The traditional model of defence contracting — dominated by massive primes like Lockheed Martin, Boeing and RTX (formerly Raytheon) — is under unprecedented pressure. Geopolitical tensions, lessons from conflicts in Ukraine and the Middle East, and rapid advances in AI, autonomy, and software have given rise to a new class of agile, venture-backed companies dubbed ‘neo-primes’. In the United States, firms like Anduril Industries and Palantir Technologies are not just winning contracts; they are forcing a fundamental shift in how wars are fought: from expensive, exquisite platforms to cheap, attritable, software-defined systems.
Back home in India, the question is whether a similar revolution can take root. The defence ecosystem remains heavily tilted towards Defence Public Sector Undertakings (DPSUs) like HAL and BEL, alongside established private conglomerates. Yet government initiatives and a burgeoning startup scene suggest the seeds of Indian neo-primes are already sprouting. Will they challenge the old guard and help India wage war more effectively in the 21st century?
The US Neo-Primes: Agility Meets Arsenal
The term ‘neo-primes’ captures Silicon Valley-style disruptors — Anduril (founded by Palmer Luckey in 2017), Palantir (co-founded by Peter Thiel), and peers like SpaceX, Shield AI, and Saronic — that blend venture capital, rapid iteration, and dual-use tech. Unlike legacy primes focused on hardware-heavy, long-cycle programmes, these companies prioritise software-first architectures, AI-driven autonomy, and scalable, ‘expendable’ systems.
Anduril beat Boeing, Lockheed Martin, and Northrop Grumman for the US Air Force’s collaborative combat aircraft programme. It has secured billion-dollar deals for border surveillance towers, Army command-and-control software, and rocket motors
Anduril’s Lattice operating system exemplifies the shift. It fuses sensors, drones, and effectors across domains into a real-time AI-orchestrated battlefield picture, enabling autonomous swarms and rapid command-and-control. Palantir’s AI Platform and Maven system process vast data for targeting and intelligence. Together, they recently formed a consortium with SpaceX, OpenAI, and others to bid jointly on major Pentagon contracts — directly challenging the Big Five primes.
Anduril’s counter-drone systems and autonomous platforms showcase the software-defined, AI-native approach reshaping US defence.
Evidence of disruption is mounting. Anduril beat Boeing, Lockheed Martin, and Northrop Grumman for the US Air Force’s Collaborative Combat Aircraft (CCA) programme — unmanned ‘loyal wingmen’ designed to accompany piloted jets in high-risk missions. The company has secured billion-dollar deals for border surveillance towers, Army command-and-control software, and rocket motors. Valuations tell the story: Anduril has been valued at tens of billions, while Palantir’s market cap has rivalled or exceeded some legacy contractors.
Critics caution against hype; scaling production remains hard, and neo-primes could eventually inherit the primes’ bureaucratic flaws. Yet the trend is unmistakable. The US is prioritising speed, interoperability, and AI over legacy hardware monocultures
Are they changing how the US wages war? Yes — profoundly. Traditional platforms emphasise perfection and survivability at enormous cost. Neo-primes champion ‘mass’ through cheap, AI-enabled attritable systems: drone swarms, autonomous submarines, and software that turns data into decisions faster than any human chain. The Ukraine war demonstrated the power of cheap drones and electronic warfare; Anduril and Palantir executives openly cite this as validation for “rebooting the Arsenal of Democracy.”
Critics caution against hype — scaling production remains hard, and neo-primes could eventually inherit the primes’ bureaucratic flaws. Yet the trend is unmistakable: the Pentagon is prioritising speed, interoperability, and AI over legacy hardware monocultures.
India’s Defence Ecosystem: Fertile Ground or Rocky Soil?
India’s defence spending is rising (projected around $78 billion for 2025-26), with a strong push for ‘Atmanirbhar Bharat’. Positive indigenisation lists ban imports of hundreds of items, defence corridors boost manufacturing, and FDI norms have been liberalised.
Crucially, iDEX (Innovations for Defence Excellence) — run by the Ministry of Defence — has funnelled grants (up to ₹1.5 crore standard, ₹10 crore under iDEX Prime) to over 300 startups and MSMEs. Programmes like DISC (Defence India Startup Challenges) and Technology Development Fund (TDF) directly link innovators to military requirements.
