Government of India in recent times have tried to encourage startup by the help of various schemes and policies. Startup in turn have contributed positively in both employment generation and economic development. One such recent development has been done by way of introducing the Technology Development Fund (TDF) under the Ministry of Defence.

 The fund has been set up by the Government of India under the ‘Make in India’ initiative to create an eco-system for enhancing cutting edge technology capability by inculcating R&D culture in Industry for building indigenous state-of-the-art systems for defence applications. The major issue with the completion of any project is the grant of money on time. But by introducing such a scheme project will not take more than two years to complete. The money will be granted in the form of grants to public and private sector companies, including MSMEs (up to 90% of project cost) that may collaborate with academic or research institutions to carry out innovation, research, and development, with a maximum award of INR 10 crore per project.

The initiative will enable start-ups and MSMEs to participate in development processes in high-end technological sectors in order to speed up the manufacturing process without incurring the costs associated with R&D. The scheme’s most important feature is the creation of science and technology-based solutions with the ability to accomplish targeted outcomes.

Technology Development Fund and Start-ups: Achievements till date

 Technology Development Fund (TDF) Scheme is a program of MoD executed by DRDO under Make in India initiative. TDF Scheme has been authorised by the government to encourage companies, particularly MSMEs and start-ups, to develop diverse defence technology. Pursuant to the formulation of TDF there has been significant development in the technology driven start-up ecosystem of India. Some of the major benefits received by start-ups under the TDF scheme are as follows:

  • Under the TDF initiative, a total of 06 projects worth Rs. 3310.58 lakhs have been given to 06 companies, with one project in the field of space technology being awarded to two startups.[1]
  • Startups and MSMEs can now avail Rs 10 crore as Technology Development Fund (TDF) to develop cutting-edge solutions for DRDO’s defence technology.[2]
  • As of 2021 around 37 projects costing Rs 191 Crores have been awarded to various businesses, particularly MSMEs and Startups, via the TDF scheme.  Further a total fund of Rs 28,51,45,680/- has been released to various Developing Agencies.[3] 
  • Evolution of new industry-friendly patent policy for transfer of DRDO developed technologies to industries. The policy will help Indian startups to get free access to use DRDO patents and work on innovative solutions aimed to improve India’s defence capabilities.[4]

Process of Grant under TDF for Start-ups

Users (Army, Navy, and Air Force) submit requests to the Directorate of Futuristic Technology Management (DFTM) at DRDO headquarters under the TDF scheme. On its website, TDF floats a problem statement. It offers a grant of up to ten crore rupees. Furthermore, start-ups and small businesses invest only 10% of their revenue on development. As a result, the DRDO is responsible for practically all development. They provide handholding assistance, such as on-site product testing. Every two months, they assess the work and provide feedback. DRDO also provides mentorship through its laboratories.


The Technology Development Fund is a catalyst fund committed to turning high-impact academic and breakthrough technology into independently evaluated and later-stage possibilities that MSMEs and Start-ups are looking for. The engagement of start-ups in the specific needs of the Tri-services in the Defence sector shall not only foster an indigenous innovation in defence technologies but also encourage the start-up industry to contribute innovative solutions to the most crucial sector of the Country.  

[1] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1796968

[2] https://www.newindianexpress.com/cities/hyderabad/2021/sep/04/rs-10-crore-fund-for-startups-msmes-under-drdo-scheme-2354166.html

[3] https://smestreet.in/limelight/37-projects-of-value-over-rs-191-crores-awarded-under-technology-development-fund-mainly-benefitted-msmes-startups/

[4] https://inc42.com/buzz/govt-says-194-defence-tech-startups-under-startup-india-reveals-idex-data/

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