Technology Development Fund: Basics Explained

Ajay Bhatt, Minister of State in the Defence Ministry, in a written reply to a question in the Lok Sabha during the Monsoon session,  noted that out of the amount allocated, Rs 64.35 crore was disbursed as a grant-in-aid to industries for the development of defence technologies under  the Defence Ministry’s Technology Development Fund (TDF) scheme. It  has so far supported 41 MSMEs and 20 startups.

Launched in 2016 and executed by the Defence Research and Development Organisation (DRDO) under Make in India programme, the government has allocated Rs 260 crore under the scheme since its inception. Creating an ecosystem for promoting self-reliance by building indigenous state-of-the-art systems for defence application.

The Defence Ministry’s TDF scheme, aims to encourage the participation of Micro, Small & Medium Enterprises(MSMEs) and startups to design and develop various defence technologies indigenously,


  • The industry must be a public limited company, a private limited company, a partnership firm, a limited liability partnership, one-person company, sole proprietorship registered as per applicable Indian laws
  • The industry must be a MSME or a startup, registered in India
  • The industry must be owned and controlled by a Resident Indian citizen
  • Entity with excess of 49% foreign investment will not be eligible.

In June, 2022   enhancement of funding under Technology Development Fund (TDF) scheme of Ministry of Defence to Rs 50 crore per project from Rs 10 crore. in Union Budget 2022-23 25 per cent of defence R&D budget was earmarked for private industry, start-ups and academia. The enhanced funding will give further boost the vision of ‘Aatmanirbharta in defence’.

The scheme facilitates up to 90 per cent of the total project cost and allows industry to work in consortium with another industry/academia. With the enhanced funding, the industry and startups will be able to develop more complex technologies for existing and future weapon systems and platforms.

ABOUT THE PROGRAMMME. The focus will be on the development of technologies that will form the kernel of components/ assemblies, which will be in turn be used to develop defence equipment systems/sub-stems/platforms. The scheme will be limited to development of technologies or prototype of product having potential use for the Services. It is a programme of MoD (Ministry of Defence) executed by DRDO meeting the requirements of. Tri-Services, DDP and DRDO. To Utilize the emerging dynamism of the Indian industry. Leveraging domestic capabilities. Reducing large import component of material at both the system and sub-system levels. Growth of the Indian defence industry.


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