Policy Update
Atharva Salunke
Background:
India’s drive for self-reliance in defence production has been a paramount national agenda, closely interlinked with strategic autonomy and economic development. Defence Production Policy of 2011 focused on eliminating foreign dependence on suppliers and encouraging indigenous capability in defence technology. Yet gaps existed in the domestic industry, especially in advanced technologies and systems that had not been indigenously developed within the country. Realizing this challenge, the Government of India declared the establishment of the Technology Development Fund in the Union Budget of 2014-15.
Envisioned as a flagship scheme of the Make in India initiative, the scheme is implemented by the Defence Research and Development Organisation. The Technology Development Fund grants assistance in the form of grants-in-aid to Indian industries, particularly MSMEs and start-ups, as well as academic and research institutions to conduct research, design and development of advanced defence and dual-use technologies. By narrowing the interface between the Armed Forces, industry, academia and certification bodies, the scheme promotes collaborative research and innovation.
The scheme not only covers the proof of concept and prototype development but also guarantees that the Intellectual Property Rights created are shared jointly between DRDO. In the end, the scheme aims to attain Aatmanirbharta by developing a strong ecosystem for indigenous defence production.
Functioning:
The Technology Development Fund operates through a formal mechanism with several committees and organizations under the Defence Ministry. The Empowered Committee, headed by the Secretary DDR&D, is the highest decision-making body on policy, procedure and project sanction, while the Technical Committee, headed by DG (TM) DRDO, defines technologies, assesses feasibility, tracks progress and suggests appropriate projects. The Directorate of Technology Development Fund serves as the coordinating body, receiving proposals, tracking implementation and undertaking outreach programmes.
The program operates a systematic approach starting with the identification of possible projects from long-term technological plans, headquarters of services and innovation competitions. Feasibility studies are carried out to determine the capability of the industry, time and cost, followed by drafting of a Statement of Case for approval. After clearance, a Project Monitoring and Mentoring Group is formed to draft Project Definition Documents, analyze Detailed Project Reports and monitor progress. Development Agencies, normally MSMEs, start-ups or consortia, are chosen under an open evaluation process. Financing is milestone-driven, with regular reviews to promote accountability and effective delivery of defence technologies.
Performance:
The Technology Development Fund has become an essential tool in supporting India’s defence self-sufficiency by bringing industry, academia and research institutions into the innovation system. The scheme perfectly aligns with the Aatmanirbhar Bharat vision by actively engaging with start-ups and MSMEs in indigenous defence technology design and development. Financial assistance up to Rs 50 crore is provided as a grant-in-aid, allowing enterprises to take up projects that would otherwise be out of their means.
Since its inception, 78 projects amounting to about Rs 333.21 crore have been approved under the scheme. Of these, 27 technologies in 10 projects have already been developed successfully, which is a major progress towards minimizing reliance on imports. In the last year alone, various fresh projects related to fields like high-power microwave devices, high-end ballistics, smart fabrics, quantum, naval systems, artificial intelligence, robotics and photonic technologies have been approved, indicating the scheme’s focus on cutting-edge and deep-tech fields.
| S No | Name of the Project | Name of DA | Industry Status MSME/ Large/Startup (DA) | Industry Type \(DA) |
| 1. | IRNSS-based Timing Acquisition and Dissemination System | M/s Acord Software & System Pvt. Ltd., Bangalore | Large | Pvt. Ltd. |
| 2. | Underwater Launched Unmanned Aerial System | M/s Sagar Defence Engg. Pvt. Ltd., Pune | Start-up | Pvt. Ltd. |
| 3. | Development of Indigenous Scenario & Sensor Simulation Toolkit | M/s Oxygen 2 Innovation Pvt. Ltd., Noida | Start-up | Pvt. Ltd. |
| 4. | Development of Indigenous Scenario & Sensor Simulation Toolkit | M/s Craftlogic Labs Pvt. Ltd., Bangalore | MSME | Pvt. Ltd. |
| 5. | Long Range ROV for UW object detection and neutralization | M/s IROV Technologies Pvt. Ltd., Kochi | Start-up | Pvt. Ltd. |
| 6. | Development of Graphene-Based Smart and E-Textiles for Multifunctional wearable applications as EXP | M/s Aloha Tech Ventures Pvt. Ltd., Coimbatore | Start-up | Pvt. Ltd. |
| 7. | 75 KVA Constant Frequency Alternators EXP | M/s VEM Technologies Pvt. Ltd., Hyderabad | MSME | Pvt. Ltd. |
| 8. | Radar Signal Processor with Active Antenna Array Simulator | M/s Data Patterns (India) Limited, Chennai | Large | Limited |
Table 1: Projects sanctioned under the TDF scheme during the current year (January 01, 2024, to June 30, 2024)
To drive faster progress in cutting-edge technologies, a further corpus of Rs 500 crore has been sanctioned to establish a separate vertical for deep-tech projects. Nine projects have been initiated under the program so far and four are being undertaken through DRDO Industry-Academia Centres of Excellence.
