DRDO to streamline start-up engagement for stronger defence R&D: MoD

DRDO test facilities opened to industry and related standard operating procedures formulated

The Defence Research and Development Organisation (DRDO) is formulating a new start-up policy to facilitate smoother engagement between the country’s premier military research and development agency and new entrants and entrepreneurs developing cutting-edge technologies, the Ministry of Defence (MoD) said on Monday.

 

“This policy aims to streamline the process of engaging with start-ups and leveraging their innovative ideas for defence applications,” said an official release, adding that it comes at a time when the DRDO has sanctioned 148 new research and development (R&D) projects over the past three years.  “The work on the policy is already at an advanced stage and nearing completion. If everything goes to plan, it should be cleared in a few months’ time,” a source familiar with the matter told Business Standard. The source added that the main focus of the policy is to enhance the ease of doing business for start-ups working with the DRDO, and to strengthen the broader defence innovation ecosystem by building on the organisation’s existing engagement with industry in line with government policy.

 

The move is expected to benefit India’s military technology sector, which, according to market data platform Tracxn, comprises 172 start-ups, including 80 funded firms that have collectively raised $828 million (approximately ₹7,415 crore) in venture capital and private equity as of November 11.

 

The sector has also seen three acquisitions and four initial public offerings. Over the past decade, an average of 12 new military tech start-ups has been launched each year, while 2025 has so far seen the creation of two such firms in India.

 

Under the DRDO’s Technology Development Fund (TDF) scheme, which is meant to encourage participation of public and private industries -- especially micro, small and medium enterprises and start-ups -- in developing defence technology, 26 technologies have been successfully developed, and two of the project systems have been flown in space.

 

“… A corpus of ₹500 crore has been additionally sanctioned towards the TDF scheme with focus towards deep-tech and cutting-edge technologies,” said the MoD.

 

To further boost indigenous R&D, the MoD added that DRDO laboratory test facilities have been opened to industry, and the necessary standard operating procedures have been formulated. Test facilities at 24 DRDO labs have also been uploaded on the Defence Testing Portal, a platform designed to provide industry with more transparent access to available infrastructure.

 

The DRDO has also implemented a Development-cum-Production Partner model to identify potential manufacturing agencies -- through a competitive process across the public and private sectors-- and to transfer technology for meeting production requirements.

 

So far, the organisation has built a pool of 2,000 firms capable of manufacturing sub-systems, systems and equipment. Under this model, DRDO-developed technology is transferred to Indian industry at zero fee, and consultancy services from DRDO scientists are also made available.

 

The DRDO continues to shoulder most of the country’s defence R&D burden. As of February 2025, the agency was executing 292 projects valued at ₹1.17 trillion (₹1,17,162 crore), according to a report of the Parliamentary Standing Committee on Defence.

 

Of these, 48 fall under ‘Mission Mode’ programmes -- the largest category by value, at ₹86,309 crore -- and are aimed at delivering systems to the armed forces within defined timelines for induction.

 

These include projects such as the advanced variant of the Tejas fighter jet and the airborne early warning and control aircraft. A further 176 projects, costing ₹21,625 crore, fall under the ‘Technology Demonstration’ category, with allocations for these initiatives phased across multiple years.