Over the last three and a half decades, India has transformed from a nation in fiscal crisis to one of the fastest-growing economies in the world. With nearly one-third of the global STEM workforce and a massive startup ecosystem, we believe this trend will only continue to accelerate. Yet economic growth on its own does not guarantee security or sovereignty.

While India possesses immense labor strengths, it relies heavily on imports for strategic sectors including defense and industrial components. Despite being the world’s fifth-largest defense spender, India’s domestic defense ecosystem still depends on foreign tech platforms that limit agility and innovation. Meanwhile, 30% of inputs for automotive, electronics, pharmaceuticals, and chemicals come from China. On top of this, the country faces an urgent need to generate millions of new jobs and redeploy technical talent as AI disrupts traditional IT services, making strategic autonomy both a security and economic imperative.

To bolster Indian resilience, we believe there are two key opportunities for entrepreneurs: defense modernization through innovation and domestic production of software-defined systems, and advanced manufacturing that transforms India into a global strategic industrial partner.

India has all of the components to build a more resilient economy. Doing so requires a renewed innovation ecosystem that incentivizes and rewards founders who are tackling the country’s most critical challenges. We believe that building for resilience is the foundation for durable growth in an era of technological disruption and geopolitical reordering. It’s the most consequential investment opportunity in India today.

Defense Modernization: Building Indigenous Defense Capabilities

There are untapped opportunities for modernization in India’s defense sector. While domestic procurement for defense systems has increased considerably in the last decade under the government’s Make in India initiative, this growth has largely been fueled by state-owned enterprises producing large, high-capability platforms like combat aircraft, missiles, and artillery. The clear gap in India’s defense posture is innovation.

Military capability increasingly relies on the intelligence layers that connect different platforms, fusing distributed data for real-time command and control, logistics, and scenario planning. Today, much of India’s advanced electronic warfare stack is imported, constrained by export controls on defense and dual-use technologies. This creates latency, excess cost, and untenable interdependencies.

To enable Indian resilience and sovereignty, we believe two foundational technologies must be built by a new domestic start-up ecosystem: autonomous systems and electronic capabilities.

Indigenous autonomous systems

Building drones, unmanned ground vehicles, and unmanned surface vessels integrated with local control networks is a strategic necessity because deterrence requires production at scale. Doing so at home is key, as these platforms must be engineered for India’s challenging geospatial conditions (high altitude, heat, dust) and improve through rapid domestic iteration.

Consider Raphe, which is charting a new path to domestic defense production. Co-founders Vikash Mishra and Vivek Mishra have partnered with the government to develop capabilities specifically for Indian defense needs. They’ve built a 650,000 square foot facility, invested in advanced machinery, and assembled top talent from India and beyond to produce systems designed for India’s specific field conditions.

Sovereign electronic warfare capabilities

As conflict becomes increasingly digital, control of the electromagnetic spectrum will be as decisive as firepower. India has capable missile defense systems, but using expensive munitions against small, cheap drones is economically unsustainable. Scaling protection requires electromagnetic capabilities like interoperable radars, software-defined radios, mission computers, lasers and edge-AI modules that can neutralize threats without physical intervention.

By building these capabilities at home through a new generation of defense primes, India will be able to own the core systems that underpin the modern defense and security.

Advanced Manufacturing: Re-Engineering Business Models

Indian resilience also requires long-term economic stability that moves beyond the low-margin model of pure labor arbitrage. To fuel this transformation, we believe India must invest in next-generation manufacturing capabilities by resolving persistent productivity and quality issues among its 65 million small and mid-sized enterprises.

Innovative business models aimed at scaling productivity can unlock this capacity. A new generation of founders are demonstrating this potential as they rethink how to leverage India’s industrial base.

Ayr Energy, for example, is reimagining how power equipment is designed, built, and deployed. When founders Anirudh Reddy, Rahul Arora, and Yashashvi Takallapalli saw U.S. utilities and power project developers facing multi-year waits for critical grid equipment, they realized that India’s underused industrial depth could close the gap. By pairing this with global engineering talent, they have delivered and commissioned equipment up to three times faster than incumbents.

Similarly, Jeh Aerospace has pioneered a new industrial capacity model through their Global Manufacturing Centers. Co-founders Vishal Sanghavi and Venkatesh Mudragalla realized they could relocate idle, high-value Computer Numerical Control (CNC) machines from their customers and staff them with trained Indian engineers, using software and process innovations to deliver custom-designed, high-precision components to U.S. clients.

Axella Biosciences demonstrates yet another approach. Founder Rahul Singhvi keeps R&D and IP development in the U.S. while leveraging India’s deep pharma manufacturing expertise to build scalable, transparent, and AI-enabled production systems.

Rather than traditional outsourcing plays, these are capital-efficient models that use technology and process discipline to transform raw capacity into strategic advantage, connecting India to global markets and strengthening domestic supply chain resilience.

An Innovation Ecosystem for Resilience

Building in defense and manufacturing means confronting realities few founders face, including extended sales cycles, regulatory complexity, and substantial upfront capital requirements.

Success requires the right combination of patient capital, deep partnerships between entrepreneurs, industry players, and policymakers, and a network of founders supported by those who have navigated similar challenges across the world.

At General Catalyst, we’re energized by the scale of this opportunity and are bringing our global learnings and capabilities to help catalyze it. Our conviction runs deep: we’ve partnered with mission-driven founders in the U.S. and Europe, building institutions like Anduril, Helsing, Samsara, and Re:Build that power critical infrastructure and national resilience. We’re committed to standing behind India’s builders as they do the same.