| S No | State | Institute of PI | Institute of Co-PI | No. of Projects Sanctioned |
| 1. | Andhra Pradesh | IIT TirupatiGITAM UniversityCollege of Engineering Andhra University, Visakhapatnam | – | 111 |
| 2. | Arunachal Pradesh | Central Agricultural University, Pasighat, Arunachal Pradesh | Pachhunga University College, Aizawl (01) | 1 |
| 3. | Assam | IIT GuwahatiCSIR-NEIST, Jorhat | Assam University, State Public Health Lab, Assam, Mizoram UniversityIIT Jammu (01) | 24 |
| 4. | Delhi | IIT Delhi | AIIMS (01), IIIT Delhi (01) | 56 |
| 5. | Gujarat | Gujarat UniversitySVNIT, Surat | C K Pithawala, Surat (01) | 21 |
| 6. | Jammu and Kashmir | IIT JammuCentral University, Jammu (CUJ) | – | 27 |
| 7. | Jharkhand | IIM Ranchi | – | 1 |
| 8. | Karnataka | IISc BengaluruNational Institute of Advanced Studies (NIAS), BengaluruNIT SurathkalIIT Dharwad | CoEP Pune (01), IIT Madras (01), NAL Bengaluru (01),ARCI Hyderabad (01), CGC RI Kolkata (01) | 36211 |
| 9. | Madhya Pradesh | Atal Bihari Vajpayee Indian Institute of Information Technology and Management (ABV-IIITM) Gwalior | – | 1 |
| 10. | Maharashtra | IIT BombayDIAT Pune | – | 162 |
| 11. | Meghalaya | NIT Meghalaya | NIT Manipur | 1 |
| 12. | Mizoram | Mizoram UniversityNIT Mizoram | NIT Nagaland (01) | 101 |
Table 2: Projects Sanctioned under TDF Scheme
Between January 2023 and June 2024, Rs 120 crore was allocated, against which Rs 43.89 crore was disbursed. A total of 16 MSMEs and 20 start-ups benefited from such grants. Within the last five years, 26 indigenous technologies have come into being, giving a very big second wind to the nation’s defence capability.
| S No | Successfully developed Technologies |
| 1. | AVPSM, ARINC 818 for an Advance Military Aircraft |
| 2. | SMFD (Smart Multi-Functional Display) for an advanced Military Aircraft |
| 3. | 40TPH Pump (Submersible for watering & dewatering) for Indian Naval Ship |
| 4. | 125 TPH Pump (Recirculation Pump) for Indian Naval Ship |
| 5. | Pru Decorp 340mg capsule for decontamination CS/TL from the body during Nuclear Emergency |
| 6. | Pru Decorp Mg 500mg capsule for decontamination CS/TL from the body during Nuclear Emergency |
| 7. | Development of Health Usage and Monitoring System (HUMS) for MIG-29 K |
| 8. | Development of WT/GT (Water Tight/Gas Tight) EMI/EMC compliant doors for Naval platforms |
| 9. | Development of WT/GT (Water Tight/Gas Tight) EMI/EMC compliant Hatches for Naval platforms |
| 10. | V/UHF Blade Antenna for Aircraft Application |
| 11. | Development of a Temperature Transducer for Aircraft Application |
| 12. | Propellant & Thruster for Low Orbit Satellite using Ethanol & Hydrogen peroxide propellant system |
| 13. | Propellant & Thruster for Low Orbit Satellite using non-toxic Hydrazine Nano propellant system |
| 14. | VLF Loop Aerial system for U/W platform |
| 15. | VLF-HF Matrix for U/W Platform |
| 16. | Al based detection of a person based on physiological parameters |
| 17. | Software to predict sensor reading within Noncontact strain measurement |
| 18. | Software for virtual sensor implementation in AGTE for strain measurement |
| 19. | Virtual sensor for compressor & turbine tip measurement in AGTE |
| 20. | Development JT cryocooler for missile application |
| 21. | Multi-therapeutic technologies seeking for faster healing |
| 22. | Development of Simulator for Unmanned Ground, Marine (Sea-surface and Underwater) and Aerial Vehicles |
| 23. | Development of Tools for Data Assessment Active learning & Believability for Visual Data |
| 24. | Autonomous Drone as first responder for search & report mission in enclosed/indoor environment |
| 25. | Surge relief valve for F1F2, F1A tank, wing tank |
| 26. | AC double-ended fuel booster pump for aircraft application |
Table 3: List of Successfully Developed Technologies under Technology Development Fund (TDF) Scheme
Impact:
