Introduction

• On June 8, 2022, the limit of funding for

innovative defence projects was increased from Rs
10 Crore to Rs 50 Crore per project, under the
Technology Development Fund (TDF).

• Funding has been enhanced in line with the

announcement made in Union Budget 2022-2023.
 TDF in Union Budget 2022-2023

• Union Budget 2022-23 has reserved 25% of

defence R&D budget for private industry,
academia and start-ups, in order to facilitate
increased funding for innovative TDF products.
 About Technology Development Fund (TDF)
• The TDF scheme was started by Defence Research and
Development Organization (DRDO).
• It supports the indigenous development of components,
Systems, products and technology by start-ups and
micro, small and medium enterprises (MSMEs).
• It facilitates up to 90 percent of the total project cost. It
allows the industry to work together with another
academia or industry.
 Aim of the scheme
• The Technology Development Fund Scheme was
launched with the aim of providing a major boost to
defence manufacturing sector encouraging industry
to innovate and develop defence technologies and
place India on the self-reliance trajectory.

• It is aimed at developing products for the military,

as well as for other strategic industries like Indian
Research Organisation (ISRO).
 Number of projects sactioned
under Scheme

• Till now, 56 projects have been sanctioned under the Technology

Development Fund Scheme.
 Significance of enhanced
funding
• Enhanced or increased funding would
help the industries and start-ups to
develop more complex technologies for
exiting as well as future weapon
platforms.
• With this, potent systems will get
developed. Bigger componies, along with
MSMEs, would also get support.
 How can small defence firms’
approach funding?
• Small defence firms can approach the Ministry of defence for funding under
four projects:

• iDEX (Innovation for Defence Excellence)

• iDEX Prime
• TDF and Make II and
• Make III projects.
 Different policies in defence
• Defence manufacturing is a critical aspect of any country's national security strategy, and it involves the
development, production, and maintenance of defence-related products, such as weapons, military
vehicles, and communication systems. Governments have several policies in place to promote and
regulate defence manufacturing, and some of the main policies are explained below:

• Defence Procurement Policy (DPP): DPP is a policy that governs the procurement of defence equipment
and systems by the government. It outlines the procurement procedures, criteria for selection of suppliers,
and the offset policy. The offset policy is a requirement for foreign companies to invest a certain
percentage of the value of the contract in the Indian defence industry.

• Make in India: Make in India is a policy launched by the Indian government in 2014 to promote domestic
manufacturing and attract foreign investment. The policy aims to create a conducive environment for
businesses to invest in India and establish a manufacturing hub for defence products.

• Defence Production Policy: The Defence Production Policy aims to promote self-reliance in defence
production and reduce reliance on imports. The policy encourages private sector participation in defence
manufacturing and provides incentives for the development of new defence technologies.
• Technology Development Fund: The Technology Development Fund is a
government-funded initiative that provides financial assistance to Indian companies
to develop new defence technologies. The fund aims to promote innovation in
defence manufacturing and reduce the country's dependence on foreign technology.

• Strategic Partnership Policy: The Strategic Partnership Policy aims to build long-
term partnerships between Indian and foreign companies for the development of
defence products. The policy encourages the transfer of technology and the
establishment of joint ventures between Indian and foreign companies.

• In conclusion, defence manufacturing policies are critical for promoting self-reliance,

innovation, and the development of a robust domestic defence industry. These
policies aim to regulate the procurement of defence products, promote domestic
manufacturing, and encourage collaboration between Indian and foreign companies
for the development of new technologies.
 Defence offset policy
• The defense offset policy is a strategy used by governments to promote domestic
industry growth in the defense sector, while also meeting their defense
procurement requirements. Under this policy, a percentage of the total value of the
defense contracts awarded to foreign companies is reinvested in the purchasing
country's economy, either by sourcing locally manufactured defense products or by
investing in research and development.
• The policy is typically implemented through various means, such as technology
transfer, co-production, and direct offsets. Technology transfer involves the
transfer of proprietary technology or technical know-how from foreign defense
companies to local companies. Co-production involves joint development and
manufacturing of defense equipment by foreign and local companies. Direct
offsets require the foreign defense companies to invest in the local economy by
buying products and services from local companies, building manufacturing
facilities, and establishing research and development centers.
 Defence offset policy
The main objectives of defense offset policy are to:
1.Promote domestic industrial base and encourage technology transfer.
2.Create employment opportunities and contribute to the economic
growth of the country.
3.Reduce the country's dependence on foreign suppliers for defense
equipment.
4.Encourage research and development in the country's defense industry.
5.Increase the operational readiness of the country's armed forces by
developing a strong and reliable domestic defense industry.
Many countries have implemented defense offset policies to varying
degrees, including the United States, India, and several European
countries.
 FDI in Defence

