Defence Ministry issues new guidelines for startups

NEW DELHI: The defence ministry has specified new rules for homegrown startups to take part in military projects in an attempt to focus their attention on cutting edge research and development. The new rules, specified this week, seek to encourage new companies to undertake research projects to develop or upgrade weapon systems and to work towards reducing imports.
Under the new rules, startups recognised by the Department of Industrial Policy & Promotion (DIPP) under certain categories will automatically qualify to take part in specified defence projects. These categories range from aeronautics, nanotechnology and Virtual Reality to renewable technology, robotics, green technology and internet of things.
For relatively smaller research and development projects, the government has simplified rules by keeping the race open to all Indian companies, doing away with any regulations for participation.
“For projects with estimated cost of prototype development phase not exceeding Rs 3 crore, no separate technical or financial criteria (will) be defined for both ‘start-ups’ and ‘other than startups’, to encourage their participation,” the new rules specify.

These new rules apply to the 'Make II’ category of defence procurement where the private industry funds the research for the product on its own and develops a prototype that is offered to the concerned service for evaluation.
“There will be no government funding for developing the prototype there is an assurance of orders on successful development and trials of the prototype,” an official explained.
With these rules specified, the three services will now shortlist projects that can be awarded under the category. The Army, Air Force and Navy have already identified 53 projects that can be taken up on priority under the rules. These include Maneuverable Expendable Aerial Targets (MEAT) for Army Air Defence, light weight body armour, a robotic surveillance platform, diesel engines for boats, limpet mines, air to ground rockets and long range glide bombs.
This is the third move in recent months to promote startups in the defence sector.