Rajnath Singh approves Rs 499 cr budgetary support to MSMEs, startups, others for innovation in defence

The Defence Ministry on Sunday announced approval to budgetary support of Rs 498.8 crore by Defence Minister Rajnath Singh to the scheme Innovations for Defence Excellence (iDEX) by Defence Innovation Organisation (DIO). The scheme intends to financially support close to 300 MSMEs, startups, individual innovations, and 20 partner incubators under the DIO framework for the next five years to boost self-reliance and indigenisation in defence and aerospace sector of the country. The budgetary support would look at engaging MSMEs, startups, individual innovators, R&D institutes through grants or funding, and other support to carry out R&D development that has good potential for future adoption for Indian defence and aerospace needs.

“The scheme aims to facilitate rapid development of new, indigenised and innovative technologies for the Indian defence and aerospace sector to meet their needs in shorter timelines; create a culture of engagement with innovative startups to encourage co-creation for defence and aerospace; empower a culture of technology co-creation and co-innovation within the defence and aerospace sector and boost innovation among the startups and encourage them to be a part of the ecosystem,” the ministry said.

The Department of Defence Production (DDP) will release funds to DIO for “setting up and managing the iDEX network in the form of partner incubators, for communicating with innovators, startups, technology centres of MSMEs through such incubators including those under Department of Science and Technology regarding defence and aerospace needs.” DDP will also organize different challenges and hackathons to shortlist potential technologies and entities and evaluate technologies and products developed by innovators, and startups in terms of their utility and impact on the defence and aerospace setup.

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Other activities under the programme would include interfacing with the armed forces top brass about key innovative technologies and encouraging their adoption into the defence establishment with suitable assistance, indigenization, and integration in manufacturing facilities for successfully piloted technologies and organising outreach activities across India.

Importantly, the procurement of defence-related goods and services by the government from micro and small enterprises (MSEs) had increased, though marginally, by 2.2 per cent to Rs 9,293 crore in FY21 from Rs 9,090 crore in FY20 after declining from Rs 12,112 crore in FY19, Financial Express Online had reported. According to a statement by the Ministry of Defence in September 2020, around 11,000 MSMEs were engaged as vendors in supplying defence-related goods to Ordnance Factory Board and defence PSUs.