MoD’s iDEX-DIO signs its 100th defence innovation contract - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Wednesday 27 July 2022

MoD’s iDEX-DIO signs its 100th defence innovation contract

iDEX officials signing the 100th contract for defence innovation with Pacify Medical Technologies Pvt Ltd in New Delhi


By Ajai Shukla

Business Standard, July 27, 2022


In April 2018, Prime Minister Narendra Modi launched a project named iDEX (Innovations for Defence Excellence), billed as the Ministry of Defence’s (MoD’s) flagship for technological innovation. iDEX was to encourage start-ups and provide them a platform for co-creation and co-development in defence and aerospace technology.


On Tuesday, iDEX signed its 100th contract in New Delhi with with a firm called Pacify Medical Technologies Pvt Ltd.


Speaking on the occasion, Defence Secretary Ajay Kumar said: “We are confident that iDEX will make India the biggest defence innovation ecosystem in the world.”


On its website, iDEX is defined as: “An ecosystem to foster innovation and technology development in defence and aerospace by engaging innovators and entrepreneurs to deliver technologically advanced solutions for modernising the Indian military.”


iDEX is funded and managed by the “Defence Innovation Organization” (DIO), which is a ‘not for profit’ company as per Section 8 of the Companies Act 2013. Its founder members are the two biggest defence public sector undertakings (DPSUs): Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL). 


“iDEX will function as the executive arm of DIO, carrying out all the required activities while DIO will provide high level policy guidance to iDEX,” says the iDEX website.


“With these actions of the Government, the expenditure on defence procurement from foreign sources which used to be 46 per cent of the overall expenditure has reduced to 36 per cent in the last four years i.e. 2018-19 to 2021-22,” the MoD stated in Parliament on Monday.


Defence start-ups and micro, small and medium enterprises (MSMEs) are encouraged to present technological solutions to functional problems that the military periodically raises as “challenges”.


Innovations judged to be technologically viable are considered for funding and for being accorded an “acceptance of necessity” (AoN), which is the entry into the military’s potentially lucrative procurement pipeline.


In a little over four years iDEX, has sought to be a game changer in the defence acquisition eco-system through highly publicised programmes such as the Defence India Start-up Challenges (DISC), and Prime and Open Challenges.


“DISCs are launched with problem statements (PS) from armed forces and Ordnance Factory Board/Defence Public Sector Undertakings (OFB/DPSUs) for resolution by innovators,” says the iDEX website.


Open Challenges are directed at India’s “next generation of engineers, capable of developing technologies in autonomous systems, intelligent machines, advanced materials, predictive algorithms, or even rocket engines, for the most sophisticated applications in defence and aerospace domains.”


The iDEX Open Challenge seeks out their technology capabilities. “If you think you have an idea, technology or a product that has use in defence and aerospace, then iDEX Open Challenge is the right opportunity for you to grab,” states the iDEX website.


Innovators, startups and MSMEs are encouraged to engage directly with the military through the iDEX Open Challenge and to showcase what they have to offer. Selected applicants are offered a chance to pitch to the iDEX grand jury and qualify for grants and investments.


Similarly iDEX Prime (Sprint) provides an opportunity for innovators to design and develop specified military equipments, such as boats for Special Forces, with the MoD paying half the development cost, up to a ceiling of Rs 10 crore.


The “technology development” head in the defence budget has traditionally been allocated single-digit, or double-digit, amounts for these high-tech development projects. This year, however, in the 2022-23 capital budget, a substantial Rs 1,365 crore has been allocated.


“Till date, iDEX has launched iDEX Prime, seven rounds of DISC (including DISC SPRINT) and five rounds of OC, receiving more than 4,000 applications from individual innovators, MSMEs and start-ups. More than Rs 250 crore worth of projects have been allocated and procurement of 14 items worth over Rs 400 crore have been cleared. iDEX has also been able to generate thousands of jobs and attract India’s talent back to the country,” said the MoD in a statement on Monday.


In the last four years, 17 start-ups in 14 projects have already been accorded the Acceptance of Necessity (AoN) by Defence Acquisition Council (DAC) for trial and procurement. Projects from balance of DISC 1 & 2 and some from DISC 3 are nearing completion and may be accorded AoN by DAC by end of current Financial Year.

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