Start-ups in Aerospace & Defence Sector

Defence Minister Rajnath Singh has recently approved INR 498.8 crore budgetary support for research and innovation in the defence sector through iDEX. The funds will be used to provide financial assistance to around 300 start-ups, MSMEs and individual innovators in the defence sector. The primary objective of the move is to promote the domestic defence industries and make India self-reliant in the defence sector. This scheme along with the ban on certain defence imports would help to boost the domestic defence manufacturing industry and provide business opportunities to start-ups and MSMEs in the Indian defence sector. Check out the article to know about the role of start-ups and MSMEs in the defence sector.

Over the last ten years, India has emerged as one of the strongest start-up centres for the world- driven by factors such as cultural change, vast talent pool, access to funding, consolidation, evolving technology and strong domestic market. The numbers are growing in good pace—from nearly 3000 start-ups in 2014 to approx. 10,000 by 2020, surely indicating a potential revolution that may bring mass entrepreneurship into picture. While many sectors are leading from the front like Fintech, Healthtech, Edutech, Data Analytics and B2B Commerce, some sectors like Aerospace, Defence, Food tech and Pharma are poised to take off in near future.

Technology and innovation are the bedrock of a vibrant Aerospace & Defence(A&D) ecosystem and start-ups act as a perennial source for nurturing technologies. India currently has 194 defence tech startups working under the startup India mission, of which, 44 are working with ‘Innovations For Defence Excellence (iDEX)’ initiative and developing solutions related to automated robotics, individual protection systems, navigation systems and Unmanned Aerial Vehicle (UAVs)/ drones.

Several initiatives have been launched in order to achieve self-reliance and to foster innovation and technology development in Aerospace & Defence (A&D) through iDEX. Separate procedure for ‘Make-II’ category (Industry funded) has been notified under Defence Procurement Procedure to encourage indigenous development and manufacture of defence equipment. Number of industry friendly provisions such as relaxation of eligibility criterion, minimal documentation, provision for considering proposals suggested by industry including start-ups/individual etc. have been introduced in this procedure. Government has further proposed to set up innovation hubs, Incubation centres in several institutions and organizations in the country like DRDO under iDEX & Atal Innovation Mission (AIM).

DRDO has evolved a new industry-friendly patent policy for the transfer of DRDO developed technologies to industries. The policy will help Indian start-ups to get free access to use DRDO patents and work on innovative solutions aimed to improve India’s defence capabilities. The Indian government is also considering to fund 250 start-ups over the next five years (approximately Rs. 500 Cr) to achieve around 50 ‘tangible innovation’ for the Indian Aerospace & Defence sector.

As per latest SIPRI report- India, known to be one of the top importers in defence, has entered the list of top 20 exporters of defence equipment in 2020. As we target a $26-billion Aerospace & Défence(A&D) industry in India, backed by strong domestic demand and $5-billion exports by 2025, startups in this field need to enhance their contribution both towards technology development & world class manufacturing. Start-up eco system in Israel is an ideal example that can be imitated. It presents a perfect mix of technology and innovation, stemming primarily from start-ups, and has powered Israel to become an advanced, hi-tech global centre for Aerospace & Defence (A&D).

Successful start-ups emerging from India are a result of clear vision, commitment, patience & persistence, and A&D sector in no exception to it. We need to identify and fill technological gaps with innovative approach, out-of-box ideas, agility to the customer requirements, speed of technology development, for generating sustainable start-ups in A&D.

The government on its part needs to continue with the momentum of launching new initiatives/ schemes under the aegis of Atmanirbhar Bharat/ Make In India/ Startup India, tracking them and ensure ‘On-Ground’ implementation and benefits to the targeted entities, aided by policies and faster decision-making and approvals. It should act as a catalyst to help start-ups surmount industry entry barriers thereby encouraging top brains and entrepreneurs to enter A&D sector, resulting in development of innovative technologies, achieving efficiency at optimum cost.

The ultimate aim however is to stand up to the demands for self-reliance in arming the Indian armed forces and also boosting business by exporting to friendly nations thereby becoming a strong techno-economic force to reckon in this volatile global geopolitical situation.

Source: The Indian Express