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Indian MOD to Fund 250 Start Ups @ Rs 20 Million Each

Published Nov 12, 2019
Updated Feb 06, 2020

Four essentials for promotion of iDEX to integrate start-ups in the defence industry MSME eco system and what can and cannot be achieved

Defence Minister Shri Rajnath Singh inaugurated, ‘Def Connect 2019’ organised by Ministry of Defence toshowcase the accomplishments of the Innovations for Defence Excellence (iDEX) initiative in New Delhi on 11 November.

Raksha Mantri (Defence Minister) handed over cheques of Rs three crores to two start-ups and also launched the third phase of Defence Startup Challenge.

Secretary (Defence Production) Shri Subhash Chandra highlighted that the aim is to fund 250 startups and achieve 50 tangible innovations in the next five years. The Ministry of Defence (MoD)is in the process of seeking approvals of Rs 500 crore [Rs 50 Million] for the purpose.

Defence India Startup Challenge (DISC) – III was launched under which three challenges from the Army, Navy and Air Force were thrown open to prospective startups.

An iDEX Open Challenge was also launched to provide an opportunity to innovators to come up with their technologies that may be adopted to the country’s defence requirements.

Raksha Mantri gave cheques of around Rs 1.5 crore each to two startups, i.e., North Street Cooling Towers Private Limited and Chipspirit Technologies Private Limited for building on their innovative ideas.

Shri Rajnath Singh expressed confidence that India will emerge as a net innovator and net exporter of defence technologies rather than a net importer.

“Our Prime Minister Shri Narendra Modi has set a target of USD 5 trillion economy by 2024. Looking at the talent India possesses, I am pretty confident that we can becomeUSD 10 trillion economy in the next 10-15 years,” he said.

Raksha Mantri highlighted that ‘Make in India’, ‘Startup India’ and ‘Atal Innovation Mission’ are some of the initiatives taken by the Government to provide the requisite environment to innovative minds in the country.

He said, the aim of iDEX is to recognise talent and harness it amongst the youth, MSMEs, Startupsand fast emerging private sector.

Terming research, development and manufacturing as collaborative process, Shri Rajnath Singh called for building a cohesion between public and private sector. He assured Government’s full support in the indigenisation of the defence industry and nation building.

Raksha Mantri also listed out the recent decisions taken by the Ministry including opening of Government testing labs and facilities for private sector; DRDO sharing its technologies with the private companies; and contribution of Bharat Electronics Limited (BEL) and Hindustan Aeronautics Limited (HAL)in progress of iDEX to encourage defence research and development.

India’s Ministry of Defence is hopeful of induction of cutting edge technologies through start ups and are incubating a large number – 250 in the next five years.

Four issues are significant to achieve the overall objective of generating an eco-system that can provide impetus to high technology MSMEs in the defence sector.

One is funding, at Rs 20 Million these may be restricted to basic projects for import substitution of ancillaries and spares or at best minor sub systems.

At the same time based on proposals each project should be provided additional funding requiring flexibility.

Secondly there is a need for an active interface between the design bureaus of the services and the start ups which are developing products. Services also need to increase the number of projects on offer.

To achieve the objective above, processes and procedures of approvals will have to be simplified.
Finally the Rs 5 Billion proposed for allocation for the programme in the next five years should not be a wish list and the Ministry of Defence needs to actively pursue allocations with the Ministry of Finance.

After alliDEX was an idea that emerged during the tenure of Finance Minister Smt Nirmala Sitharaman in South Block.

A word of caution is also necessary as stated earlier the projects and innovations will remain at the basic level and should not be seen as a substitute for large R &D programmes by the DRDO as well as defence PSUs and private sector enterprises.