In a bid to encourage the participation of startups in the bidding process for defence contracts, the Ministry of Defence has come out with some special provisions in procurement policy which will allow such companies to submit bids for contracts valued below Rs 150 crore sans the requirement to prove their financial credentials, reports The Economic Times.
As such contracts are relatively small compared to the overall procurement requirements of the defence forces, startups will only be required to prove that they have technical expertise to fulfill the order. Moreover, this exception is specially tailored to encourage startups, and not just any new entrant.
Thus, mid to large sized firms which are making a fresh foray into the defence sector will still have to submit their financials.
The new policy change not only makes it easier for startups to participate in the government’s ambitious ‘Make in India’ programme in the defence sector, but it also creates more competition for these defence contracts, which can allow better products to eventually reach the armed forces.