Lok Sabha Question No. 1629 (UNSTARRED), answered on 2017-03-10
Subject: Defence Start-Ups
Ministry: DEFENCE
Asked by: OM BIRLA

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA

## UNSTARRED QUESTION NO.1629

TO BE ANSWERED ON THE 10 TH  MARCH, 2017

## DEFENCE  START-UPs

1629. SHRI  OM  BIRLA:

- Will the Minister of DEFENCE    j{kk ea=h be pleased to state: (a) the total number of defence start-ups set up in the country during the last three years, State-wise; (b) whether the Government plans to create a new technology innovation fund for defence aerospace aimed to prop up start-ups; (c) if so, the details thereof; and the  Government  to  encourage  culture  of
- (d) the other steps taken by innovation in defence sector?

## A    N    S    W    E    R

## MINISTER OF STATE (DR. SUBHASH BHAMRE) IN THE MINISTRY OF DEFENCE र  ा रा य मं ी ( डा . सुभाष भामरे )

## (a) to (d): A statement is attached. *******

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  LOK  SABHA UNSTARRED QUESTION NO. 1629 FOR ANSWER ON 10.3.2017

(a) Government of India has launched 'Start-up India' initiative  in  January  2016, which aims at  fostering  entrepreneurship  and  promoting  innovation  by  creating an ecosystem that is conducive for growth of start-ups.  The data of start-ups recognized by  Department  of  Industrial  Policy  &  Promotion  (DIPP),  is  maintained  by  'Start-up India' and at present, there is no recognized start-up in the Defence sector.  However, in  order  to  encourage  start-ups  and  give  them  an  opportunity  to  contribute  in  the defence  production,  Ordnance  Factory  Board  (OFB)  and  all  Defence  Public  Sector Undertakings  (DPSUs)  have  been  mandated  to  follow  the  guidelines  of  Ministry  of MSME regarding 'Relaxation of norms for start-ups and Medium & Small Enterprises in public procurements on prior experience - prior turnover criteria'.

## (b) to (d): The  Government  has  taken  following  actions  to  encourage  culture  of innovation in defence sector:-

- (i) Under the new Defence Procurement Procedure (DPP) 2016 promulgated in April 2016, the 'Make' Procedure has been simplified.  The procedure provides for funding of 90% of development cost by the Government to Indian industry for design, develop and manufacture of defence equipment.    Projects  not  exceeding  development  cost  of  Rs.10  crore (Government  funded)  and  Rs.3  crore (industry funded)  have  been reserved for MSMEs under this procedure.
- (ii) The Government has recently approved a Defence Innovation Fund (DIF) with initial funding by two DPSUs; Bharat Electronics Limited (BEL) and Hindustan  Aeronautics  Limited  (HAL).    The  fund  aims  at  creation  of ecosystem to foster innovation and technology development in Defence, by engaging R&D institutes / academia and industry including start-ups and provide them the funding to carry out innovative development which has the potential for future commercialization.
- (iii) The Government has also launched a scheme of Technology Development  Fund  (TDF)  which  aims  at  funding  the  development  of defence and dual use technologies that are currently not available with the  Indian  defence  industry,  or  have  not  been  developed  so  far,  thus creating an ecosystem for enhancing cutting edge technology capability for  Defence  applications.   The TDF  scheme  is  implemented  by  Defence Research & Development Organization (DRDO) and provides for assistance in the form of grant to public and private industries for design and development of key defence technologies.
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