MoD’s Technology Development Fund limit raised five-fold to Rs 50 crore per project - Broadsword by Ajai Shukla

The BrahMos Aerospace assembly line in Hyderabad, where many MSMEs feed their most innovative products

By Vikas Gupta

Defence News of India, 9 Jun 22

The funding limit for innovative defense projects under the Technology Development Fund (TDF) was raised on Wednesday to Rs 50 crore per project, from the current limit of Rs 10 crore.

The TDF programme, executed by the Defense Research and Development Organization (DRDO), supports the local development of components, products, systems and technologies by micro, small and medium-sized enterprises (MSMEs) and start-ups.

To facilitate increased funding for innovative TDF products, the EU budget for 2022-2023 earmarked 25% of the defense R&D budget for private industry, start-ups and universities. “The increased funding is in line with the budget announcement and it will further strengthen the vision of ‘Aatmanirbharta’ (self-reliance) in defence,” the Ministry of Defense (MoD) said in a statement.

“The TDF program aims to give a major boost to the defense manufacturing sector by encouraging the industry to innovate and develop defense technologies to put India on the path to self-reliance. The program facilitates up to 90% of the total project cost and allows industry to work in consortium with another industry/university.

“With this increased funding, industry and start-ups will be able to develop more complex technologies for existing and future weapon systems and platforms. To date, 56 projects have been sanctioned under the TDF program,” the MoD said.

“With increased funding limits, powerful systems will be developed and large companies will be supported along with MSMEs. It will be a huge win-win for all. A clear supply path after development will mean industry can boldly invest in capabilities,” says Abhishek Jain of Zeus Numerix, a small company that has been hailed for its innovation.

There are four programs under which small defense companies can approach the Department of Defense to fund innovative projects: iDEX (Innovation for Defense Excellence); iDEX Prime; the TDF and Make II and Make III projects, the terms of which are specified in the 2021 Defense Acquisition Policy (DAP-2021).

The TDF aims to develop products for the army, but also for other strategic industries such as the Indian Space Research Organization (ISRO). As with iDEX products, an order to the lead developer benefits all MSMEs operating in its supply chain.

During the decade 2009-2019, the TDF was allocated Rs 544 crore. In four of those years, the allowance was zero.

iDEX is a smaller, military-run program that seeks innovative solutions for specific functional challenges encountered in the field. It has a limit of Rs 1.5 crore.

For example, an MSME called Zeus Numerix was declared the winner of the iDEX challenge at the Aero India 2021 airshow in Bengaluru last year, for developing simulation software that makes warships almost invisible to radar.

If things go according to plan, Zeus would secure funding, usually from iDEX Prime, to help transition their innovative product into large-scale, high-volume manufacturing.

Meanwhile, an MSME irreverently named BigBangBoom Solutions has won the iDEX challenge for the development of “transparent armor”. This allows a tank crew to gain 360 degree situational awareness by mounting cameras on the outside of the tank, capturing a 360 degree view and stitching the separate images from those cameras into a single image using to data fusion.

“Current funding levels under iDEX are insufficient to support cutting-edge innovation. It allows for the optimization of various systems, but not fundamental basic research. To fund projects involving basic research, the allocation of Rs 50 crore, which the Ministry of Defense has just authorized, would be needed,” says Praveen Dwarkanath, who runs BigBangBoom.

The government told Parliament on March 25 that it had provided iDEX with budget support of Rs 498 crore for the five years from 2021 to 2026, with the aim of providing financial support to almost 300 start-ups/MSMEs /individual innovators.