India’s defence ecosystem is entering a new era of innovation strategic shift

India’s defence sector is being shaped by the convergence of structural reforms, digital innovation, and a maturing industrial base. These represent a systemic shift in how the country builds defence capability and secures its strategic interests.

While many of these developments have evolved in parallel—be it the establishment of joint theatre commands, the emergence of defence corridors, or the rise of start-up-led innovation—their convergence in 2025 signals something greater: the early architecture of a more integrated and innovation-led national security framework.

Synergy Through Theatre Commands

At the heart of India’s ongoing defence reform is the creation of joint theatre commands, designed to enhance coordination among the Army, Navy, and Air Force. Currently, the armed forces operate through 17 separate service commands, each shaped by its own operational priorities. The proposed model envisions the creation of four integrated theatre commands that will include structures across land, maritime, air, cyberspace, and aerospace domains.

These commands are not merely collaborative arrangements but are designed to function as mission-oriented formations that centralise planning and operational readiness across all levels of warfare.

India is actively laying the groundwork for next-generation military capabilities through initiatives such as the Defence Cyber Agency, plans for a Defence Cloud, and early pilots in digital twins and predictive maintenance. On the global stage, countries such as the United States are advancing Joint All-Domain Command and Control (JADC2), the UK is developing its Defence AI Strategy, and France is investing in AI-enabled battlefield systems.

An integrated command dashboard offering real-time insights into equipment status, supply chain movements, and procurement activities could further enhance situational awareness, decision-making, and coordination across defence logistics and operations.

Defence Corridors as Manufacturing Hubs and Innovation Hotspots

India’s Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu exemplify how industrial policy is aligning with strategic goals. With investment targets exceeding ₹20,000 crore and participation from over 200 companies, these corridors are now producing advanced munitions, mobility systems, and aerospace components for both domestic and global markets.

A more significant development is the emergence of a co-creation ecosystem, where Defence Public Sector Undertakings (DPSUs), MSMEs, global OEMs, and start-ups collaborate to solve operational challenges. For example, BEL has partnered with start-ups under the iDEX framework to develop AI-based surveillance systems, while HAL is working with private firms on unmanned aerial platforms.

iDEX (Innovations for Defence Excellence) has been instrumental in catalysing this shift. Since 2018, it has supported over 350 start-ups and MSMEs through grants, mentoring, and access to procurement pipelines. These challenge-based innovation models are critical in closing tactical and technological gaps swiftly and cost-effectively.

In parallel, the Ministry of Defence has initiated an overhaul of the Defence Acquisition Procedure (DAP) 2020 to modernise procurement systems in line with operational needs and emerging technologies. This review aligns closely with broader national objectives such as Aatmanirbhar Bharat and the designation of 2025 as the ‘Year of Reforms’.

Its key focus areas include faster acquisition cycles, innovation-led procurement, and greater private sector participation. This signals a shift towards decentralised, collaborative R&D, where start-ups, MSMEs, and academia are not merely vendors but co-creators, actively shaping defence solutions in real time.

The Co-Development Imperative

The traditional vendor-client model in defence manufacturing—characterised by transactional procurement and rigid supply-chain processes—requires a procedural overhaul. The future lies in a shift towards mission-based partnerships, where industry, academia, and the armed forces co-own the problem and co-develop context-driven solutions.

With DRDO’s annual budget now exceeding ₹26,000 crore and a greater emphasis on collaboration, there is real opportunity to strengthen ties between government research bodies and private enterprise. These steps can also attract patient capital into core technologies such as electronic warfare systems, robotics, AI/ML applications, and autonomous platforms.

Encouragingly, this shift is already taking shape. Several DPSUs are establishing innovation cells and satellite R&D centres in key technology clusters across the country. For instance, Bharat Electronics Limited (BEL) has launched innovation labs focused on AI and cyber defence. Similarly, HAL is setting up advanced R&D centres in Nashik and Bengaluru to support projects in unmanned aerial systems and next-generation avionics.

Looking ahead, each theatre could house a dedicated Tech Innovation Cell that collaborates with DRDO, iDEX, and regional start-ups to address real-time, theatre-specific challenges. This will require empowering mid-level leadership across the services with the autonomy, data, and digital tools they need to innovate at the edge.

For example, this could include rolling out mobile-first field applications that enable mid-level leaders to report, review, and respond to issues in real time. Additionally, deploying low-code/no-code platforms could empower department heads to prototype internal tools or automate routine processes without relying on central IT support.

Digital Infrastructure for the Supply Chain

Addressing challenges in the supply chain—such as procurement delays, limited visibility into asset health, and siloed operations—will be key to building a more responsive and mission-ready defence ecosystem.

This could be achieved through a unified digital system, built on secure cloud infrastructure, common data-sharing protocols, and integrated dashboards for the defence supply chain. Such a system could serve multiple functions, including tracking inventory across dispersed depots and providing predictive maintenance alerts for mission-critical equipment.

More importantly, it lays the foundation for joint logistics command models, where the three services can pool and manage resources more efficiently, particularly in contested or resource-constrained environments.

Looking Ahead

India’s approach to defence modernisation appears to be moving well beyond incremental upgrades or isolated production gains. There is a marked shift towards building a more integrated and innovation-led network where industry, technology, and policy are increasingly aligned.

It may now be time to consider whether the next phase of progress lies in exploring deeper cross-sector collaboration and institutional frameworks that support long-term co-development. As challenges become more interconnected, there appears to be growing value in envisioning models that enable shared responsibility, mutual learning, and sustained alignment across sectors.

The path forward involves not only advancing individual capabilities but also enabling diverse actors to collaborate more effectively over time. This could mark the beginning of a new chapter, one in which India is not merely responding to future threats, but actively shaping how the future is secured.