The INDUS-X summit, with its focus on enhancing cross-border defense innovation ecosystems, marks a pivotal moment in US-India defense collaboration. Set against the backdrop of Stanford and Silicon Valley, this forum will catalyze partnerships between startups, VCs, and defense stakeholders to fortify defenses against 21st-century threats. The initiative, bridging American and Indian defense innovation, aims to address critical questions, foster tech synergy, and drive forward strategic partnerships. With a growing interest in defense tech cooperation, INDUS-X opens doors for advanced technology solutions and joint development projects, signaling a promising era of innovation and collaboration in the defense sector.
Ahead of the highly anticipated India-US defense innovation summit set to take place at Stanford University this week, the US India Strategic Partnership Forum engaged in a forward-looking discussion about the event's potential outcomes and objectives. The summit, a pivotal component of the Initiative on Critical and Emerging Technologies (iCET), aims to drive defense innovation by fostering collaborative efforts among military manufacturers, startups, and venture capital firms.
In the vibrant atmosphere of Silicon Valley, key figures from the US India Strategic Partnership Forum shared insights with ET on the promising prospects of this partnership and offered a glimpse into what attendees can anticipate at the gathering of prominent military manufacturers, startups, and venture capital firms at Stanford University. The primary focus will be on identifying future military challenges, exploring emerging disruptive technologies, and collectively formulating innovative solutions for the armed forces.
Of notable interest are startups specializing in Artificial Intelligence, cybersecurity, and autonomous systems, which are expected to generate significant attention during the summit. Building upon the foundation laid by the top-level Initiative on Critical and Emerging Technology (ICET) agreement between the two nations, this event is poised to propel forward-thinking collaborations and advancements in defense technology.
Question: What is the idea behind the INDUS-X summit and what outcomes are hoped to be achieved?
Mukesh Aghi, President USISPF: This edition of INDUS-X is themed “harnessing investment opportunities to enhance cross-border defense innovation ecosystems". It is an exciting intersection since this is the first time INDUS-X is being hosted at Stanford and Silicon Valley, which will be the link for startups and VCs with the defense industry and policymakers and fortify defenses in the 21st-century era of autonomous weapons and new threats.
INDUS-X is a pillar and a bridge between American and Indian defense innovation. Apart from MOUs between the governments, INDUS-X will raise questions as well as find solutions to pertinent questions - can we build a robust defense ecosystem in India? How can we strengthen the startup ecosystem in India? How can we connect VCs, academia, and startups to policymakers in Washington and New Delhi and bring forth platforms of collaboration?
Question: How much interest is there within the US tech and startup ecosystem in working with India, in the defense and military space?
Aghi: We’ve barely scratched the surface, there is so much more potential for deeper collaboration. As the U.S. and India, strengthen their partnership in the Quad, I2U2, and IMEC, a key component is critical and emerging technologies, collaboration in quantum, AI, cyber, and space. Even India’s manufacturing goals, are driven by becoming a high-tech manufacturing hub and semiconductors and chips are a critical component of that. This will boost sectors such as automobile (EV manufacturing), smartphones, and the hardware industry.
The Defense Technology and Trade Initiative (DTTI), between our two countries aims to foster joint development and production of defense equipment. Long before iCET and INDUS-X, the U.S. and India already had tech synergy, given India’s tech talent and the connection to the Silicon Valley tech economy, in Indian American CEOs, startup founders, and the tech worker that has made California, the world’s largest sub-national economy (over $3 trillion) and the innovation capital of the world.
Q: What are the opportunity areas?
Aghi: India's defense sector offers a significant market for US tech companies and startups. The government has a vision to achieve a defense production target of $25 billion by 2025, including $5 billion in exports. This opens up opportunities for U.S. companies to offer advanced technology solutions and collaborate on defense projects.
Indian startups and tech companies are increasingly involved in defense innovation, supported by initiatives such as the Innovations for Defence Excellence (iDEX) program, which promotes R&D collaboration between Indian and foreign companies. There is also growing interest from venture capital and private equity firms in funding U.S. startups that are engaged in defense technology, particularly those looking to expand into new markets like India.
Therefore, U.S. tech startups see opportunities in providing AI, cybersecurity, drones, and other emerging technologies to the Indian defense sector.
Q: With two big deals almost finalized for jet engines and drones, what more can be expected in the future between India and the US?
Aghi: Defence Minister Rajnath Singh’s recent visit to Washington, D.C. was a resounding success. He met with his counterpart, Secretary Lloyd Austin and NSA Jake Sullivan and both the Indian Ministry of Defence (MoD) and the U.S. Department of Defense (DoD) entered into a Security of Supply Arrangement (SOSA). What SOSA does is strengthen the defense relationship as this prioritizes each side for the delivery of certain defense items. SOSA also works to mitigate supply chain disruptions, and that’s a major focus – supply chain resiliency.
We can expect more technology transfer and co-development between Washington and New Delhi as both countries are increasingly interested in co-developing cutting-edge defense technologies.
Furthermore, the Indian government has been promoting "Make in India" for defense, encouraging foreign companies to set up joint ventures and partnerships with Indian firms. The recent changes in Foreign Direct Investment (FDI) policies have also increased the permissible FDI in the defense sector to 74% via the automatic route, ergo this will attract more interest from U.S. companies.
INDUS-X is an exciting time to see the intersection of the private sector, startups, and governments coalesce to strengthen the defense and tech ecosystem. U.S. startups are exploring partnerships with Indian firms to tap into India's engineering talent and cost-effective manufacturing capabilities. Defense-focused startups are receiving more attention due to the potential for growth in both the U.S. and Indian markets.
Q: Now that the SOSA has been signed, the industry is looking forward to movement on the RDP. How will this benefit Indian and US companies?
Vikram Singh- Senior Advisor, Defense and Aerospace, USISPF: SOSA and RDP are key tools to jumpstart defense trade and innovation and ensure a resilient supply chain for critical goods. Under the SOSA the U.S. and India will endeavor to prioritize delivery of critical defense goods and services. It provides a way for companies to voluntarily sign up to participate. In a crisis, the SOSA can be invoked to request expedited deliveries, but it is a voluntary arrangement, not a binding agreement.
An RDP is a binding MoU, more like a minor treaty. It basically provides a way for goods from the RDP partner to be exempt from domestic content requirements (or count towards such requirements) like US Buy America Act provisions or India’s local content rules under the Defense Procurement Procedure. Every RDP is unique, and they are a lot harder to negotiate, but once in place they help foreign companies to access the U.S. defense market and vice versa providing many more opportunities for strategic partnerships, co-development, and co-production.
Q: How do you rate the current progress for co-development and co-production on the defence front under initiatives like DTTI and ICET. What more can be done?
Singh: We’ve reached a new level since the early efforts at defense tech cooperation kicked off under DTTI. But those efforts provided a foundation. Closer strategic alignment and the creation of dedicated innovation institutions like the Defense Innovation Unit (DIU) in the U.S. and Innovations for Defence Excellence (iDEX) in India meant that the recent efforts like INDUS-X under the Initiative on Critical and Emerging Technology iCET have both top-down support and established mechanisms. So what’s working is that we see more investments, more private sector partnerships, and collaborative R&D. The governments can and should move faster to push approvals, especially when US and Indian companies partner to deliver a capability needed by both governments. Speed is critical to young startups, and it is difficult for governments to move at the speed of innovation.
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