NEW DELHI: With defence startups often unable to move beyond the trial stage, the Indian Army has proposed a Rs 250 crore annual Field Exploitation and Capability Acceleration (FECA) fund per Service Headquarters, which is under consideration with the defence ministry.
The proposal, first outlined in February by Army Design Bureau Additional Director General Maj Gen CS Mann, has now been fleshed out. It aims to create a structured system to test and evaluate new technologies in real conditions, backed by small initial orders to assess performance.
“The idea is to plug gaps by allowing improvements to systems over time, adapting civilian technologies for military use and covering costs during trials and field use, including damage and other expenses that startups currently have to bear on their own,” an Army official told The New Indian Express.
The challenge faced by start-ups is most evident in No Cost No Commitment (NCNC) demonstrations, where startups pitch their systems with operational potential. The Army has procured equipment worth around Rs 5,000 crore through this route, with several of these systems proving useful in field exploitation and emergency procurement cases.
“There have been many cases where graduates from top institutions invest all their savings to build systems, only to see them fail in high-altitude conditions where performance varies. Equipment gets damaged, sometimes destroyed, effectively ending a startup’s journey despite its potential,” explained the official. “Existing mechanisms do not account for these realities, and even a single failed trial can set a startup back significantly.”
The proposed framework seeks to break this logjam. Startups and MSMEs will be given a three to four month window to demonstrate their systems against defined operational requirements. “If a system performs well, it can be taken up for limited field exploitation orders, with the possibility of scaling up to bulk procurement once it proves itself in service,” the official explained.
A key element of the proposal is risk support, which addresses a major gap in the current system. At present, startups bear the full cost of equipment damaged or expended during trials, including transportation to forward and high-altitude areas, repairs and modifications.
Despite existing initiatives such as iDEX and the Make procedure under DAP 2020, converting prototypes into actual procurement remains a persistent issue, with FECA envisaged as a more structured mechanism to bridge this gap.
The draft Defence Acquisition Procedure (DAP) 2026 introduces a Low Cost Capital Acquisition (LCCA) category, capped at Rs 75 crore per project for faster procurement of relatively low-value and emerging technology systems, which is separate from the proposed FECA mechanism.
The FECA is now under examination in the defence ministry for possible inclusion in the updated final DAP 2026.