Chance to Join the Big Party

A massive opportunity stares at startups in the defence sector and the right kind of support from the government and private investors could give them the impetus they need.

- Ayushman Baruah

 

STARTUPS IN the defence sector have a gold mine to dig. The total defence budget for 2016-17 is Rs 2.49 lakh crore, of which electronics forms a major component. Electronics alone is expected to generate $72-billion worth of market opportunities for startups over the next 10 years. The government’s Make in India initiative, as part of which several policies have been rolled out over the past two years, has in addition given a special impetus to the private sector to invest in re- search, design, and development.

“There are many opportunities for startups to tap some of the need for small-scale equipment for training and use in counter insurgency and in anti-terrorism operations from bullet proof jackets to radio sets, vision devices and simulators. The Armed Forces and police forces are looking at affordable options that guarantee quality. They are open to weaning away from the defence PSUs, and this is where the opportunity lies,” says Maroof Raza, strategic affairs expert.

The Defence Procurement Procedure 2016 (DPP) effective 1 April 2016 has introduced a key new category called Indigenous Designed Developed and Manufactured (IDDM), which has been given the highest priority. The category refers to products procured from Indian vendors that have either been designed, developed and manufactured with at least 40 per cent indigenous content, or products that have 60 per cent indigenous content on a cost basis, but have not been designed and developed indigenously.