Context: The Defence Research and Development Organisation (DRDO) has sanctioned seven new projects for the private sector under the Technology Development Fund scheme.

What is Technology Development Fund (TDF) Scheme?

• Technology Development Fund (TDF) has been established to promote self-reliance in Defence Technology as a part of the ‘Make in India’ initiative.
• It is a programme of the Ministry of Defence. This programme is executed by the Defence Research & Development Organisation (DRDO) to meet the requirements of the Tri-Services, Defence Production and DRDO.
• The Scheme encourages participation of public/private industries, especially MSMEs and startups, so as to create an ecosystem for enhancing cutting-edge technology capability in the defence sector.
• The Scheme aims to provide a major fillip to the defence manufacturing sector by encouraging the industry to innovate on defence technologies, in order to place India on the self-reliance trajectory.
• In addition to providing the grants-in-aid for the development of indigenous technology, the Scheme also provides the industry with various benefits

Funding Support:

• • The project cost of up to INR 50 crorewill be considered for funding.
  • The funding may be up to 90% of the total project cost.
  • Industry may work in collaboration with academia or research institutions. The work involvement of academia cannot exceed 40% of the total project cost.
  • The funding will be linked to mutually agreed milestones.
  • Funds will be released either in advance against a bank guarantee of the same amount as collateral, or reimbursement based on the completion of milestones.
  • Subsequent instalments will be released on successful completion of milestones.
  • Project Duration: The maximum development period will be four (4) years.

Eligibility:

• A public limited company, a private limited company, a partnership firm, a limited liability partnership, a one-person company, or a sole proprietorship registered as per applicable Indian laws registered in India, especially MSMEs and Startups.
• The industry must be owned and controlled by a resident Indian citizen.
• An entity with an excess of 49 per cent foreign investment will not be eligible.
• Startups must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) as per Government of India (GOI) guidelines
• Startups incorporated for less than three years from the date of submission of application will be considered nascent startups.
• A nascent Startup should be incubated at one of the Central/State government-assisted incubators.