The Technology Development Fund has contributed substantially to India’s journey toward defence self-reliance. By imparting grants to the Indian industries, start-ups and MSMEs, it has established an enabling ecosystem for innovation and design in sectors hitherto reliant on imports. Over the years, it has supported several projects in highly advanced domains such as aerospace systems, photonics, naval technologies, high-power lasers, artificial intelligence (AI), robotics, and additive manufacturing. These projects have thus far seen an increasing number of developed technologies that are being put into use for defence applications.
The scheme has laid the foundation for R&D collaborative partnerships between the industry, academia and research institutions, thus fostering capacity-building opportunities and creating avenues for skilled employment in the defence sector. The recent sanction of a dedicated Rs 500 crore corpus for deep-tech projects has added a fresh thrust to it in the promotion of cutting-edge research. Overall, TDF has come out as a strong driver of innovation, import substitution and strategic autonomy.
Emerging Issues:
Project approvals, delay in the release of funds, slow down the development and are often at the very root of untimely deliveries. MSMEs and start-ups, owing to their limited financial and technical resources, face issues with certification and compliance requirements. Coordination among stakeholders such as industry, academia, armed forces and certifying agencies may at times result in procedural impediments. Sharing intellectual property, while important, can become a venue for disputes with regards to commercialization. Enhanced industry involvement and assured procurement are also key to conversion of scale-up prototypes into full production systems to keep a pace with innovations.
Way Forward:
It is suggested that the government launch an all-encompassing capacity-building program to enhance the technical and management skills of MSMEs and start-ups working under the Technology Development Fund. This would enable Indian industries to compete with international standards in defence research, design and production.
It is advised that a specific digital portal is created to make communication, proposal filing and fund management for each participating company easy. This will enhance transparency, facilitate efficiency in monitoring the projects and give real-time reports to stakeholders.
References:
- Press Information Bureau. (2025, July 25). Technology development fund scheme. PIB Delhi. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2148335
- Press Information Bureau. (2024, November 29). Technology development fund scheme. PIB Delhi. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2078917#:~:text=Since%20January%202023%2C%20a%20total,TDF%20Scheme%20since%20January%202022
- Press Information Bureau. (2024, August 2). Technology development fund scheme. PIB Delhi. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2040792
- Press Information Bureau. (2023, December 8). Technology development fund. PIB Delhi. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1983971
- Press Information Bureau. (2025, August 20). Transformation of India’s defence and internal security posture. PIB Delhi. https://www.pib.gov.in/FactsheetDetails.aspx?Id=149238
- Defence Research & Development Organisation, Directorate of Technology Development Fund. (2024, October). TDF standard operating procedure (SOP). Ministry of Defence, Government of India. https://tdf.drdo.gov.in/resources/sop
About the Contributor:
Atharva Salunke is a Policy Research Associate at NITI TANTRA and a Research Intern at IMPRI. He has recently graduated with a Bachelor’s degree in Political Science from Sir Parashurambhau College, Pune.
Acknowledgement: The author extends his sincere gratitude to the IMPRI team and Ms. Aasthaba Jadeja for her invaluable guidance throughout the process.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
Read More at IMPRI:
India-Qatar: Gas Trade and Energy Transition
Modified Electronic Manufacturing Clusters (EMC 2.0): India’s Electronic Transformation
