IAS Gyan

Daily News Analysis


18th August, 2023 Security

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  • The Defence Ministry’s Technology Development Fund (TDF) scheme, has so far supported 41 MSMEs and 20 startups.

Technology Development Fund (TDF)

Initiation and Execution

  • Technology Development Fund (TDF) program was initiated by the Ministry of Defence, India and executed by the Defence Research and Development Organisation.


  • Launched in 2016 it was established with the aim of promoting self-reliance in the nation’s defence technology, it is a part of the popular Make in India
  • 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 grants-in-aid for the development of indigenous technology, the Scheme also provides the industry with various benefits.


  • The programme meets the needs of the nation’s Tri-Services, DRDO, and defence production.

[Ministry of Defence, India, has been trying to foster defence innovations in private sector industries. It has entrusted the DRDO with the task of making functional the technology development fund. Private industries are encouraged to involve in research, and DRDO guides them in tasks related to high-risk development.]

  • The scheme enables industries to take part in development processes in high-end technical fields to expedite the process of production without having to bear the burden associated with Research & Development expenses. The significant aspect of the scheme is the development of solutions based on Science & Technology that have the potential to achieve desired results.

Key Objectives of TDF

  • Encouraging participation of Indianprivate and public sector industries—with more focus on MSMEs—this scheme aims at creating the environment for improving the innovative technology calibre of defence application through the inculcation of Research & Development culture in the industry.
  • Technology development fund that was released by the DRDO is expected to enhance and encourage Research & Development activities in the private sector. The fund accomplishes its objectives by encouraging knowledge transfer to the industry as well as by developing new ideas that help generate new products or services.
  • The fund takes into account the fact that innovationis influenced by various factors having diverse characteristics such as engineering, new and advanced designs, innovative production methods, and other preliminary tasks that might allure entrepreneurial investors to such novel projects or to the concerned company itself.
  • Limiting the development of product prototypes or technologies that prove useful for the specific services and restricting the development period to two years.

Necessity of TDF

  • Despite having made great strides in technology, India has not made its mark when it comes to achieving rapid growth in the field of the defence technology domain.
  • This has resulted in India being necessitated to import defence equipment on a large scale. The nation has realized the shortcoming and the Technology development fund is one of the crucial schemes devised in order to address this issue.

Technology Development Covered by the TDF

  • The central idea behind the Technology Development Fund scheme is to inspire the modern industry to take an active part in research to come up with effective solutions. The industry is encouraged to work in partnership with research institutions and academia for achieving innovative solutions by leveraging Science & Technology.
  • The Technology development fund scheme covers technology development in terms of the following:
    • Development of innovative services and products that prove to be useful for the nation’s defence applications.
    • Significant improvement or upgradation and further progress in the existing process, application, products, etc.
    • Introduce or import substitutes for components of the technologies related to which are not available in the Indian industry.
    • Upgrading the technology readiness level, starting with TRL3 to product realization according to Tri-Service’s needs.

Methodology of TDF

  • The Academia can take part in all levels of this scheme, starting with technology gap identification to creating the technology required. Academic and industry circle support is anticipated, facilitating talent generation at all levels.
  • Technological innovations and newer, better technologies are expected to be created by making use of R&D. This will ensure the availability of skilled manpower to the Indian industries, paving the way for manufacturing novel products efficiently.
  • The scheme is limited to the development of a prototype of a product or technologies that have potential use for the services. The development period is limited to two years. Funding is initiated through the provision of grants by the scheme, to the industry that can collaborate with research organizations or academia for carrying out R&D and 
  • Entities chosen for the purpose will be known as Development Agencies, and their work involvement must not go beyond the limit of 40% of the entire efforts required.
  • Prospective developers are required to submit proposals related to the specific need using the online system. According to the procedures laid down and detailed criteria as given in standard operating procedure, developers will be selected. The scheme allows only Indian vendorsand associations of persons as mentioned in the standard operating procedure (SOP) to participate in the scheme.

Eligibility for TDF

  • Indian private and public industries, including MSMEs.
  • Projects up to INR 10 Crores are eligible for funding; subject to a maximum of 90% of the entire cost of the project. However, 100% of funding may be considered on a case-to-case basis.
  • In the event of research organisations or academia being involved in the work, their contribution is limited to 40% of the efforts.

Exclusive Benefits of TDF Scheme to Industry

  • Successful development enables development agencies to jointly own the IPR along with the DRDO.
  • Eligibility to sell to Government directly via IDDM (Make) category
  • Exportto friendly nations.
  • Licensing a product to a different entity.
  • Seeking direct sale in the private marketplace for the development of spin-offs and dual-use technology.
  • Technology Development Fund is a catalyst fund that is dedicated to transforming high-impact academic and innovative technologies into independently validated and later-stage opportunities that are sought by investors and industry partners. The DRDO-Academia partnership is followed in the project mode via research boards in the Aero, Naval, Life Sciences, and Armaments domains. Having signed MoUs with top-ranking institutions and Universities such as IITs for collaborative research, this scheme is expected to bring revolutionary changes to the field of defence technology.


Is this Scheme specific to any sector?

  • Yes (Defence and Aerospace)

Can an organisation apply in multiple TDF Projects simultaneously at the same time?

  • Yes

What is the nature of the proposals to be supported under TDF Scheme ?

a) Significant up-gradation/improvements/ further developments in the existing products/process/application etc

b) Technology readiness level up-gradation from TRL3 onwards to realization of products as per Tri-Services requirements

c) Development of futuristic technologies/innovative products which can be useful for the defence applications

d) Import substitution of components whose technologies does not exist with the Indian industry.

Is MSME/Startup firm still eligible to compete for TDF award if it forms a 50-50 joint venture with a non-profit or foreign firm?

  • No (The Industry with excess of 49% foreign investment will not be eligible)

How can non-profit research institutions qualify to participate in the TDF program ?

  • Non-profit research institution can only apply in collaboration / association with an Indian Industry. Indian Industry will be the Lead Bidder.


Q. Consider the following statements with reference to Technology Development Fund (TDF):

1.Technology Development Fund (TDF) is a program initiated by the Ministry of Commerce and Industry.

2.It is a part of the “Make in India” Initiative.

3.Projects up to INR 10 Crores are eligible for funding; subject to a maximum of 90% of the entire cost of the project.

4.Indian private and public industries are eligible for Technology Development Fund.

How many of the above statements are correct?

A) Only 1

B) Only 2

C) Only 3

D) All 4

Answer: C) Only 3

Technology Development Fund (TDF) program was initiated by the Ministry of Defence.