India’s startup revolution is no longer merely an economic phenomenon;it has become a nation-building instrument, reshaping how the India creates capability, opportunity, and confidence for the next century.
The transition from a global “back-office” to an “innovation architect” is not just about sovereignty in defense or technology. It is about reconstructing national institutions, decentralizing opportunity, and embedding innovation into the everyday functioning of India. Under the Modi Government, what began as ease-of-doing-business reforms has evolved into a capability-building architecture for Viksit Bharat 2047.
Building the National Shield (Defense & Drones)
Defense startups are often viewed through the lens of security, but their deeper contribution is to institutional resilience and industrial depth.
Through iDEX, startups have been integrated into the Armed Forces’ procurement and problem-solving processes, something unprecedented in India’s post-independence history. This has transformed defense from a closed, import-oriented sector into a distributed national manufacturing ecosystem.
4The impact is visible and measurable. Defence production has surged, exports are at record highs, and private innovation is finally translating into real orders. Over 788 industrial licenses have been issued to 462 companies, dramatically increasing private sector participation
4Today, the private sector contributes nearly 23% of India’s total defence production, with more than 16,000 MSMEs integrated into the defence ecosystem. What was once a slogan, Atmanirbharta, has become a nationwide movement.
4Before 2014, defence startups in India were virtually non-existent. Today, over 1,000 defence startups operate across the country. These startups are not peripheral players; they are developing mission-critical technologies once sosurced from abroad.
4In a move to end dependency on foreign GPS, India is developing an indigenous Quantum Positioning System (QPS) with the help of startup for the Indian Navy. Indian quantum deeptechstartupQuBeats has won the prestigious ADITI 2.0 Defence Challenge with a grant of USD 3 million to build this tech for our Navy.
4Similarly, India’s armed forces have shifted from foreign-component-heavy drones to fully indigenous drone systems, which were deployed during precision strikes in Operation Sindoor, designed and manufactured in India, including hubs like Bengaluru.
4The government has taken a new step in unmanned defence, the Indian Army signed a Rs168 crore contract with Bengaluru-based startupNewSpace Research & Technologies under iDEX for solar-powered surveillance drones. This marks the first time the Army is inducting solar-powered unmanned aircraft, overcoming endurance limitations of battery- and fuel-based systems.
Expanding the Nation’s Nervous System (Space & AI)
Space and AI startups are extending the sensory and cognitive infrastructure of India.The number of Space Start-Ups was just 1 in 2014 , after 2014 opening the space sector to private participation has led to the emergence of over 382 space startups. Today India’s space startups are strengthening India’s sovereign space intelligence.
4Bengaluru-based Pixxel has launched the first satellites of its Firefly constellation, the nation’s first commercial satellite constellation, delivering world-leading hyperspectral imaging.
4Similarly, the coming launch of GalaxEye’s Mission Drishtiwill provide the nation with “sovereign eyes” with the world’s first multi-sensor Earth-observation satellite. These “sovereign eyes” are not only about independence, they enhance India’s ability to serve citizens more effectively.
4In artificial intelligence, the IndiaAI Mission is ensuring India does not merely consume global AI tools but builds its own Sovereign AI ecosystem. Startups like SarvamAI were selected in 2025 to develop India’s first sovereign LLMs, trained on Indian languages and hosted on Indian servers
4To democratize AI innovation, the government has onboarded over 38,000 GPUs, offering subsidized access to startups at just Rs65 per hour, enabling even small-town founders to train world-class AI models.
Laying the Digital and Physical Bedrock (Semiconductors, Mapping &AgTech)
4Recognising that true nation building requires indigenous “brains,” the government launched the India Semiconductor Mission (ISM) and the DLI scheme. Startups like Netrasemi, supported under the chip design programme, have secured Rs107 crore in VC funding to develop chips for smart vision, CCTV, and IoT applications.
4Simultaneously, in 2021 the government has decided to ease the mapping policy. And allowedlocal startups and businesses to collect, generate, store, publish and update geospatial data of the country but within its territorial boundaries.
4This has unlocked innovation across agriculture, infrastructure, and governance. Startupslike Satsureare using satellite imagery to provide “Credit Scoring” for farmers. Some startups are using satellite imagery, AI and data science to deliver plot-level farm advisories to smallholders.
The Living Revolution Biotechnology
India’s biotechnology sector has emerged as a key pillar of economic growth and innovation. The sector’s regional landscape is also evolving.
4BIRAC’s Incubation network has expanded to comprise 75 BioNEST Centres and 19 E-YUVA Centres contributing to a cumulative incubation space exceeding 9,00,000 sq. ft. and supporting over 3000+ entrepreneurs & Start-ups, more than 1300 IPs have been filed by the incubatees, and over 800 products have reached various stages of market deployment.
The dismantling of the Inspector Raj and its replacement with an Innovation Raj did more than reduce friction, it restored agency to Indian entrepreneurs. Through Startup India, startups were formally acknowledged as nation-builders, not regulatory subjects. The result is an ecosystem focused not just on valuation, but on value creation for society.