various modalities. The categories that excite us most demand genuine IP and deep technical capability, where incumbent advantage is thinner than it appears and execution speed matters enormously.

We launched Defending India to share what we're learning. In the first episode, Ashray Iyengar unpacks the macro tailwinds, how procurement actually works, and where he sees the most compelling startup opportunities.