•FDI is an investment made by a firm or individual in one country into

business interests located in another country.

•Generally, FDI takes place when an investor establishes foreign business

operations or acquires foreign business assets, including establishing ownership
or controlling interest in a foreign company.

•It is different from Foreign Portfolio Investment where the foreign entity
merely buys equity shares of a company. FPI does not provide the investor with
control over the business.
 Routes through which India gets FDI:
•Automatic Route: In this, the foreign entity does not require the prior
approval of the government or the RBI.
•Government route: In this, the foreign entity has to take the approval
of the government.

• The Foreign Investment Facilitation Portal (FIFP) facilitates the single

window clearance of applications which are through approval route.
• This portal is administered by the Department for Promotion of Industry and
Internal Trade (DPIIT), Ministry of Commerce and Industry.
• Industrial Policy is the set of standards
Industrialand
Policy measures set by the Government to
evaluate the progress of the manufacturing sector that ultimately enhances economic
growth and development of the country.
• The government takes measures to encourage and improve the competitiveness and
capabilities of various firms.

Objectives of Industrial Policy

1. To maintain steady growth in productivity.
2. To create more employment opportunities.
3. Utilize the available human resources better
4. To accelerate the progress of the country through different means
5. To match the level of international standards and competitiveness
 National Design Policy
• The National Design Policy, though does not define design in the
document, it uses it mostly to refer to industrial design and styling,
arts & crafts design, traditional Indian crafts, or branding design. It
uses the word design mostly referring to the ‘artefact’, or as an
industrial design activity. The following phrases from the policy
document hint on that:
• “Encouraging use of design by small scale and cottage industries and
crafts”, “enhancing design and design service exports”, “recognises
and rewards original designs”, “promotion 7 of Indian design”,
“Design...providing competitive edge to products and services”,
“Design and brand driven value chain and Intellectual property
development including design registrations…”, “India…leading
influencer of global design, especially Asian design”, “…make India
major hub for exports and outsourcing of designs”
 National Design Policy
• In the National Design Policy document, what demonstrates the connotation of
design more is, not the above listed phrases, but the lack of two words – science
and technology. The word ‘science’ does not exist in the policy document, and
‘technology’ appears only twice, where in both cases, while referring to the need
for ‘access to technology’ to manufacture designs.
• “One key strategy of India’s National Design Policy is to develop strategic alliances
with design firms, institutions, associations and governments abroad. Developing
strategic alliances enhances the long-term competitive advantage of a firm by
helping companies leverage critical capabilities, increase innovation, acquire access
to technology and knowhow and increase flexibility in responding to market and
technological changes.
• “Enable the designers in India to have access to global trends and market
intelligence and technology tools for product development and innovations.”
 National Design Policy

• The above quotes from the policy documents demonstrate how

technology and design are perceived as differently. The call for ‘access
to technology’ shows the legacy practice of importing technologies to
India, whereas the focus of a national design policy should be on
‘creating new technologies’ itself through design. The main drawback
of this policy is, design is seen as a differentiator for products, which
hints at an industrial design activity. Though this is very important, the
NDP as a national policy on design takes a narrow definition of design.
 What is the National IPR Policy?
•About:
• The Department for Promotion of Industry and Internal Trade (DPIIT) under
the Ministry of Commerce adopted the National Intellectual Property Rights
(IPR) Policy in 2016.
• The main goal of the policy is "Creative India; Innovative India".
• The policy covers all forms of IP, seeks to create synergies between them and
other agencies, and sets up an institutional mechanism for implementation and
review.
• DPIIT is the nodal department for IPR development in India and the Cell for
IPR Promotion & Management (CIPAM) under DPIIT is the single point of
reference for implementing the policy.
• India's IPR regime complies with World Trade Organisation's (WTO) agreement
on Trade Related Aspects of Intellectual Property (TRIPS).
•Objectives:

