Venture capitalists must step up funding support for defence startups, says Niti Aayog’s VK Saraswat

Niti Aayog member and former DRDO director general VK Saraswat on Sunday said venture capitalists must increase financial support for Indian defence startups, asserting that these firms have come a long way but require stronger funding backing for sustained growth.Speaking with PTI Videos on the sidelines of the Advantage Vidarbha-2026 Business Conclave and Investment Summit, Saraswat said India’s defence approach is driven by national requirements rather than geopolitical balancing.“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 said, when asked about balancing defence ties between the US and Russia.He said India will continue to progress on its path irrespective of shifts in the global geopolitical framework.On the defence allocation in the 2026-27 Union Budget, Saraswat said it signals a focus on large-scale production of weapons and equipment required 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 said.He said the allocations reflect lessons learnt in Operation Sindoor, particularly in 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,” he said.The defence outlay in the 2026-27 Union Budget stood at Rs 7.85 lakh crore, up from Rs 6.81 lakh crore last year. Of this, Rs 2,19,306 crore has been allocated towards capital expenditure for the armed forces, including procurement of weapons, aircraft, warships and military hardware.On defence research and development and startup participation, Saraswat said government-backed innovation ecosystems created by the defence ministry, department of science and technology and department of biotechnology are helping build a strong startup pipeline.“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 said.He added that Indian defence startups have matured significantly and require stronger financial support to scale up.