In order to minimize the defense sector’s dependence on imports, the government would allocate 68 percent of the capital procurement budget, up from 58 percent. Defense’s Research and development (R&D) will be made available to startups, industry, and academia, with 25 percent of the defense R&D budget set aside for this purpose.
Through public-private partnerships, private players will be invited to design and develop military systems and equipment in collaboration with the Defence Research and Development Organisation (DRDO) and other organizations. A nodal agency will be formed to oversee the testing and certification of these indigenous defense platforms.
Defense, artificial intelligence (AI), drones, space economy, genomics & pharmaceuticals, geospatial systems, and clean mobility have tremendous potential to enable sustainable development and provide employment for millions of individuals. The Government of India would support development in these categories through targeted measures, according to the finance minister.
Congratulating Finance Minister Nirmala Sitharaman on the presenting of an ‘excellent’ Union Budget for 2022-23, Defence Minister Rajnath Singh said, “It is a Budget which would give a fillip to ‘Make in India’, boost demand and build capacities for a stronger, prosperous and confident India. The Budget outlines the Government’s focus on Atamnirbharata and Prime Minister Shri Narendra Modi’s vision for development and pro-people reforms. It is a growth-oriented Budget focused on harnessing the energies of New India.”
The government, last year, approved Rs 498.8 crore in budgetary funding for Innovations for Defence Excellence (iDEX)-Defence Innovation Organisation (DIO) for the next five years. The scheme was launched to offer financial assistance to MSMEs, startups, individual innovators, including 20 partner incubators in the defense technology space.
Acting on its “Make in India” mission, the current Union government has set up a number of measures to boost domestic defense manufacturing and explore public-private collaborations. According to a statement issued by the Ministry of Defence in September 2020, over 11,000 MSMEs were already involved as vendors in supplying defense-related goods to the Ordnance Factory Board and defense PSUs.
The government’s procurement of defense-related goods and services from micro and small enterprises (MSEs) climbed marginally by 2.2 percent to Rs 9,293 crore in FY21 from Rs 9,090 crore in FY20, after declining from Rs 12,112 crore in FY19.
Under the government’s “Startup India” initiative, 194 defense tech startups are now innovating. More than 50 of these are working on new ‘fit-for-military-use’ technologies and equipment as part of the government’s “Innovations for Defence Excellence” (iDEX) initiative. These startups are trying to address the unique problem statements presented by iDEX in its Defence India Startup Challenges (DISC), which range from individual splinter-proof protection suites to real-time positioning systems.