Defence Secretary Rajesh Kumar Singh has highlighted the importance of assured government orders rather than relying on government-backed venture capital funds to promote growth in India’s defence start-up ecosystem.

He stated that timely orders and smooth procurement processes are the key drivers for private investment in defence manufacturing.

Speaking at ANI’s National Security Summit, Singh explained that funding challenges facing defence startups and MSMEs largely depend on their order books. "If we are giving them orders, then they will not have difficulty with funding," he said, underscoring the pivotal role of government contracts in securing financing.

While not dismissing the idea of a sovereign venture capital fund entirely, Singh suggested such a fund might only play a supplementary role. He remarked, "Maybe we can think about it, but for the most part, the combination of orders, quick contract signings, and procurement is more than enough to attract capital into this sector."

Singh reiterated the government’s ambitious targets of ₹3 lakh crore in defence manufacturing and ₹50,000 crore in exports. He added that India already has a "fairly robust venture capital ecosystem," with multiple funds showing increasing interest in defence start-ups.

Asked about the need for a strategic venture fund akin to the US's CIA-backed In-Q-Tel, Singh opined that it is not particularly necessary for the government to establish such a fund. He noted that abundant funding is accessible for start-ups demonstrating promising technologies and working prototypes.

The Defence Secretary stressed that the government’s priority should be efficient utilisation of the defence budget combined with accelerating domestic contract awards. He said, "The way the government can support defence is through ensuring that we spend the budget that we have, which we've started doing now, and do as many contracts within the country as we can."

Singh’s co-panellists included Air Marshal Ashutosh Dixit, Chief of Integrated Defence Staff; D.K. Sunil, Chairman & Managing Director of HAL; and Arun Ramchandani, Senior VP & Head of L&T Precision Engineering & Systems, who also contributed to discussions on strengthening indigenous defence manufacturing.

Based On ANI Report