Cultivating dynamic defence innovation ecosystems that are bolstered by sustainable policies and robust infrastructure is the need of the hour. To achieve this, the Government of India has committed to adopt a multifaceted approach, by collaboration among researchers, talent and industries, including micro, small and medium enterprises (MSMEs) and start-ups. This article explores the evolving ecosystem of start-ups, which has a role in fostering technological innovation within a self-reliant defence ecosystem. It highlights the role of collaborations between the defence establishment and various evolving stakeholders in reshaping innovation in the technological domain. Innovation in critical defence technologies relies on well-defined policy-led ecosystems to transition from conceptualisation to production. The importance of collaboration and innovation ecosystems in advancing defence technology by engaging stakeholders, like MSMEs, in defence supply chain and indigenisation efforts is also highlighted. In addition, there have been initiatives, which ensure securing early stage funding for innovations by MSMEs and start-ups.