Building on the mantra of Atmanirbhar Bharat, India has added 44 unicorns in 2021 alone bringing the total number to 81. This exponentially growing number of unicorns is not only backing innovative solutions but also large scale deployments. India has become a hotbed of start-ups including some of the difficult domains like defence. The upcoming budget is likely to provide a breakthrough to the defence related start-ups which is a core area for an Atmanirbhar Bharat. Proof in the pudding is the DRDO’s pursuit of self-reliance and successful indigenous development and production of strategic systems and platforms, which have given quantum jump to India’s military might. DRDO’s recent launches include long-range Supersonic Missile Assisted Torpedo (SMART), Stand-off Anti-tank (SANT) Missile, Extended Range Pinaka (Pinaka-ER) Multi Barrel Rocket Launcher System, Air version of BrahMos supersonic cruise missile, and Short Range Surface to Air Missile. Further, DRDO has recently transferred the technology of indigenous extreme cold weather clothing system (ECWS), three-layered and providing insulation upto -50 Celsius,to five India companies.
Around 200 Indian start-ups are seen to be committed to defence sector technology. One of the key domains for the full-fledged development of the defence start up ecosystem is a competitive defence equipment testing system. Presently the air-worthiness, sea-worthiness or the military-worthiness of any equipment is determined only by one institution CQIA. The dependence on just one institution that too at a much later stage of development of any military equipment is very expensive for research to reach production. Government has already paved the way for a competitive market by allowing DTIS, defence testing infrastructure scheme, whereby a requirement of a capital of 400 crores is projected to be invested in segregated labs. 75% of investment in any lab will come from Government of India and remaining 25% will come from private players. Even the involvement of private players has a requirement of minimum five members to participate for each lab constructing a section 8 company. These are expected to commence floater this year and completed in a timeframe of 24 months from then. After these labs are operational, any OEM or a start-up will have choices for testing, either to CQIA or any of DTIS established labs.
The last piece for a flourishing defence start-up ecosystem is the buildup of the order book. The upcoming budget is likely to provide for full 1000 crore in the form of orders for start-ups which is the requirement for sustenance of the ecosystem. Last year’s 1000 crore earmarking for Indian companies saw 498 crores to be given to iDEX start-ups which one hopes to be deployed by the end of the current financial year.
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