The private sector’s share of production and exports is growing. Yet DPSUs and a handful of conglomerates still dominate prime contracts. Procurement remains slow, testing facilities are limited, and venture capital is wary of long gestation periods and classified work. Can India nurture its own neo-primes?
The private sector’s share of production and exports is growing. Yet DPSUs and a handful of conglomerates (Tata, L&T) still dominate prime contracts. Procurement remains slow, testing facilities are limited, and venture capital is wary of long gestation periods and classified work. Can India nurture its own neo-primes — agile, software/AI-heavy firms that scale from prototype to battlefield systems?
Promising Candidates are Already Emerging
ideaForge: India’s drone leader (50%+ domestic market share) supplies the armed forces with surveillance and high-altitude UAVs. It went public in 2023 — the first major defence-tech IPO — and is expanding into heavy-lift and AI-enhanced systems. Its track record of deliveries and civil-defence crossover positions it as a potential scaled player.
Fixed-wing and quadcopter platforms of ideaForge power Indian military surveillance and logistics.
India’s drone leader, ideaForge (50%+ domestic market share), supplies the armed forces with surveillance and high-altitude UAVs. It went public in 2023, the first major defence-tech IPO, and is expanding into heavy-lift and AI-enhanced systems. Its track record of deliveries positions it as a potential scaled player
Tonbo Imaging: Specialises in advanced electro-optics, thermal imaging, and AI vision systems for border security and fire control. With Qualcomm backing and an IPO on the horizon, it exemplifies sensor-AI fusion critical for modern targeting and autonomy.
Tonbo’s tactical imaging devices enhance soldier situational awareness and precision.
NewSpace Research and Technologies (NRT): Focused on swarm drones and autonomous systems, NRT has secured Army orders for 100+ swarm UAVs. Backed by iDEX and DRDO grants, it represents the shift toward massed, low-cost autonomous capabilities. NewSpace swarm drones on the tarmac — India’s answer to attritable mass in future conflicts.
Other notables include Flying Wedge Defence & Aerospace (autonomous swarm interceptors), Big Bang Boom Solutions and Indrajaal (AI counter-drone systems), Sagar Defence Engineering (unmanned maritime vehicles), and EyeROV (underwater drones). Over 200 defence-tech startups have collectively raised more than $700 million, with drones, AI, and robotics leading the charge.
Does India Have the Right Environment?
Strengths: Policy tailwinds are strong. iDEX has de-risked early innovation; exemptions from earnest money deposits, Make-II procedures, and patent support lower barriers. Exports have hit record highs, and private-sector participation in exports now exceeds 60%. The ecosystem is moving from components to full systems.
Challenges: Scaling remains the Achilles’ heel. Prototypes are relatively easy; production at ‘neo-prime’ volumes is not. Defence procurement cycles are notoriously long, IP protection concerns persist, and venture funding for late-stage defence tech is thinner than in the US. Talent poaching by global firms and limited access to high-end testing ranges are real hurdles. Unlike the US, where the Pentagon can move fast on ‘Other Transaction Authority’ deals, Indian processes remain rule-bound.
The US experience proves that neo-primes can accelerate innovation and reshape warfare towards cheaper, smarter, more lethal systems. India has the strategic imperative and policy scaffolding. With sustained reforms and patient capital, India can nurture its own cohort of neo-primes, challenging DPSU dominance while delivering Aatmanirbhar capabilities at the speed modern conflict demands
To foster true neo-primes, India must:
- Accelerate acquisition reforms and create dedicated “fast-track” pathways for iDEX graduates.
- Boost private R&D incentives and defence-focused venture funds.
- Deepen public-private partnerships so startups can access military testbeds and data.
- Encourage consortia — much like the US model — pairing drone hardware players with AI/software firms.
India’s Neo-Prime Moment?
The US experience proves that neo-primes can accelerate innovation and reshape warfare towards cheaper, smarter, more lethal systems. India has the strategic imperative (border threats, export ambitions) and policy scaffolding.
Startups like ideaForge, Tonbo Imaging, and NewSpace are already demonstrating capability. With sustained reforms and patient capital, India can nurture its own cohort of neo-primes — challenging DPSU dominance while delivering Aatmanirbhar capabilities at the speed modern conflict demands.
The business of war is changing. The question for New Delhi is not whether disruption will come, but whether Indian innovators will lead it.
–The writer is a globally cited defence analyst based in New Zealand. The views expressed are of the writer and do not necessarily reflect the views of Raksha Anirveda
