Start- ups in are today becoming the flag bearers of innovation in various industrial segment’s further strengthening the backbone of the country. Their effective contribution have make them one of the major contributors to self-sufficiency. Hence, when we talk about developing defence capabilities it is important that start-ups receive the adequate support, given their potential to modernised defence capabilities.
In a recent policy decision, the ministry of defence specified new set of rules for home-grown start-ups intending to participate in military projects. The new rules are an effort to encourage new companies foe undertaking research projects to develop and upgrade weapon systems.
The year has been marked important for start-ups looking for opportunity in defence sector as the ministry of defence had taken various policy steps for participation of start-ups to substitute imports.
The policy decisions included recognition by Department of Industrial Policy and Promotions (DIPP) under certain categories. Start-ups from aeronautics, nanotechnology, robotics, green technology, internet of things, virtual reality and renewable technology which will automatically qualify to take part in specified defence projects.
Further, Armed Service have identified 53 projects under “Make II” category, including Maneuverable Expendable Aerial Targets (MEAT) for Army Air Defence, light weight body armour, a robotic surveillance platform, diesel engines for boats, limpet mines, air to ground rockets and long range glide bombs.
Projects with estimated cost of prototype development phase not exceeding Rs.3 Crore, no separate technical or financial criteria will be defined to encourage participation of start-ups. Though there will not be any funding from the government for developing the prototype. They can are otherwise ensued for orders in case of a successful prototype submission.
This can be marked as the third major policy development in context to promoting start-ups participation in improving defence capabilities and import substitution. However, it is also important to note that policy can only motivate the start-ups only to a certain extent given various structural challenges.
It is important that we take into consideration the lack of knowledge transfer and technological skillset that is required for home-grown start-ups trying to make into defence manufacturing. As these are the major bottlenecks not just for start-ups bit also even for large scale companies trying to make a mark in defence procurement.
This is the time when we should work on uprooting the structural challenges by building a healthy technologically stimulating environment. Government and corresponding ministries such as defence and commerce must come with a comprehensive plan to address the demand for technological skill set required now and near future. Interest, scope and capabilities of workforce should be enhanced by special institutes that focus on giving training to young talent for gearing up the process of technological transformation.
Financing, being another major challenge, for start-ups at least, must be given due attention. We may require another policy step to make ease of financing for home-grown start-ups so that they receive the due motivation and facilitation required for effective and fruitful participation for the desired results.