With IndusX, India and US seek to build a defence innovation bridge for the first time

India and the US are likely to announce a joint innovation fund and establish a working group to enhance collocation between the defence startup ecosystems.

Washington With the objective of building a defence innovation bridge between India and the US, on the sidelines of Prime Minister Narendra Modi’s state visit to Washington DC, both sides are likely to announce a joint innovation fund, launch joint challenges, and establish a joint working group to enhance collocation between the defence startup ecosystems of both countries, people familiar with the development said.

Prime Minister Narendra Modi is set to visit the US next week (via REUTERS)

As part of the initiative on critical and emerging technologies (ICET), the framework launched by the national security advisers (NSAs) of both countries, Ajit Doval and Jake Sullivan, the US-India Business Council is set to host Indus-X, a new platform to accelerate this connection between startups, governments, academia and big capital on June 20 and 21. It is here that the bilateral relationship will enter into the previously uncharted path of working on defence innovation together.

Ambassador (retired) Atul Keshap, president of USIBC which also hosted the public launch of ICET in January, said, “Indus-X is a direct outgrowth of ICET. Both India’s ministry of defence (MoD) and the US department of defense (DOD) have asked us to host a gathering of defence startups in both countries, companies in incubator phase. Both countries want to encourage them to partner with each other. Both NSAs are deeply invested in Indus-X.”

Keshap said that the turbulent geostrategic environment made it imperative for both democracies to demonstrate they can work together, and Modi’s visit will be key step in breaking through the plateau in the relationship on the defence and economic front. “ICET is as important as the nuclear deal. This is very serious business. When you think about how both countries are worried about geostrategic currents, looking at and working together with each other on future tech and deep tech is really important.”

During the initial discussions on ICET, Keshap said, defence industry stakeholders had asked for asked for a security of supply chain agreement, a reciprocal defence procurement agreement, an incubator to enhance connectivity between start ups and movement on technology release. “We are seeing movement on all these asks.”

In this backdrop, he said, Indus-X is aimed to accelerate defence start up ties. In a clear reference to China, Keshap said, “It’s important because great democracies need to show deterrence strength. If you have strong deterrence, the other guy will think twice before starting something. Getting start up accelerators going is critical to enhancing deterrence. Just as we did with our major defence companies, we need to do that with smaller, medium sized companies because they will greatly boost defence production between both countries and make the other guy think twice.”

Agenda

Besides the participation of nine US start-ups and 14 Indian start-ups, the event will witness high-level government involvement.

While the US ambassador to India, Eric Garcetti, US undersecretary of defense for acquisition and sustainment William A LaPlante, and the US secretary of the Air Force, Frank Kendall, will deliver keynote addresses, Pentagon’s deputy assistant secretary for South and Southeast Asia Lindsay Ford will participate in a panel on investing in the future of the defence relationship. Vivek Virmani, the chief operating officer of Indian defence ministry’s Innovation for Defence Excellence (Idex) initiative will speak about translating innovations into capabilities and startups bridging the distance from ideation to commercial scalability.

Thea Kendler, assistant secretary in the commerce department for export administration, will speak about navigating export controls, procurement and industrial security while Farooq Mitha, DOD director in the office of the small business programs, will address “friendshoring” US-India defence coproduction.

The event will also feature a day-long exhibition at the US Chamber of Commerce, where firms will showcase technologies and platforms that can benefit both countries in areas of border security, maritime domain awareness, space situational awareness, among others.

Rationale and outcomes

In a paper published this week, Carnegie India’s Rahul Bhatia and Konark Bhandari pointed to the mushrooming of the private defence and space ecosystem in India. “Today, Indian defence start-ups are developing a wide spectrum of cutting-edge technologies for the Indian armed forces to employ. These range from unmanned platforms and body armour to surveillance systems and advanced imaging capabilities.” Carnegie is among the partner organisations at Indus-X.

Since India opened up the space sector in 2020, space start-ups too have established a presence. “Skyroot Aerospace recently launched India’s first private rocket and aims to put a satellite into orbit this year. Digantara, another startup, has built an observatory to track space debris and military satellites over the South Asian region. Some space startups, such as Pixxel and Dhruva Space, have also committed to building satellite manufacturing and assembly facilities—something that would benefit from scale if there were a possibility to build for defense applications as well,” Bhatia and Bhandari note.

It is in this context, Carnegie’s authors point out, that Indus-X offers an opportunity for “matchmaking” between Indian and American startups with “established defence companies, venture capitalists, incubators, accelerators, universities”. It could also establish mentor-protege relationships between startups and larger defence companies, which can help smaller Indian outfits in accessing US government contracts and vice versa. The paper suggests that Indus-X could also fill a vital information gap on how to navigate the US regulatory environment.

Kriti Upadhyaya, founding director of the IndUS Tech Council, another partner organisation at the event, said there remained many regulatory and export control issues that made it difficult for the private sectors of both countries to work together. “However, pathways exist and are slowly being employed especially by Indian startups and US primes and investors. For example, other transaction authorities can allow Indian startups to supply to US DoD. Similarly, technical assistance agreements enable technology transfer and vendor development to and in India while manufacturing licensing agreements help ease ITAR (International Traffic in Arms Regulation) restrictions when manufacturing in India.”

She said that while working through these pathways was crucial, Indus-X provides an opportunity to all stakeholders to get together, brainstorm and learn in building an effective defence innovation bridge. Pointing out that this was in stark contrast to the top-down Russia-India military industry complex, Upadhyaya added, “A private sector-led US-India defence innovation agenda can represent democratised supply chains and democratised innovation paradigms of the future. What I hope we can achieve is a win-win partnership where Indian firms can bring supply chain resiliency, skilled and talented workforce, and cost efficiency for US primes and partners and the US ecosystem can help infuse fresh investments and transfer of technology to India.”

Those involved with the event hope to see the launch of joint challenges focusing on common dual-use cases for both countries, the setting up of a joint working group to encourage interactions between startups and governments, the unveiling of a joint fund and greater partnerships with academic institutions, and more steps on the US side to ease their regulatory and export control regimes to enable the Indian and American defence ecosystem to work more closely together.