Whalesbook
India's urgent need for advanced, domestically made defence technology is closely linked to a fundamental rethinking of modern warfare's economics. Cheap, effective drone swarms present a major challenge to traditional military spending. Their cost-efficiency forces a proactive move towards artificial intelligence and directed energy systems.
The Economic Case for Defence Innovation
Anand Mahindra's call for indigenous AI-enabled High-Power Microwave (HPM) and laser capabilities responds to how global conflicts are changing. The economic reality is stark: cheap kamikaze drones can neutralize assets worth far more than their own cost. This imbalance allows attackers to strain an adversary's resources through attrition using low-cost means, a tactic made easier by widely available commercial drone tech. This vulnerability pushes India to develop its own advanced defence solutions instead of just buying foreign. Directed energy weapons (DEW) are a key area, expected to become a USD 30-40 billion market by 2035.
India's Deep-Tech Goals and iCreate's Role
India's defence tech sector has grown significantly, drawing a record USD 247 million in funding in 2025, bringing total equity investment to USD 711 million. This growth supports 'Make in India' and self-reliance goals, with private sector contribution to defence output now at 27%. iCreate, a leading deep-tech incubator supported by the Gujarat and Indian governments, plays a crucial role. The institution has backed over 900 innovations and supports defence and aerospace startups through incubation, mentoring, and funding. iCreate's focus on deep-tech hardware, seen in its drone challenges, directly supports developing the indigenous components and advanced systems needed for modern air defence.
India's Strategic Pivot and Global Standing
Developing AI-enabled HPM and laser systems marks India's strategic shift towards technological independence. India has successfully tested its own laser-based Directed Energy Weapons (DEW), attracting global attention. However, their effectiveness in actual combat is still being assessed. India joins an exclusive group, including the US, Russia, and China, with such advanced DEW capabilities. The global DEW market is growing fast, with compound annual growth rates (CAGRs) between 11.4% and 17.6%, driven by modernization and counter-drone efforts. Despite progress, India's defence R&D spending, about 1.2% of its budget, trails global averages of 3.4%. India's defence inventory is larger than Pakistan's but still trails China's military capabilities.
Challenges in Defence Procurement
Despite policy reforms like the Defence Acquisition Procedure (DAP) 2020 to speed up procurement and support local production, India's defence buying process remains slow due to lengthy timelines and bureaucracy. Contracts historically take seven to ten years to fulfill, a pace that can't keep up with fast tech changes and military modernization by rivals. Transferring technology, key for self-reliance, has also faced implementation challenges. For HPM and laser systems to move from research to wide use, India must overcome challenges like weak institutional support and poor collaboration between academia, industry, and startups. Scaling up indigenous systems and integrating them into defence plans against advanced threats remains a major operational and logistical hurdle.
Looking Ahead
Focusing on local development, aided by initiatives like iCreate and procurement reforms, shows India's clear aim to build strong domestic defence abilities. The growing global market for directed energy weapons and the impact of AI and drones on warfare create opportunities for innovation. If India can overcome procurement issues and maintain investment in deep-tech R&D, it can greatly boost its strategic independence and become a key player in future defence tech. The next few years will show if these aims can lead to battle-ready systems that can counter evolving threats effectively and affordably.