The Defence Research and Development Organisation (DRDO) has launched a new Technology Transfer Policy in 2025 to significantly enhance the participation of MSMEs and startups in India’s defense manufacturing sector. The policy introduces streamlined processes and categorizes technologies into Category A for exclusive military use and Category B for dual-use technologies, facilitating faster and more secure technology transfer. It offers substantial financial incentives including waived Transfer of Technology (ToT) fees for selected firms and access to DRDO’s intellectual property and testing facilities. This move aligns with the government’s Atmanirbhar Bharat initiative aimed at strengthening indigenous capabilities and innovation. In the financial year 2024-25, India’s defense production hit a record ₹1.51 lakh crore with an 18% year-on-year growth; defense exports also reached an all-time high of ₹23,622 crore, demonstrating a 12% increase over the prior year. The policy supports accelerated adoption of advanced technologies by MSMEs and startups through government competitions and funds like iDEX and Technology Development Fund, further fostering self-reliance and establishing India as a key player in the global defense market. Recent approvals by the Defence Acquisition Council for over ₹1.1 lakh crore in defense projects underscore this strategic shift toward private sector collaboration and export expansion.