Indian drone makers see demand opportunity in border tensions, boost production

The India-Pakistan conflict has seen both sides deploy drones for warfare and surveillance. The Indian defence forces are known to have deployed Israeli-made so-called suicide drones on 8 May. But given that the tensions are far from ebbing, Indian drone makers are looking to cater to an expected rise in demand for such defence technologies.

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“Our teams are currently deployed in the valley. Many of our customers already use our technology, so we remain on standby, ready to enhance their operational capabilities,” Ankit Mehta, chief executive officer (CEO) of IdeaForge said, adding that due to the sensitive nature of the situation, the company is not privy to how the Indian armed forces are using their assets on the ground.

Mehta also refused to divulge details about the kind of drones – and quantity – that were being sought, saying that the information was sensitive.

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Similarly, IG Drones, a Delhi-based start-up, has ramped up manufacturing efforts in response to the growing demand for defence technology. Shuvam Dash, co-founder of IG Drones said that escalating border tensions have prompted the company to boost production.

Govt procurement

Likely procurements by the armed forces could provide some much-needed relief to drone companies, which have faced a slowdown due to delays in government contracts.

On Friday, IdeaForge reported a ₹26 crore loss in Q4 FY25, marking its third consecutive quarter of losses. Despite these setbacks, the company’s operating revenue rose 15% quarter-on-quarter, reaching ₹20.3 crore. Interestingly, in Q4 FY25, civil contracts accounted for a massive 96% of the company’s revenue, with defence contracts contributing just 4%.

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There is a growing emphasis on the need for Intelligence, Surveillance, and Reconnaissance (ISR) capabilities. Mehta explained, “We believe it’s crucial to have the capability to find, locate, and designate targets that are important for our national security. That’s where ISR capabilities can play a vital role.”

In addition, armed drones and ISR are expected to be increasingly leveraged for retaliatory actions.

“What’s very clear to us is that drones are going to be a de facto part of the infrastructure deployed for security and governance,” said Mehta, emphasising the evolving role of drones in national defence.

Investors like Cornerstone Ventures are doubling down on their belief in the long-term value of drones for national security. Cornerstone Ventures has backed NewSpace Research & Technologies, a key manufacturer in India’s defence drone sector and co-developer of the indigenously built kamikaze drones, recently deployed across the border, according to media reports.

“Large corporations in the defence space typically offer a bouquet of services, and when there’s a ₹10,000– ₹20,000 crore defence budget, about 90% of it goes to those major players. But that’s exactly where the innovation and unique strengths of startups come in,” said Abhishek Prasad, managing partner at Cornerstone Ventures. These niche innovations can be crucial and often lead to partnerships with bigger players, who value the depth of expertise smaller firms bring, Prasad added.

Even so, the road to profitability remains uncertain, as procurement processes continue to evolve—especially since larger players like Tata Advanced Systems Ltd and Adani Defence continue to dominate the space. Aerial platforms remain the focal point of this shift, leaving smaller and emerging firms to carve out niche advantages in a highly-competitive environment.