Some of the biggest defence equipment and aerospace companies in the world have invested in startups. These investments have come through funds like Boeing HorizonX and Lockheed Martin Ventures or accelerators such as Airbus BizLabs or R2 Data Labs. What is common in these investments is the recognition of the pervasive role of disruptive technology. In the defence industry, where the theatres of war are expanding to cyber and space, the rise of (artificial intelligence) AI, autonomous systems, ubiquitous sensors, additive manufacturing, and quantum science are transforming strategic thinking of the modern battlefield. While major original equipment manufacturers (OEMs) and traditional defence manufacturing companies have engineering expertise for conventional weaponry, a new range of firms are in great demand as drivers of emerging technologies.
Indian policymakers have taken note of this development too. The Indian start-up ecosystem is the second-largest globally with around 20,000 startups, of which approximately 4,750 are tech-driven startups, and digital transformation is the new frontier in the area of defence and aerospace. India also has the fifth-largest defence budget in the world which provides additional opportunity for the development of startups in this field. To learn more about startup ecosystem in India, visit Startup India Hub page
In April 2018, Prime Minister Narendra Modi launched the Innovations for Defence Excellence (iDex) initiative aimed at creating an innovative universe in this industry involving small and medium companies, startups, individual innovators, research and development institutes and academia. The programme has been built to provide funding and allied support to develop technologies that can be used in defence and related fields.
The Ministry of Defence has also started a Defence Innovation Startup Challenge (DISC) under iDex which aims to help build innovative prototypes and help take new technologies to the market. The first DISC in 2018 had 500 applicants, of these 28 were shortlisted for funding. The 11 problem statements for the event ranged from Individual Protection Systems to 4G/LTE Tactical LAN, desalination technology and unmanned systems. While the problem statements were based on specific needs of the armed forces, they could be used in the civilian product too. Another 28 applicants were awarded certificates for their work at the Start-Up Day at Aero India 2019 as part of DISC II. These startups are also under consideration for the grant of funds for prototype development and potential commercialization.
In October 2019, the Ministry of Defence has notified special exceptions in the future in the Defence Procurement Policy to promote startups and will encourage them to bid for contracts of less than INR 150 cr without having to provide financial credentials.
The role of emerging technology will also get a boost in the upcoming DefExpo 2020 which will focus on the theme of digital transformation and ideas on leveraging India’s information technology skills in developing a defence manufacturing hub. Startups are poised to deliver a transforming impact in the defence industry, with additional benefits to civilian tech. It is encouraging to see the positive steps being taken by the government to create a robust hub for these emerging technologies.
To learn more about defence manufacturing opportunities in India, visit Defence Manufacturing sector page