Niti Aayog Member VK Saraswat Advocates for Enhanced Venture Capital Support in Defence Sector
In a significant address at the Advantage Vidarbha-2026 Business Conclave and Investment Summit, Niti Aayog member and former DRDO director general VK Saraswat called upon venture capitalists to substantially increase their financial backing for Indian defence startups. Saraswat asserted that while these firms have made remarkable progress, they require stronger funding support to achieve sustained growth and scalability in the competitive global landscape.
India's Defence Strategy: Driven by National Requirements, Not Geopolitical Balancing
Speaking with PTI Videos on the sidelines of the event, Saraswat clarified that India's defence approach is fundamentally shaped by its own national security needs rather than external geopolitical considerations. "It is about how we look at our own business requirements. It is not a question of choosing between A and B. It is a question of how do we meet our requirements of security and latest technology in terms of weapons and ensuring it happens," he explained, when questioned about balancing defence ties between major powers like the US and Russia.
He further emphasized that India will continue to advance on its strategic path independently, regardless of shifts in the global geopolitical framework, underscoring a commitment to self-reliance and indigenous development.
Budget 2026-27: Focus on Large-Scale Production and Indigenisation
On the defence allocation in the 2026-27 Union Budget, Saraswat highlighted that it signals a clear focus on large-scale production of weapons and equipment tailored for future warfare requirements. "It is also for indigenisation, for ensuring the private sector gets more participation for bringing down the cost and increasing the rate of production, and ensuring our products become cost effective and competitive," he stated.
He noted that the allocations reflect critical lessons learned from Operation Sindoor, particularly in areas such as weapon selection and manufacturing priorities. "Whether I should go for long range supersonic missiles or standalone weapons that are needed for attacking from a distance. Because the future of war is non-contact warfare and in non contact warfare the technologies that are going to be used are of different nature. This Budget and the R&D initiative which the government has started with the participation of the private sector is totally in that direction," Saraswat elaborated.
Defence Outlay and Capital Expenditure Details
The defence outlay in the 2026-27 Union Budget has been set at Rs 7.85 lakh crore, marking an increase from Rs 6.81 lakh crore in the previous year. Of this total, a substantial Rs 2,19,306 crore has been allocated towards capital expenditure for the armed forces. This funding is designated for the procurement of advanced weapons, aircraft, warships, and other critical military hardware, reinforcing the government's commitment to modernizing defence capabilities.
Strengthening the Startup Ecosystem in Defence
On the topic of defence research and development and startup participation, Saraswat praised the government-backed innovation ecosystems established by the defence ministry, department of science and technology, and department of biotechnology. He noted that these initiatives are instrumental in building a robust pipeline of startups in the defence sector.
"The ecosystem for all of them is basically to promote startup culture. Startups are coming up in a big way because the policies of the Union government are supporting them in a big way. Venture capitals must support defence startups, which (currently) is not as much as it should be," he urged.
Saraswat added that Indian defence startups have matured significantly over time, demonstrating enhanced capabilities and innovation. However, he stressed that they now require stronger financial support from venture capitalists to scale up operations, enhance production capacities, and compete effectively on the international stage. This call to action underscores the critical role of private investment in complementing government efforts to bolster India's defence manufacturing and technological prowess.
