Lok Sabha Question No. 3234 (UNSTARRED), answered on 2021-12-17
Subject: Defence Startups
Ministry: DEFENCE
Asked by: Debasree Chaudhuri, Poonam (Mahajan) Vajendla Rao

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK SABHA UNSTARRED QUESTION NO.3234

TO BE ANSWERED ON 17 th  DECEMBER, 2021

## DEFENCE STARTUPS

## 3234. MS. DEBASREE CHAUDHURI: SHRIMATI POONAM MAHAJAN:

Will the Minister of DEFENCE be pleased to state:

- (a) whether the Government proposes to fund at least 250 defence startups over next five years and if so, the details thereof;
- (b) whether the Government has identified projects to be taken up under startup scheme and if so, the details thereof;
- (c) whether there is a need to strengthen Research and Development in defence manufacturing and if so, the steps taken by Government in this regard;
- (d)  whether  the  Government  proposes  to  expand  innovations  for  defence  Excellence  Initiative and earmark at least Rs.500 crore for this initiative; and
- (e) if so, the details thereof and the steps taken by Government to bring together innovators with public and private sector industry and to make the country exporter of defence technologies?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

- (a) to (e) :  A Statement is attached as Annexure.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK  SABHA UNSTARRED  QUESTION  NO.  3234  FOR  ANSWER  ON  17.12.2021  REGARDING 'DEFENCE STARTUPS'.

(a) to (e): The Department of Defence Production, Ministry of Defence has approved a central sector  scheme  viz.  Innovations  for  Defence  Excellence  (iDEX)with  budgetary  support  of Rs.498.78 crore for the next 5 years from 2021-22 to 2025-26. The objective of the scheme is to provide  financial  support  to  nearly  300  Startups/  MSMEs/individual  innovators  and  about  20 Partner  incubators  through  Defence  Innovation  Organisation  (DIO).  Innovations  for  Defence Excellence (iDEX)  framework  aims to achieve self-reliance and foster innovation and technology  development  in  Defence  and  Aerospace  Sector  by  engaging  Industries  including MSMEs,  startups,  individual  innovators,  R&D  institutes  and  academia.  A  total  of  89  iDEX winners have so far been identified. 35 new problem statements have been launched recently to expand the network, under Defence India Startup Challenge (DISC)-5.

2. Further,  in  order  to  promote  startups,  DRDO  has  also  launched  DARE  to  DREAM contest and Technology Development Fund (TDF) Scheme.
2. (i) Dare  to  Dream  is  a  Pan  India  Innovation  Contest  to  support  startups  &  innovators  to contribute  in  Defence  ecosystem.  DRDO  has  been  conducting  Dare  to  Dream  Contest since  2019.  DRDO  specifies  various  themes  and  invites  innovative  ideas  under  those themes.  Best  ideas  are  selected  and  awarded.  DRDO  also  supports  awarded  ideas  to realize  them  into  Prototype  through  TDF  scheme.  Two  versions  of  Dare  to  Dream Contest have already been successfully conducted.
3. (ii) TDF Scheme is executed by DRDO under 'Make in India' initiative. The Government has  approved  TDF  Scheme to  encourage  industries  especially  MSMEs  and  Startups  to develop various defence technologies. The scheme operates in Grants-in-Aid Mode. The scheme was launched in Sep 2016. At present, a total of 37 project have been awarded to various industries specially MSMEs and Startups under TDF scheme.
3. Procedure for 'Make-II' category, which is Industry funded, was introduced in DPP-2016 to encourage indigenous development and manufacture of defence equipment. It has a number of industry  friendly  provisions  such  as  relaxation  of  eligibility  criterion,  minimal  documentation, provision  for  considering  proposals  suggested  by  industry/individual  etc.  So  far,  60  projects relating to Army, Navy & Air Force, have been accorded 'Approval in Principle'.

## 4. The steps taken to strengthen Research and Development in defence manufacturing are as follows:

- (i) Transfer of Technology (ToT) policy with 'nil' ToT fee for Development cum Production Partner  (DcPP),  Production  Agency  (PA)  and  Development  Partner  (DP)  has  been promulgated by DRDO. No royalty is charged from industry for supply to Indian Armed Forces/Paramilitary/Police  Forces.  2%  royalty  is  charged  for  export  and  products  for commercial markets.
- (ii) DRDO is promoting research by providing Grant-in-Aid funding to various Indian R&D institutions/Universities.
- (iii) 10 Centers of Excellence (CoEs) are operational in various IITs/Universities across India for directed research in identified areas.
- (iv) 108 technologies/products have been exclusively earmarked for R&D leading to product development  by  Indian  industry.  DRDO  provides  necessary  support,  including  testing and certification, wherever necessary/applicable.
- (v) DRDO patents have been made available to Industry for use at 'nil' cost.
- (vi) DRDO test facilities have been opened to industry for testing their equipment products.

## 5. Further,  following  policy  initiatives  have  been  undertaken  by  the  Government  to promote Defence Exports:-

- (i) Standard  Operating  Procedures  (SOPs)  for  the  export  of  munitions  list  items  has  been simplified to reduce the processing time for export authorizations.
- (ii) A  completely  end-to-end  online  portal  for  receiving  and  processing  authorization permission  has  been  developed.  The  applications  submitted  on  this  portal  are  digitally signed and the authorizations are also digitally issued.
- (iii) An  online  portal  has  been  created  through  which  export  leads  received  from  various stakeholders  are  being  disseminated  directly  to  the  Indian  Defence  Exporters  who  are registered on the portal.
- (iv) The  Government  has  notified  the  Open  General  Export  License  (OGEL)  -  a  one-time export  license,  which  permits  the  industry  to  export  specified  items  to  specified destinations, enumerated in the OGEL, without seeking export authorisation on case to case basis during the validity of the OGEL.
- (v) A Scheme for Promotion of Defence Exports has been notified to provide an opportunity to the prospective exporters to get their product certified by the Government and provides access  to  the  testing  infrastructure  of  Ministry  of  Defence  for  initial  validation  of  the product and its subsequent field trials. The certificate can be produced by the prospective exporter for marketing their products suitably in the global market.

- (vi)      A  separate  Export  Promotion  Cell  has  been  formed  in  the  Department  of  Defence Production  (DDP)  to  co-ordinate  and  follow-up  on  export  related  action  including enquiries received from various countries and facilitate private sector and public sector companies for export promotion.
- (vii)    Defence Attache (DA) Scheme for Export Promotion has been formulated under which funds are provided to DAs for export promotion of Indigenous defence products of both public and private sector.
- (viii)   DPSUs have been allocated certain countries to establish their marketing offices to have focused attention to encourage Defence exports in those countries.
- (ix)     Subject to strategic considerations, domestically manufactured defence products are being promoted  through  Lines  of  Credit.  Defence  Lines  of  Credit  (LOCs)  are  extended  to sovereign governments of Friendly Foreign Countries to enable buyers in those countries, to import goods and services from India on attractive credit terms.
- (x)       A High Level Committee (HLC) has been constituted under the Chairmanship of Hon'ble Raksha  Mantri  to  facilitate  faster  clearances  to  export  of  major  indigenous  defence platforms to Friendly Foreign Countries.
- (xi)     Webinars are being organized with Friendly Foreign Countries under the aegis of DDP, Ministry of Defence with active participation from Indian Defence Industries.

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