Saraswat of NITI Aayog says that venture capitalists need to provide more assistance to defense firms

VCs must increase funding for defence startups, says NITI Aayog member VK Saraswat

NITI Aayog member and former DRDO Director General VK Saraswat on Sunday called on venture capitalists to step up financial support for Indian defence startups, saying these companies have made significant progress but still need stronger private investment to grow.

Speaking at the Advantage Vidarbha–2026 Business Conclave and Investment Summit, Saraswat said the government has created a supportive ecosystem for defence innovation, but venture capital participation remains lower than required.

“Startups are coming up in a big way because government policies are supporting them. Venture capital must support defence startups more,” he said.

Focus on India’s needs

On India’s expanding defence ties with the United States while maintaining long-standing relations with Russia, Saraswat said the country’s priority is not choosing between partners but meeting its own security and technology needs.

“It is not about choosing between A and B. It is about ensuring we get the latest technology and meet our security requirements,” he said.

Bigger defence push in Budget

Saraswat said the strong defence allocation in the 2026–27 Union Budget signals a shift towards large-scale domestic production of weapons and equipment.

The government has set aside ₹7.85 lakh crore for defence, up from ₹6.81 lakh crore last year. Of this, ₹2.19 lakh crore has been earmarked for capital expenditure, including the purchase of new weapons, aircraft, warships and other military hardware.

He said the focus is on:

• Indigenisation of defence production

• Greater private sector participation

• Faster manufacturing

• Lower costs and globally competitive products

Future warfare and innovation

Saraswat noted that future wars will rely more on non-contact warfare, including long-range missiles and advanced technologies. He said recent budgetary support and R&D initiatives are aligned with these needs.

He also highlighted innovation programmes by the defence ministry, the departments of science and technology, and biotechnology to encourage startups to develop next-generation solutions.

“Indian defence startups have come a long way and should be financially supported for their growth,” Saraswat added.