Defence startups in HAL, BEL cross-hairs

Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL) are scouting for defence startups to build a culture of innovation. As the initial contributors to the ₹100-crore defence innovation fund, announced by former Defence Minister Manohar Parrikar, both HAL and BEL are seeking startups that will help provide small, low-cost military grade innovations to minimise imports and to help the country achieve self-reliance and indigenisation.

As technologies like artificial intelligence, robotics, drones, and advanced cyber security tools gather steam, the Defence Public Sector Undertakings (DPSUs) maintain startups in the defence sector, and early-stage tech companies as well as SMEs are well-positioned to contribute to the defence industrial base.

The potential is huge. Amit Cowshish, a former financial advisor to the Ministry of Defence told

BusinessLine , that “unlike other sectors, startups in the defence sector have to contend with the fact that it is a monopsony. These startups have a tremendous potential, but they cannot expect to sell whatever they come up with unless there is a demand from the armed forces. The armed forces, in turn, cannot replace existing inventory as soon as new technology is developed by entrepreneurs.”

This leads to an impression that defence startups “are not getting as much encouragement as they deserve, which is not entirely correct.”

Briefing the startups

To amend the anomaly, and to provide a platform for defence PSUs and startups, 40 defence startup enterprises were invited by BEL and HAL recently to showcase their capabilities and to identify areas of partnerships in manufacturing as well as design, development and services. The aim was to help “create awareness on the opportunities available and to facilitate interaction between the bigger defence PSUs and smaller startups”.

Startups in the “defence electronics field and the aerospace sector were briefed about the stringent quality measures and reliability standards that were needed at every stage and the need to upgrade constantly,” sources said.As Chief Minister of Goa, Manohar Parrikar , has now also reiterated his interest in building technologies for the forces and earmarked funds for Goan startups in the defence sector. As Defence Minister in February 2017, Parrikar had announced the initiation of the defence innovation fund at the Aero Show in Bengaluru.

In Goa, announcing his plans to set up a Startup Promotion Board, on the lines of the Foreign Investment Promotion Board, Parrikar earmarked ₹15 crore to boost the startup sector in the State. Of this, “a substantial amount would be allocated for defence startups as Parrikar has vocalised his interest on several occasions. He had launched funds to build products for the Army,” said sources.