India Defence Start-Ups: India’s Defence Secretary Rajesh Kumar Singh said on Thursday that the Ministry of Defence is soon bringing a new system to help defence start-ups get more orders. He explained that many start-ups manage to build their prototypes, but after that they face big trouble because there is no clear way to get more orders from the forces.
Singh also talked about serious gaps in defence manufacturing in the country. He said one of the biggest problems is with engines. The ministry has already started a marine engine project with one of the big industrial companies in India. But when it comes to jet engines, India still needs a big breakthrough. Singh said start-ups could start small by working on smaller jet engines or ramjet technologies before moving to bigger projects.
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“We also want to reform the Defence Acquisition Procedure (DAP) to reduce delays. Currently, it takes 3–4 years from requirement acceptance to contract signing, even for complex platforms. Our aim is to bring this down to under two years,” added Singh, reported Outlook Business.
Singh said Defence Public Sector Units, or DPSUs, still have a big hold on the sector. In 2024-25, they made up about 78% of the total defence production value of ₹1.4 lakh crore, according to ORF numbers. The Ministry now wants a better balance between DPSUs and start-ups.
“On PSU–startup collaboration; one challenge is the incumbency advantage that DPSUs have enjoyed, along with a degree of monopolistic control. In the past, companies like HAL had a “right of first refusal” on any requirement from the services. We are trying to dismantle such monopoly barriers. This will also require a culture change within DPSUs, because sometimes they attempt to manufacture solutions themselves — using taxpayer money even when a ready, cost-effective private sector product exists,” he said.
He pointed out that DPSUs sometimes try to make products themselves, using taxpayer money, even when there is already a good and cheaper product available from a private company. He said this habit needs to change. Right now, the total defence production in the country is worth ₹1.5 lakh crore, and the private sector makes up about 23% of that. But in exports, the private companies are leading, with more than 60% share around ₹23,000 crore out of the total defence exports.
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Singh said this shows two things defence exports are not always too complex, and the private sector is quick and flexible to find buyers in global markets. But there are still problems like licensing issues, too many formalities, and clearances needed from the Ministry of External Affairs.
“We are addressing these by simplifying processes, establishing a single-point contact in the Department of Defence Production, and streamlining export clearances. Our target is ₹50,000 crore in exports by 2030, and we are on track,” he said.
