DRDO Opens Testing, Funding and Software Source Codes to Indian Defence Startups and MSMEs

India has unveiled a new set of measures aimed at bringing startups, MSMEs and private manufacturers deeper into the country’s defence research and production ecosystem, with the Defence Research and Development Organisation opening wider access to funding, incubation, testing infrastructure and even selected software source codes developed within DRDO.

The initiatives were announced by Defence Minister Rajnath Singh during VIMARSH 2026, the DRDO-Industry Synergy Meet held in New Delhi on September 15. The Ministry of Defence said the new framework is intended to reduce both technical and financial barriers faced by smaller companies and deep-tech startups seeking to develop technologies for the armed forces.

Lowering the Entry Barrier for Defence Startups

Developing defence technology is significantly more difficult than creating products for most commercial markets. Companies need access to specialised laboratories, environmental and performance testing facilities, certification processes and military-grade infrastructure that can be prohibitively expensive for smaller firms.

Under the new framework, eligible MSMEs and deep-tech startups will receive access to direct funding, incubation support and dedicated DRDO testing facilities. DRDO Headquarters is also introducing measures to simplify procedural requirements, accelerate access to facilities and reduce licensing timelines.

The changes could allow smaller companies to concentrate more of their capital on engineering and product development rather than attempting to independently recreate expensive testing infrastructure. They also create a more direct path between promising prototypes and technologies capable of entering military evaluation and eventual production.

DRDO Opens a Controlled Route to Software Source Codes

One of the most significant announcements concerns software developed by DRDO. A standardised and secure framework has been introduced for sharing DRDO-developed software source codes with licensed industries.

The arrangement is intended to support software-defined defence systems and improve obsolescence management. Modern military platforms increasingly depend on software for functions ranging from communications and electronic warfare to command-and-control, sensors, mission computers and autonomous systems. Access to relevant source code can therefore become important when equipment needs to be upgraded, integrated with new hardware or maintained over several decades.

The framework does not imply unrestricted public release of DRDO software. Access will be provided within a controlled licensing structure, allowing authorised manufacturers to work more closely with DRDO-developed systems while protecting sensitive defence technologies.

Moving Industry Into Research and Design

The broader objective is to change the relationship between DRDO and Indian industry. Rajnath Singh said collaboration should extend beyond manufacturing and cover the entire defence technology chain, including research, design, testing, certification and production.

This is particularly significant for India’s private defence sector. Traditionally, private companies and smaller suppliers often entered defence programmes after major systems had already been designed. The emerging model seeks to involve them earlier, including during technology development and engineering.

The new policy measures therefore place greater emphasis on industry-led research and development, funding and mentorship for startups and MSMEs, cooperation between academia and industry and investment in emerging technologies.

Priority areas highlighted during VIMARSH included artificial intelligence, quantum technologies, hypersonics and directed-energy systems, while drones, cybersecurity and other software-intensive capabilities were also identified as areas where smaller companies could make a substantial contribution.

Technology Transfer Network Continues to Expand

DRDO also used VIMARSH to deepen the transfer of technologies developed within its laboratories to Indian manufacturers. Nine Licensing Agreements for Transfer of Technology were handed over to 13 manufacturing partners, enabling commercial production of defence systems and technologies.

DRDO Chairman Rajesh Kumar Singh said the organisation has now transferred more than 2,300 technologies to over 1,100 industries. Technologies associated with approximately 50 DRDO-developed missiles have also been made available to industry in various forms to broaden manufacturing participation.

Such transfers are important because the development of a defence system does not automatically create the industrial capacity required to manufacture it at scale. Bringing multiple private companies into production can create additional supply chains, reduce dependence on a limited number of manufacturers and make it easier to increase output when military demand rises.

SAMAR 2.0 to Assess Manufacturing Capability

DRDO also signed a contract with the Quality Council of India for SAMAR 2.0 — the System for Advance Manufacturing Assessment and Rating.

The programme will be used to benchmark the manufacturing maturity of domestic defence companies. Such assessments are particularly relevant as an increasing number of smaller companies become suppliers for missiles, aircraft, radars, electronic warfare equipment, armoured vehicles and naval systems where quality assurance and repeatability are critical.

Strategic agreements were also exchanged with the Society of Indian Defence Manufacturers and Laghu Udyog Bharati, aimed at widening DRDO’s engagement with companies beyond the established defence primes and reaching smaller manufacturers across the country.

From Buyer-Seller Relationship to Co-Development

The deeper significance of VIMARSH lies in the attempt to move India’s defence-industrial ecosystem away from a simple buyer-supplier arrangement.

DRDO described the initiative as part of a transition towards a collaborative and co-created technology ecosystem, where research organisations, private manufacturers, startups, academia and the armed forces participate in development rather than operating largely in separate stages of a programme.

That approach is becoming increasingly important as military technology evolves more rapidly. Technologies such as autonomous systems, artificial intelligence, electronic warfare, drones and cyber capabilities can move from laboratory research to operational use much faster than traditional weapons programmes. Smaller technology companies can therefore contribute specialised capabilities that would be difficult for a single large organisation to develop internally.

For India, the challenge will be converting these policy changes into systems that actually reach the armed forces. Providing startups with funding and laboratory access can accelerate experimentation, but successful defence innovation will still depend on timely testing, certification, procurement orders and opportunities for large-scale production.

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