The Technology Development Fund (TDF) scheme under the Ministry of Defence, which aims to boost MSMEs and startups’ engagement in designing and development of various defence technologies indigenously, has so far sanctioned 70 projects amounting to Rs 291.25 crore to various industries. In addition, 16 defence technologies have been successfully developed/realised under the scheme, informed Ajay Bhatt, Minister of State in the Defence Ministry in a written reply to a question in the Lok Sabha.

Launched in 2016 and executed by the Defence Research and Development Organisation (DRDO) under the Make in India programme, the scheme provides grant-in-aid to industries, including MSMEs and startups along with academic and scientific institutions for the development of defence and dual-use technologies currently not available with the Indian defence industry.

As of August 2023, the government has allocated Rs 260 crore under the scheme since its inception. Sharing the data in the Bhatt had informed that out of the amount allocated, Rs 64.35 crore was disbursed as a grant-in-aid to industries, FE Aspire had reported.

The scheme enables two funding mechanisms; first, the DRDO share of the project cost is paid in a maximum of five instalments in the form of reimbursement upon successful achievement of milestones by businesses. Second, advance funding of the project subject to a maximum of five milestones of the project.

Importantly, Defence Minister Rajnath Singh at an event in November this year had said the government has reserved 75 per cent of the defence capital acquisition budget for purchases from local companies, which will strengthen MSMEs. The 75 per cent reservation amounts to around Rs 1 lakh crore, Singh had said inaugurating the three-day India Manufacturing Show in Bengaluru jointly organised by Laghu Udhyog Bharti & IMS Foundation.

Meanwhile, during the monsoon session of the parliament this year, Bhatt had informed the Lok Sabha that over 30,000 defence items by defence public sector units (DPSUs) and services on the Srijan portal (which lists items that can be taken up for indigenisation by the private sector) were offered to theindustryincludingMSMEsto become partners in the indigenisation process.

The defence ministry had nearly doubled its online procurement of goods and services from MSMEs and other sellers in FY23 from the previous fiscal via the Government e-Marketplace (GeM) marketplace. The ministry had made purchases worth Rs 28,732.9 crore in FY23, up by 90.4 per cent from Rs 15,090.8 crore worth of goods and services bought in FY22, according to GeM, FE Aspire had reported.

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