India’s military technology sector is experiencing an unprecedented surge in funding, marking a pivotal shift in the country’s defence innovation landscape. According to the ‘India Military Tech Report 2025’ released by market intelligence platform Tracxn, annual funding has skyrocketed 61 times over the past decade, with startups raising $192.4 million in 2025 alone—setting a new record for the sector.
The report highlights a dramatic increase in both investment and deal activity. Since 2016, the sector has attracted a total of $611 million across 211 funding rounds. The number of deals has also grown exponentially, from just three in 2016 to 36 in 2023, with 20 already recorded this year.
“India’s defence technology ecosystem is entering a defining phase, shaped by innovation, policy support, and growing investor participation,” said Neha Singh, Co-Founder of Tracxn. This surge in funding reflects a broader trend of technological advancement, with drones, artificial intelligence, robotics, and cybersecurity solutions transitioning from experimental projects to mission-critical applications.
Geographically, Delhi NCR and Bengaluru have emerged as the leading hubs for military tech innovation, with companies in these regions raising $194.6 million and $166.1 million respectively. India now hosts more than 150 active military tech startups, with 76 of them securing equity funding so far. Early-stage companies continue to dominate the funding landscape, with Raphe mPhibr’s $100 million Series-B round leading the way in 2025. Other notable deals include Newspace Research’s $33 million and Sagar Defence Engineering’s $25.4 million.
Late-stage funding is also gaining traction, as evidenced by Big Bang Boom Solutions’ $29.9 million Series-C round and Tonbo Imaging’s $20.4 million Series-D round. This growing investor confidence underscores the sector’s potential to deliver high-impact defence solutions.
Government initiatives such as Atmanirbhar Bharat, the Innovation for Defence Excellence (iDEX) program, and the Defence Industrial Corridors have played a crucial role in accelerating this growth. These policies have not only fostered a supportive ecosystem for startups but also encouraged venture capital firms to invest in the sector. To date, around 110 venture capital firms have backed military tech startups, and four companies have successfully gone public.
As India’s military tech sector matures, consolidation and market refinement are becoming more apparent. The rapid growth in funding and deal activity signals a broader shift in the country’s strategic priorities, with defence innovation increasingly viewed as a cornerstone of national security. This momentum is likely to drive further advancements in cutting-edge military technology, positioning India as a key player in the global defence innovation landscape.