India’s defence innovation schemes ask everyone to commit except the buyer
| AUTHOR | Arindam Goswami |
| DATE | November 2, 2026 |
| CATEGORIES | High Tech Geopolitics Research and Development Deep Tech Defence |
The period approved for the ADITI scheme (India’s flagship grant scheme for deep tech defence start-ups) ended on 31st March 2026. Seven months on and there is still no evaluation, no award count and no decision on continuation, despite the DAC having approved another Rs. 2.12 lakh crore of purchase proposals in October. A quick glance at ADITI, DRDO’s Technology Development Fund and the Navy’s SPRINT programme all reveal the same gap. They all ask the start-ups and the SMEs to take the risk. But the armed forces (who are the ones that will ultimately decide whether to buy) do not have to commit anything at the outset. The equivalent US programmes all require that upfront commitment.
ADITI: more challenges than money
ADITI was set up with Rs. 750 cr to develop around 30 critical technologies and has been offering grants of up to Rs. 25 cr to cover half of a firm’s R&D budget. It has now launched 62 challenges across 4 editions. Of the Rs. 705 cr of grant money set aside, 28 winners will be paid Rs. 25 cr each. If every challenge had one winner the average grant would have to be no more than about Rs. 11 cr; if two winners per challenge then it would be about Rs. 6 cr. So either very few of the challenges will be awarded or the vast majority of the winners will get a lot less than the Rs. 25 cr advertised. Only two awards are public and both are to the Navy: QuBeats for quantum navigation and Tonbo Imaging for a high power microwave system.
ADITI also puts the co-funding burden on the firm. The US Air Force equivalent in STRATFI and TACFI works the other way. A firm that has completed its prototype is only entitled to a scale-up grant if a government user puts in matching funds. Over the last four years the ratio has been 1 government dollar for every $1.17 from government users and $1.40 from private investors. In ADITI the user’s contribution is zero.
The Technology Development Fund: slow money, no buyer
The only scheme for which the government has published the status of every project is the DRDO Technology Development Fund. In March 2023 two of the 68 projects were complete and two-thirds were still in the design or early model stage. DRDO had released around a quarter of the money it had committed and between Jan 2023 and June 2024 it disbursed Rs 43.89 crore of the Rs. 120 crore that was allocated. The number of sanctioned projects has remained at 80 since December 2024 and another Rs. 500 crore has been added for deep technology in 2025. Around 20% of the projects are for the replacement of imported aircraft components so the buyer is known from the outset. There is not a single project that has resulted in an order. The slow progress is evenly distributed across the various fields which again speaks more to the way the scheme is run than to the actual technical difficulty of the work.
SPRINT: the Navy commits more
The SPRINT programme is a case study in what happens when a service owns its pipeline. The Navy is now setting 35% of all iDEX challenges and has reported over Rs. 2700 crore in approvals to purchase (that’s around four times the amount per challenge as the other sponsors). A year after launch though, only one SPRINT product had been contracted and 12 approved, with the 75 inductions target being’ hit’ as a result of around 100 technologies having been developed. The US Air Force’s innovation arm AFWERX sets aside 20% of its budget to take proven work to production.
What to change
Each of the changes below addresses one of those findings.
Match ADITI to the user’s money. Only release an ADITI grant when the sponsoring service has put in an equal amount (as co-funding or a conditional first order). A user who has paid half the cost would be more incentivised to buy the result.
Fit ADITI’s challenges to its money. At Rs. 25 crore a winner, the balance of the pot supports around 14 awards a year. Either cap the number of challenges at that level or state the actual award size.
Reserve ADITI for organisations that have already got a working prototype out from under iDEX, SPRINT, the Technology Development Fund or Make-II in the last two years. The US Air Force is the case in point.
Give every project a buyer. Where a TDF project is replacing a part of an existing aircraft or ship, the user or manufacturer should sign a conditional purchase prior to work commencing (using the five year assured orders that the revenue procurement manual already allows for).
Release new money only as old money is being used. The Rs. 500cr deep tech corpus should be released in tranches, each one conditional on the scheme having disbursed the bulk of the previous year’s allocation and publishing the stage of every project each quarter as it did in 2023.
Count SPRINT’s orders signed.
Let the Navy have a single Innovation Authority which will have both the innovation funds and the power to buy. A fifth of the innovation budget will be set aside for second and larger orders of products which have gone through the trials.
These changes do not require any new money. They all work by moving the commitment to buy to the point at which it is cheapest to make and where it matters most: the start.