Indian spacetech startups are shifting focus from purely commercial use cases to defence-led applications. Increasing geopolitical tensions and slow enterprise adoption are making them pivot to government and defence contracts. But in doing so, founders say they are being forced to make tough choices on which countries to work with and which ones to avoid.

Founders and investors told ET that startups are simply following demand. Defence offers clearer budgets, faster procurement, and immediate revenue unlike commercial markets, which require scaling constellations. That takes time.

Companies have repositioned their technology and started research and development catering to newer use cases. Capabilities such as missile tracking, camouflage detection, maritime surveillance and border monitoring are now central to their offerings, even when the underlying tech remains unchanged.

Bengaluru-based Digantara Industries, which began with space debris tracking, has expanded into surveillance and intelligence applications.

“Today, around 80% of our revenue comes from government and defence, with commercial only a small portion,” said founder Anirudh Sharma, adding that this started happening during the Russia-Ukraine war and continued with Operation Sindoor as demand for tracking space assets surged.

A similar trend is visible across other spacetech startups. Earth observation company GalaxEye now sees a 70:30 split between defence and commercial demand.

“Given the current geopolitical environment, we expect stronger demand from defence,” said cofounder Suyash Singh.

For PierSight, the shift is less about product and more about customers willing to pay early. Defence clients engage even with one satellite capacity, while commercial customers wait for full-scale deployment or constellations, said founder Gaurav Seth.


Pixxel has also evolved from a purely environmental-focused satellite startup and now serves defence customers. Its hyperspectral imaging capabilities allow camouflage detection, battle damage assessment and detection of illegal mining and soil disturbances, which can signal unauthorised activity in remote areas.

Industry experts said the pivot is less about technology and more about positioning. It mirrors global aerospace giants such as Lockheed Martin, Airbus, Boeing and Safran, which operate on both sides, defence and commercial.

“Everything that goes to space can be weaponised be it remote sensing, communications, observation, AI, propulsion, energy systems, space-hardened hardware. Almost everything has dual-use potential,” said Arpit Agarwal, investment partner at Blume Ventures, adding that with emergency procurement and active government engagement, there is real revenue flowing into these companies.

Picking a side

Startups however pointed out that tapping defence demand comes with constraints.

“In defence and government work, you can’t operate across every market. You have to pick your battles. For us, working with a country, though a friendly nation to India, could limit access to the US, and that’s a much larger market,” Sharma said.

Industry executives say this is becoming a reality across the ecosystem. One investor noted that while the Indian Space Research Organisation (ISRO) has historically tested engines in Russia, private startups cannot take the same route without risking access to Western markets. A company building rockets had to recently let go of testing opportunities in Russia so that it doesn’t get shut out of

the US market. This also means avoiding countries such as China, Russia, North Korea, Iran and others. Most founders said they are prioritising opportunities in the US, UK and European Union. To navigate these constraints, startups say they are restructuring operations across regions.

Digantara, for instance, operates its core space tracking and R&D out of India, runs missile defence-related products through its US arm, and serves Asia-Pacific governments via Singapore. Such multi-entity structures help companies comply with export controls while preserving access to key markets.

“Once we start delivering data, we will filter certain countries, especially those not considered friendly,” Singh said, adding that the US, West Asia and African countries remain priority markets.

In early April, US-based Planet Labs had to indefinitely suspend satellite imagery distribution over Iran and the broader West Asia conflict zone following a request from the US government.

The trade-off

Investors said the shift to defence is largely about survival. “Startups are solving for what works today. In the startup world, survival is critical, and that often means focusing on near-term goals, whether that is one year, two years, or more,” Agarwal said.

At the same time, founders said they are putting structures in place to avoid being locked out of global markets.

“If you are smart, you will create safeguards such as separate company structures or subsidiaries in different countries so that you can still go after commercial contracts where restrictions exist,” the investor added.

Some said the risks of losing markets may be overstated. Speciale Invest managing partner Vishesh Rajaram said companies can still operate across regions.

“Just because you are working on defence in India does not mean other regions will shut their doors. The world is large, and opportunities exist across markets,” he said.

Rajaram added that founders are making a clear choice.

“If they pick defence because it brings revenue, they have to accept that some trade-offs will follow,” he said. “But if they execute well, geopolitics will not be a major barrier.”

PierSight’s Seth added that what matters is “not where the money comes from, but where the satellite is registered. If it is registered as an Indian space object, no shareholder can step in and block its operations.”