Directorate of Military Intelligence ( India ) The Directorate of Military Intelligence ( MI ) is the intelligence arm of the Indian armed forces . The agency was set up in 1941 ( then as part of the British Indian Army ) to generate field intelligence for the army . The agency is based at Sena Bhavan in Delhi . MI was initially tasked with generating only tactical or field intelligence in all countries bordering India . Its geographical mandate was set to 50 km from the border . These limits were quickly crossed in the mid - 1990s when the organisation began playing an increasing role in countries within the subcontinent and its outer periphery . MI ' s mandate also includes counter - terrorism in the north and North - east and generating pinpoint intelligence for small team operations . It is also tasked with counterintelligence in the army , which entails detecting spies in military areas . History . The agency was set up in 1941 to generate field intelligence for the Indian army . After India gained independence in 1947 , it became a small army department primarily that investigated corruption within the force . Little is known about its activities . In 1978 , the directorate was embroiled in the Samba spy scandal , wherein it was later found that the directorate had falsely implicated three Indian Army officers as being Pakistani spies . The agency gathered momentum in the 1990s especially after the Kargil conflict with Pakistan . The army had to handle the poor quality tactical intelligence provided by the Intelligence Bureau ( IB ) and R & AW . Hence the MI ' s mandate was ultimately boosted . MI operatives moved into Tajikistan and later Afghanistan in support of the Ahmad Shah Massoud - led Northern Alliance that overthrew the Taliban in 2001 with aid of US - led coalition forces in the aftermath of the September 11 attacks and the subsequent War On Terror . MI was also active in Myanmar , which nurtured insurgent groups . In 1998 , an MI operative impersonated a Khalistani terrorist and infiltrated a gun - running Myanmarese insurgent group . He led them into a death trap in the Andaman islands . Operation Leech , as the operation was called , marked the start of the Indian Army outreach to the Myanmarese junta in the 1990s . It also aimed to offset China ' s expanding footprint on India ' s eastern border . MI Has carried out operations in Bangladesh too because of safe sanctuaries provided to insurgent groups like the United Liberation Front of Asom ( ULFA ) , the United National Liberation Front of Manipur ( UNLF ) and the Kamtapur Liberation Organisation of Assam . Within months of the Hasina government taking over in 2009 , the entire leadership of the ULFA and UNLF was handed over to Indian authorities . MI officials say these ' third country operations ' allowed the agency to peep into countries of their immediate interest besides furthering national goals . In January 2012 , the MI warned Sheikh Hasina , the then prime minister of Bangladesh , about a coup brewing in the Bangladeshi Army which was ultimately foiled . Organisation . The organisation comprises just over 700 officers , including women officers , and over 3 , 000 men . It is still tiny when compared to R & AW and IB , whose staff is over 25 , 000 . MI ' s operating budget , too , is a tiny fraction of the well - entrenched IB and R & AW , though all three agencies have somewhat overlapping mandates vis - a - vis trans - border tasks . The director - general , MI , a lieutenant general - rank officer who reports directly to the army chief , is indispensable when it comes to furthering Indian Army ' s diplomacy and exchanging intelligence with friendly countries like Myanmar , Israel , Afghanistan and Vietnam . Post - Kargil Changes . Indian Intelligence agencies have been often embroiled in turf wars , with the Intelligence Bureau and the Research and Analysis Wing locked in constant power struggle . The MI too has lost turf to two new intelligence agencies , the National Technical Research Organisation and the Defence Intelligence Agency ( DIA ) , created in the aftermath of the Kargil Conflict to address the intelligence failures that led to massive cross border infiltration . Defence Intelligence Agency took away some of its signal monitoring capabilities and foreign military attaches who used to report to the MI .