By Lieutenant General (Dr) V. K. Saxena
The goal of ‘Atmanirbhar Bharat’ (Self-Reliant India) is our cherished dream. So is the one for ‘Viksit Bharat’ by 2047!
While we live in hope of achieving the above, the precious assets of our country that fuel those dreams must be protected. Without such protection, these assets will die an undeserved death at the hands of fraudulent players and/or indifferent policies.
The Assets Defined: What drives Atmanirbhrata (Self-Reliance)? It is India’s capability to design and develop indigenous products for all our needs. Translating to defence, it is the capability of the Indian defence Industry to design, develop, and manufacture all that is needed for our Armed Forces. Like they say, winning Indian Wars with Indian Weapons! It is the Intellectual Property (IP) generated by Indian companies that actually defines Atmanirbharta.
DAP 2026 for Celebrating Atmanirbharta: Draft Defence Acquisition Procedure (DAP) 2026 makes a welcome transition from ‘Make-in-India’ to ‘Owned by India’, making a clear preference from mere ‘manufacturing’ of products to ‘owning’ the IP. IP defines self-reliance.
Avenues to Create IP: What is required to create the IP? A lot. It demands investment of crores of Rupees in Research and Development (R&D) to create a prototype and set up an entire ecosystem of hardware, software, and skinware to convert ideas into products.
There are two ways to achieve the above. One is through the government-assisted policies, such as funding up to 70% to 100% in Make projects, or the incentives and financial support through the Programmes like the iDEX/Technology Development Fund (TDF), etc.; the other is through the route of investing private capital.
The Challenging Route: It is the second route that is full of challenges, uncertainties, and huge financial risks. Herein, an Indian vendor invests his own capital in self-funded R&D with the hope of realising a product that may meet the requirements of the armed forces one day. What if the R&D does not result in a viable product? What if the prototype remains short of the SQR? What if there is no assurance or orders or their continuity after the first purchase? This can go on.
All these are real risks that all mean huge financial sunk costs to the vendor who sets out to create a product that we can call ‘proudly Indian’. She is very different from all the others who are riding the ‘government funding’ and trying to create products. If they succeed, great! If not, the government loses, a minimal risk venture.
PSFIR Defined: Let’s call the first category the Privately Self-Funded Indigenous R&D (PSFIR) vendors. These are the players who stick their neck out, spend crores out of their own funds, and run the risk of losing them all in a dream to create IP. The country needs to protect its PSFIRs from the threats they face. How can we do it?
Protection in Action: DAP 2026 must include all the requisite provisions that protect the PSFIR vendors from fraudulent players and indifferent policies. Here are some of the recommendations:-
* To grant protection, the DAP must acknowledge and define the PFSIR vendor as an Indian Company that has conceptualised, designed, developed, and proven a product entirely from its own private capital, with no direct or indirect government R&D grant or government-sponsored development finance.
* Next, the PSFIR vendor must be equated in the same class as DRDO/DPSU/other Central Government Research Organisations when it comes to the applicability of the procedure for acquisition and induction of systems. Look at the risk asymmetry! If a public sector entity fails to create the IP, the funds spent are ‘written off’ as ‘Technology Demonstration’ (case in point: Trishul SAM system by DRDO). If the PSFIR vendor fails, the vendor is doomed.
* Let’s say the DRDO/DPSU/Central Research Organisations undertakes the entire procedure from idea to product using government funding and reaches a stage of ‘ready product’. If a PSFIR vendor has reached the same stage using its own funds, its product must be equated to the DRDO product as if ‘post the CDR’ stage. Asking the PSIFR vendor to enter the design pipeline as a matter of ‘procedure’ is conceptually flawed and must not be forced on her.
* If the public sector entity designs and develops a product that meets the Service QR, the entity enjoys non-applicability of the Single Vendor Case (SVC). What about a PSFIR that spends its own funds with all attendant risks and still reaches the same end state? Surely it also must enjoy the same non-applicability.
* Similarly, the provision for five-year reserved procurement for quantities beyond the minimum order quantities or repeat orders that apply to DRDO/Central Government Research Organisations must also be extended to PSFIR vendors who have developed the product using private capital. This will provide them with a period of procurement stability to recover value and sustain the industrial base.
Without this protection, a PSFIR vendor who wins an initial contract after years of self-funded development will immediately face unrestricted re-competition. This will not only destroy the commercial viability of private defence R&D, but it will broadcast to every watching entrepreneur that the path is not worth taking.
In essence, if IP is a valued asset, then the real creators of the IP are to be valued equally. Be it DRDO/DPSU/other Central Government Research Organisations or the PSFIR vendors. The latter even more, for the risks they take, with no government subsidies, protection, or support. In any case, PSFIR vendors just cannot be compared in any way with the private players creating IP on a minimal risk path along government-funded projects.
(Lieutenant General (Dr) V. K. Saxena, PVSM, AVSM, and VSM, is a retired senior Indian Army officer, who was Director General of Army Air Defence)
NOTE: Follow Defence.Capital on Arattai.
NOTE: Follow Defence.Capital on Telegram.
NOTE: Follow Defence.Capital on WhatsApp.
