New Delhi (Sputnik) — In a bid to push domestic manufacturing, Indian government has decided to provide special fund to small defense manufacturing companies for developing new technologies. Termed as technology develop fund, Indian government will provide a sum of $1.5 million to every defense technology project of the firm. Fund is limited to development of technologies or prototype of product having potential use for the Services and typical development period of two years.

“Scheme has been started to promote self-reliance in Defense Technology as a part of the 'Make in India' initiative. It will encourage participation of private industries especially micro, small and medium enterprises so as to create an eco-system for enhancing cutting edge technology capability for defense application,” says Defense Research and Development Organization official.

Special fund for development of cutting edge technology was muted in year 2011 by previous government but could not find any corpus from annual budget.

“There are no clear indications of a big push being given to what could loosely be called Make-in-India in defense,” says Amit Cowshish, former financial advisor to the Ministry of Defense. Nevertheless, special fund to develop prototype is a very significant step towards giving push to private defense manufacturing.

Indian government has allocated $4.5 million for Indian Army and $2.1 million for Indian Air Force. “One is not sure how many projects the ministry is aiming to – or could possibly — take up under the ‘Make’ procedure during the next fiscal i.e. during April 17 to March 18,” Cowshish added.

Currently, most of defense research projects are undertaken by government controlled DRDO, based on the priorities of Armed Forces and existing capabilities. “According highest preference to purchase of Indian designed, developed and manufactured defense equipment in acquisition, and some changes in Defense Procurement Procedure 2016 are expected to catalyze investment into defense research, development and innovation,” says Subhash Bhamre, India’s Minister of State for Defense.