• IPR Awareness: Outreach and promotion are important to create public awareness about
the economic, social and cultural benefits of IPRs among all sections of society.
• Generation of IPRs: To stimulate the generation of IPRs.
• Legal and Legislative Framework: To have strong and effective IPR laws, which
balance the interests of rights owners with larger public interest.
• Administration and Management: To modernise and strengthen service-oriented IPR
administration.
• Commercialisation of IPRs: Get value for IPRs through commercialisation.
• Enforcement and Adjudication: To strengthen the enforcement and adjudicatory
mechanisms for combating IPR infringements.
• Human Capital Development: To strengthen and expand human resources, institutions
and capacities for teaching, training, research and skill building in IPRs.
The Government of India has announced a National Manufacturing Policy with the
objective of enhancing the share of manufacturing in GDP to 25% within a decade
and creating 100 million jobs. The
National Investment and Manufacturing Zones (NIMZ) are an important
instrumentality of the manufacturing policy.
The Central Government will create the enabling policy framework, provide
incentives for infrastructure development on a Public-Private Partnership (PPP) basis
through appropriate financing instruments, and State Governments will be
encouraged to adopt the instrumentalities provided in the policy
Objectives of National Manufacturing Policy
The government of India decided to bring out the National Manufacturing Policy to
bring about a quantitative and qualitative change with the following six objectives:
•Increase manufacturing sector growth to 12-14% over the medium term to make it
the engine of growth for the economy. The 2 to 4 % differential over the medium-
term growth rate of the overall economy will enable manufacturing to contribute at
least 25% of the National GDP by 2022.
•Increase the rate of job creation in manufacturing to create 100 million additional
jobs by 2022.
•Creation of appropriate skill sets among the rural migrant and urban poor to make
growth inclusive.
•Increase domestic value addition and technological ‘depth’ in manufacturing.
•Enhance global competitiveness of Indian manufacturing through appropriate
policy support.
•Ensure sustainability of growth, particularly with regard to the environment
including energy efficiency, optimal utilization of natural resources and restoration
of damaged/ degraded eco-systems
Significance of National manufacturing Policy
•India skipped the second stage of economic transition(i.e., primary sector takeover of
the primary sector) and became a service economy predominantly. The manufacturing
sector’s share in the Indian economy is stuck at 16%. The National Manufacturing Policy
aims to increase the share of the manufacturing sector to GDP from 16% to 25% by
2022.
•This is a holistic policy for the promotion of the manufacturing sector in the country.
•NMP helps in improving the performance of Small and Medium Enterprises (SMEs) by
providing incentives for their growth.
•Industrial training and skill up-gradation measures for the young workforce.
•NMP proposed rationalisation and simplification of business regulations to reduce the
burden of procedural and regulatory compliance on businesses.
•It aims to set up Financial and institutional mechanisms for technology development,
including green technology.
•A Special Purpose Vehicle (SPV) will be constituted by the State Government to
discharge the functions specified in the policy.
•Mechanisms may be developed for the cooperation of public or private institutions with
government inspection agencies under the overall control of statutory authorities.
•Support to PPPs in Infrastructure in the form of capital grants at the stage of project
construction will be given as per the Viability Gap Funding guidelines.
 North East Industrial & Investment Promotion Policy (NEIIPP)
• With a view to give a further boost to industrialization in the North
Eastern Region, the erstwhile North East Industrial Policy (NEIP),
1997 was revised and a new policy, namely North East Industrial &
Investment Promotion Policy (NEIIPP) 2007, was notified w.e.f.
1.4.2007 which will remain in force upto 31.03.2017. Benefits under
NEIIPP, 2007 have also been extended, for the first time, to select
Service Sector units, Bio-technology units and Power Generating
units (up to 10 MW), besides industries in the manufacturing Sector.