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India unveils prototype funding initiative

The Indian government has agreed to provide greater financial assistance for local firms investing in the development of military systems and platforms.

The Ministry of Defence (MoD) said in a statement on 17 February that the government will fund up to 70% of the prototype design and development costs of projects that progress under the MoD’s ‘Make-I’ category of procurement.

In addition, it said, senior military officers – including the vice chiefs of three Indian armed forces and coast guard – have now been allocated powers to sanction government funding of up to INR500 million (USD6.8 million) for individual prototype development initiatives.

The MoD added, “Financial powers have also been enhanced for other competent financial authorities under ‘Make-I’ in line with the government’s vision” to stimulate self-reliance and indigenous defence manufacturing.

The move to permit up to 70% of funding for prototypes developed under the Make-I category was first proposed in the MoD’s Defence Acquisition Procedure (DAP) 2020. It added that the maximum amount of funding available for individual prototype projects was INR2.5 billion, released in a “phased manner”.

According to the MoD website, only three projects are progressing under the Make-I categorisation, which was introduced in 2016 to spur local design, development, and production programmes.

The three programmes cited by the MoD, none of which have progressed to contract development stage, comprise a “terminal end secrecy device”, with a value of INR104 million; a tactical communication system (INR36.65 billion); and the long-delayed programme to develop a Future Infantry Combat Vehicle (INR261 billion).

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