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Editor’s Note
Despite facing the challenges of the COVID pandemic, AiKairos Pvt. Ltd has made significant progress in just over three years since its inception. The company has successfully advanced its project of developing an ASW Hydroacoustic Vector Sensor suitable for drone use. The journey for AiKairos has been marked by resilience and dedicated hard work. In a recent discussion, Cdr Milind Kulshreshtha (Retd), Founder and CEO of AiKairos, delves into the projects underway at his company, sheds light on shifts in government agencies’ approaches to startups and MSMEs, and addresses the unique challenges faced by MSMEs, particularly those operating in the deep-tech sector. The conversation took place with Brig SK Chatterji (Retd), Editor of Bharatshakti.
Question: Can you describe your journey to create a Defence MSME, and how do you think the Government policies have aided your endeavour?
Answer: Like many other startups, we established our company in November 2020 and felt the brunt of the COVID-19 onslaught years. Our Defence MSME’s journey is closely related to our own personal expertise in Naval R&D. This started with project work on MPMSDF (Multi-Platform Sensor Data Fusion) launched by the TDF (Technology Development Fund) of DST. Post-COVID, we further got multiple opportunities and kept winning the Innovation Challenges. Much of the credit for the continuation of true deep tech organisations, like ours, goes to the Government of India’s initiative to create flexibility within the stringent Defence Procurement Procedures (DPP). The defence solutions space, too, has been opened up for easy participation by MSMEs and Startups. Since its inception in 2002, DPP has adapted to changing times and kept itself relevant.The Government has gone ahead to create Innovations for Defence Excellence (iDEX) as the operational framework of the Defence Innovation Organization (DIO), MOD/Department of Defence Production’s special purpose vehicle. iDEX has budgetary support of about Rs 500 crore for five years from 2021-22 to 2025-26 and has been highly participative in the indigenisation initiative.
Question: Can you give an overview of the iDEX and other Defence related projects your MSME is involved with?
Answer: We won the iDEX7 SPRINT challenge on “Development of ASW Hydroacoustic Vector Sensor which can be used by drones” for the Indian Navy. The project involves hardware and software development, and we extensively use AI-based solutions.
With support from iDEX and the Indian Navy, we have been able to get closer to the final stages technically, making us one of the few companies in the world with this niche technology. This technology developed is a dual-use technology. Shipping noise as underwater radiated noise is a major pollutant issue. Shipping has led to a 32-fold increase in low-frequency noise along major shipping routes in the past 50 years. We have developed a commercial product called Sea-polyps to measure and analyse such underwater noises. We are also creating a low-cost anti-drone system, which we plan to field in the market by January 2024.
Earlier, we won the 2nd Edition of Indian Army Start-up Search on Algorithmic Warfare. We were also associated with the Directorate General Information Services (DGIS) for integrating multiple sources like satellites, UAVs, EW, ground sensors and radars in the area of operations. It includes sensor data in various modes like text, images, video, audio, EW and radar information.
Question: How do you see the direct connection of the MSMEs with the Military being facilitated today? Further, how do you describe these changes viz.-a-viz., in the past?
Answer: Today, multiple forums are available for interacting with the military in India to discuss opportunities with the end-users. Organisations like SIDM, TDF, iDEX, Army Design Bureau (ADB), CII, etc., keep programmes for MSMEs and Startups throughout the year. For example, iDEX is very interactive and supportive of startup initiatives and maintains a balance between administrative procedures and nurturing innovation. While this is an essential part of the effort, Services have also created an amenable and conducive environment for MSMEs and Startups. For example, the Navy has set up the Naval Technology Acceleration Council (NTAC), the apex body of the Naval Innovation and Indigenisation Organisation (NIIO).
A Technology Development Acceleration Cell (TDAC) has been created under NIIO to support the innovation process closely. Similarly, as far as our interactions were focussed, ADB officers are always keen to take forward the projects formally and informally. The number of events and list of innovations sought by the Army, Navy, and IAF were never seen before, as well as the outreach at all India levels, with academia too involved in this effort.
All this is a huge change from yesteryear’s approach to Tender enquiry-based interactions in a highly rigid environment. The credit for this goes to MoD and the focus towards indigenisation brought in by the three services.
Question: From Rs 900 crore around seven years ago, defence exports jumped to an all-time high of approximately Rs 16,000 crore in the Financial Year 2022-23. The government aims to achieve the Defence export target of Rs 40,000 crore by 2026. How do you see the Indian MSMEs contributing to this goal in the defence export sector?
Answer: As an indicator of the market size, statistics indicate that India is producing and delivering less than 50 per cent of the requirement for its military capability. Further, most suppliers are at the low end of the technology spectrum. Interestingly, many MSMEs already supply components and sub-assemblies or system-level solutions to the Defence Public Sector Undertakings, DRDO, Naval Dockyards, Ordnance Factories and private Defence industries.
In the past five years, Indian defence-related exports have spread to about 80 countries. The items primarily include Weapon Simulators, Tear Gas Launchers, Torpedo Loading Mechanisms, Alarm Monitoring & Control, Night Vision Optical Gadgets, Light Weight Torpedo and Fire Control Systems, Armoured Protection Vehicles, Weapons Locating Radar, and Coastal Surveillance.
As an organisation, MoD is supportive towards this initiative. The iDEX innovation has created a buzz, and many high-level delegations are approaching MoD to familiarise themselves more with these technologies. We have been given an opportunity to showcase our products/solutions and have meetings with foreign delegations. Such encouragement to MSMEs will surely boost defence export activities.
Question: What are the technological challenges a deep-tech MSME usually faces while evolving Defence related deep-tech solutions?
Answer: Defence-related deep tech solutions are complex and require years of R&D and professional expertise. It makes it difficult for many companies to achieve a complete solution as an outcome in one go. In case these technologies use AI/Machine Learning (which is the case most of the time, nowadays), the data-set collection is another challenge. Our interactions with some academic institutions show universities still have a student project-level perspective. In contrast, the defence deep tech innovation is far more complicated, especially regarding field trials.
Among other challenges are financing and funding from the banking sector and financial institutions. Most institutions are oriented around the confirmed ‘Supply Order’ concept. Meanwhile, in an innovation, a supply order placement process kicks in only after successful trials by the services.
Question: What are the benefits, pitfalls and risks which a young entrepreneur may face while setting up a Defence start up?
Answer: Defence startups in deep tech are some of the riskiest endeavours worldwide. Any university student wanting to set up a defence startup must first unambiguously study the requirements of the Services, i.e., the startup must keep a more extended Requirements Gathering phase for the project. The innovation must be designed from the point of view of the field trials rather than expecting to later improve upon the simulation prototype, which is extremely difficult and resource-consuming effort.
Further, the defence qualitative performance is a well-established procedure, and startups must understand these activities to avoid a loop of extended trial duration. Startups must also remember that defence personnel know the exact use cases they require and have tremendous exposure to high-end imported systems. Hence, indigenous suppliers must come prepared with a mindset to carry out up to 30% improvements or amendments in their designs. Startup leaders need resilience and genuine passion to make a true Defence Deep-Tech Startup viable in India.
Brig SK Chatterji (Retd)
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