High-Tech Manufacturing Startups

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Brainstorming Meeting Recommendations

1.     Market

1.1    The Finance Ministry needs to examine the current unfavourable disposition of tax regime in the context of start-ups in hi-tech manufacturing and evolve a specific policy instrument to encourage hi-tech manufacturing start-ups and at the same time making doing business in India easy.

1.2    A nodal agency be identified which, on behalf of start-ups, could facilitate setting standards and certify product quality by co-ordinating with the various concerned bodies.

1.3    There is a need for a body mandated to promote Indian hi-tech products, especially those made by the start-ups. The body could work closely with the Ministries of Finance and Commerce and Industry to have policy in this regard.


2.     R&D Infrastructure

2.1    The government laboratories and public sector organizations should have a policy allowing their equipment/ facilities to be used by start-ups companies on payment basis.

2.2    Successfully established technology business incubators (TBIs) could set up some prototyping and early production facilities in specific sectors. TBIs need to ensure that conflict of interest is avoided while dealing with multiple start-ups. 

2.3    The Mission Oriented agencies viz. DAE, ISRO and DEITY could factor-in the possibility of a potential start-up for a sub-system in a strategic area and provide for sufficient funding mechanism including seed aestivator funds, in the EMR schemes.

3.     Funding

3.1    The R&D stage of a start-up needs to be supported in its entirety by the government through grants.

3.2    In the product development face of a start-up, the incubators should evaluate the venture in the making before deciding to incubate the venture. The MSME funding scheme for start-up is found to be rigid in terms of the fund ceiling and categories of spending. This requires over-hauling. The Technopreneur Promotion Programme (TePP) needs to be revived by DSIR. NSTEDB and BIRAC need to support private incubators just like the way they support their own incubators.

3.3    The performance of the incubators need to be evaluated by a criteria including return on investment  on funds deployed, number of ventures created, number of ventures successful in raising follow-on funds, etc. Such evaluation criteria could be applied for evaluating future incubators.

4.     Technical Manpower

4.1    For creating a technical manpower pool in product design, the incubator may develop short term courses with the support of design departments in some IITs and the NID.

4.2    The incubators could develop a 1-2 months training course for training technical managers in taking a bench product to early production phase.

5.     Early-Stage Production and Quality

 5.1    The successful incubators may identify appropriate industries to carry out component sourcing, rapid prototyping, production and mould and packaging. They could enter into rate contracts in order to facilitate such services available
to the start-ups.