Govt Issues Guidelines To Encourage Startups To Undertake Military Development Projects

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India’s defence ministry has issued new rules for homegrown startups to take part in military projects in an attempt to encourage Indian startups to undertake research projects to develop or upgrade weapon systems and in turn reduce imports in this field, as per media reports. 

Under the new rules, startups recognized by the Department of Industrial Policy & Promotion (DIPP) under certain categories will automatically qualify to take part in specified defence projects.

These categories range from aeronautics, nanotechnology and Virtual Reality to renewable technology, robotics, green technology and internet of things.

Between 2012 and 2016, India accounted for 13% of global arms & weapons imports and has been spending worth nearly $3.5 billion to boost its aging Soviet-era military equipment. 

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According to media reports, the government has simplified rules for relatively smaller research and development projects has kept the project open to all Indian companies. It has done away with any regulations for participation.

“For projects with estimated cost of prototype development phase not exceeding Rs 3 crore, no separate technical or financial criteria (will) be defined for both ‘startups’ and ‘other than startups’, to encourage their participation,”

the new rules specify.

With these rules specified, the three services will now shortlist projects that can be awarded under the category. The Army, Air Force, and Navy have already identified 53 projects that can be taken up on priority under the rules. These include Maneuverable Expendable Aerial Targets (MEAT) for Army Air Defence, lightweight body armour, a robotic surveillance platform, diesel engines for boats, limpet mines, air to ground rockets and long-range glide bombs. 

The production of Indian defence equipment prior to 2011 was completely in the hands of the Government of India until in 2016 when it opened up the Foreign direct investment (FDI) to 49% from the existing 26%.

New Defence Procurement Procedure (DPP) 2016 has a focus on achieving the “Make in India” vision by according topmost priority to ‘Buy Indian – IDDM (Indian Designed, Developed and Manufactured)’ and ‘Buy (Indian)’ categories.

There are several Indian startups & SMEs that cater to the Defence industry by supplying sub-assemblies and components and providing services like system integration. Some of the notable names catering to the Defence sector in India are Mistral Solutions, Alpha Designs, Astra Microwave and SLN Technologies among others.

Numerous startups working in Medtech, artificial intelligence, and Virtual reality/Augmented Reality are even helping Indian army and defence personnel.

India has recently joined hands with Japan to launch robotics and artificial intelligence in the defence segment. 

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