India’s Private Defence Sector: Evolution and Key Players

India’s defence industry has shifted dramatically from a state monopoly to a dynamic ecosystem of private enterprises and startups. Until the early 2000s, almost all major weapons and platforms were built by government-owned factories and DPSUs. So let's understand India’s Private Defence Sector

In 2001 the government first opened production to private firms (with up to 26% foreign investment), but growth was slow.  By 2017 only about 214 private licences had been granted in the 14 years after liberalization, whereas 128 new licences were issued in just the three years around 2014–17.

With the “Make in India” push (2014 onward) and later Atmanirbhar reforms, India’s defence production surged 174% from 2014 to 2024, and exports hit record highs. In this new era, large private conglomerates have become leading producers: for example, Tata Advanced Systems (TASL) now builds helicopters and radars, and jointly developed the Advanced Towed Artillery Gun System (ATAGS) with DRDO and Bharat Forge. L&T supplies warships and missile systems (its L&T-MBDA JV makes anti-tank guided missiles), and Mahindra & Mahindra produces armoured vehicles and electronics.

Adani Defence & Aerospace – founded 2015 – has rapidly expanded in drones, small arms and ammunition, even acquiring a 51% stake in PLR Systems (an infantry weapons maker) in 2020. Smaller firms like Bharat Forge (Kalyani Group) supply guns and ammunition, Reliance (through partnerships) works on aerospace parts, and dozens of SMEs and Indian-owned joint ventures churn out engines, optics and Avionics. 

In short, private industry now stands shoulder-to-shoulder with the public sector in weapons production.

VC and Private Equity Deals in Defence Tech

This resurgence has attracted increasing venture and private equity funding. In recent years defence-tech startups have raised significant rounds. Notable examples include:

• Big Bang Boom Solutions – a Chennai-based AI/deep-tech firm – raised about $30 million (₹250 crore) in September 2024.

• Agnit Semiconductors (Bengaluru, gallium-nitride chips) – raised $3.5 million in an Oct 2024 seed round.

• Jeh Aerospace (Hyderabad, aerospace manufacturing) – raised roughly $2.5–2.75 million in seed funding (reported Jan 2024)

• Constelli Technologies (Hyderabad, EW signal processing) – raised $3 million in January 2025.

• EyeROV (Kochi, underwater drones) – raised about ₹10 crore (~$1.2 million) in Aug 2024.

• CronAI (Delhi, AI for defense) – has raised about $4 million in Series A funding

• AjnaLens (Mumbai, mixed-reality headsets) – raised $6.3 million seed (2023).

In addition, ideaForge – India’s best-known drone startup – tapped public markets in 2023, raising roughly ₹255 crore (~$30 million) from anchor investors ahead of its IPO.

Not only private VCs but strategic investors are entering the scene. In 2025 Titan Capital (Kunal Bahl’s VC firm) launched a dedicated “defence-tech” investment vertical, explicitly targeting advanced hardware and aerospace startups. Former Defence Secretary Ajay Kumar has also spearheaded a ₹250 crore venture fund for defence/aerospace startups, which closed its first round of commitments soon after launch. Such initiatives reflect growing institutional confidence.

The government itself bolsters funding through programs like the Technology Development Fund (TDF). Since 2022 the TDF has supported dozens of MSMEs and startups – for example, over the last five years it sanctioned 42 projects (₹182.4 crore) for MSMEs and 25 projects (₹59.5 crore) for startups.

In 2023 alone, nearly ₹120 crore was allocated (and ~₹44 crore disbursed) as grants for indigenous defence R&D. Similarly, the iDEX Challenges (also government-run) continue to award development contracts and grants to emerging firms.

Together, these investments – both private and public – are channelling capital into India’s defence innovators.

Policy, FDI and Foreign Collaboration - India’s Private Defence Sector

Behind this surge lies a wave of policy reforms and partnerships. The government has steadily liberalized defence manufacturing: FDI caps were raised (to 74% automatic and even up to 100% under special approvals), offset clauses were introduced, and “positive indigenization” lists (SRIJAN) require import substitution. Two Defence Industrial Corridors (in Tamil Nadu and Uttar Pradesh) have been created to concentrate manufacturing hubs with special incentives. The 2024–25 budget targets further illustrate scale: India aims to reach ₹3 lakh crore in annual defence production and ₹50,000 crore in exports by 2029.

Public–private partnerships are multiplying. For example, the ATAGS artillery contract mentioned above combined DRDO design with private industry partners. Likewise, the approved procurement of HAL’s Rudra/Prachand (LCH) helicopters signals confidence in indigenously built complex aircraft. Defense Public Sector units (like HAL, BEL, BDL) now regularly form joint ventures with private firms and foreign OEMs.

In sum, India’s defence investment landscape is characterized by rising foreign inflows and a strategy of co-development.

Operation Sindoor: A Showcase of Strength

In May 2025, India dramatized this new strength with “Operation Sindoor”. This covert counterterror strike (May 7–8, 2025) was launched in direct response to the April 22 Pahalgam massacre (26 Indian tourists killed by Pakistan-based militants). In a 25-minute strike window on the night of May 7, Indian forces struck nine terrorist camps across the Line of Control (in Pakistan-occupied Kashmir and Pakistan itself).

Foreign Secretary Vikram Misri made clear that the measured strikes were meant to “deter and prevent” further cross-border terrorism, emphasizing that India had the right to respond to protect its civilians. Crucially, Indian forces did not cross the border. All strikes were executed from Indian territory using standoff weapons.

What made Sindoor remarkable was how it highlighted India’s indigenous technology and integration. The operation used loitering “suicide” drones, air-launched and armed, to destroy high-value targets. As the military stated, these loitering munitions “hovered and attacked” enemy radars and missile batteries with surgical precision. Every camp’s infrastructure – bunkers, launch pads, warehouses – was hit without Indian aircraft ever violating Pakistani airspace. By daybreak, wreckage was documented: parts of Chinese PL-15 long-range air-to-air missiles and downed Turkish UAVs were found in the blast zones. These recoveries underscored a message: Pakistan’s most advanced imported weapons were no match for India’s homegrown defences.

Indeed, India’s multi-layered air-defense shield (combining Army and Air Force systems, including short-range surface-to-air missiles like Akash) sprang into action that night.  When Pakistan launched drones and missiles (on May 7–8) in retaliation, the Integrated Counter-UAS grid and surface-to-air network intercepted them without any Indian losses.

Observers hailed Sindoor as proof of India’s technological edge. In summary, Operation Sindoor vividly demonstrated the new reality of India’s military power: it was a textbook example of India striking hard and fast, wholly on its own technological strength, to protect its citizens. Experts noted that such an operation would have been unthinkable a decade ago. Today, however, India’s armed forces – backed by a robust private-tech base and self-developed weapons – proved they can seamlessly integrate innovative solutions (drones, missiles, electronic warfare) into combat.