Seven private Indian companies have been selected to participate in a groundbreaking India-U.S. space and defence collaboration program, opening doors to a lucrative and strategic market for Indian businesses, according to three sources familiar with the development.

The program includes firms such as KaleidEO, known for space imaging, and rocket manufacturers EtherealX and Aadyah Space. Under the initiative, these companies will collaborate with the U.S. Defence Innovation Unit, the Department of Defence, and other government bodies to work on satellite observation technologies and advancements in space and defence.

In return, these Indian firms will gain access to the world’s largest defence and space market, mentorship opportunities and paid contracts. According to two sources, they will collaborate with leading U.S. defence companies, including Northrop Grumman, RTX (formerly Raytheon), and Lockheed Martin. This partnership is expected to give Indian startups a competitive advantage as they compete for U.S. contracts in niche markets valued at approximately $1.5 billion annually, one source noted.

The sources requested anonymity as the official announcement of the program has not yet been made. Government entities in India and the United States did not respond to queries for comment. The details of the initiative and the list of participating companies have not been publicly disclosed, and Reuters could not confirm the complete list of selected firms. Representatives from Lockheed Martin and Northrop Grumman declined to comment, while RTX and the Indian firms did not immediately respond to statement requests.

The India-U.S. Defence Acceleration Ecosystem, launched in 2023, aims to create an innovation bridge between the two nations. This initiative aligns with India's strategy to expand its private defence and space industries while reducing its dependence on Russia, a longstanding defence partner.

Indian investment firm IndusBridge Ventures and US-based FedTech played key roles in selecting the seven successful companies. According to one source, they established a launchpad in September 2024 as part of the broader government program, with ongoing discussions about specific projects.

Access to the US defence and space market is expected to be transformative for Indian companies, potentially generating annual revenues between $500 million and $1 billion. The second source emphasised that the program’s primary objective is to enable Indian-domiciled firms to collaborate with the U.S. Department of Defence and industry leaders while establishing a foothold in the U.S. commercial space launch market.

India's National Security Advisor, Ajit Doval, held discussions with his U.S. counterpart, Jake Sullivan, in New Delhi this month. The meeting focused on boosting collaboration in space technology and the "deepening cooperation between the U.S. Defence Innovation Unit and India’s Innovations for Defence Excellence to accelerate the adoption of cutting-edge commercial technologies for military solutions, " among other issues.