DRDO's Technology Development Fund: what it pays and who can bid

Most government grants ask what you want to build. The Technology Development Fund asks whether you can build something the armed forces already want.

TDF is a Ministry of Defence programme that DRDO executes through its Directorate of Technology Development Fund. It was set up in 2016 under Make in India. It gives grant-in-aid to Indian companies, especially MSMEs and startups, for technology the three Services, Defence Production and DRDO need. Our grants and schemes register lists the other central schemes we track, each with its rules and sources.

01How much of a project does TDF pay for?

The money is grant-in-aid. It is not a loan, and DRDO takes no shares. Every project is jointly funded: DRDO pays its share and your company pays the rest.

How large DRDO's share is depends on the size of the project. TDF's general guidelines, in the version its portal carried in April 2026, set two bands.

Two things about that table catch founders out. The ₹50 crore figure caps the cost of the whole project, across every development phase. The government's 2022 release described the change as raising funding to ₹50 crore per project from ₹10 crore, which is why it gets quoted as a grant size.

The second is the bands themselves. DRDO's special terms, its agreement template and the myScheme listing all say up to 90%, with no lower band. The guidelines add 70% for larger projects. Budget on the band your project falls in, and confirm the split in the project document before you price a bid.

The ceiling is not the average project size either. By August 2024 DRDO had sanctioned 78 TDF projects at a cost of about ₹333.21 crore, according to a written reply in the Lok Sabha. On our arithmetic that is roughly ₹4.3 crore a project.

The money arrives in instalments tied to milestones fixed in the agreement. It covers manpower, equipment the project needs, consumables, an academic partner's share, sub-contracts, domestic travel, overheads and contingency. Overheads are capped at 10% of the approved cost. An academic or research partner can take at most 40% of the project cost, and a project typically runs no longer than four years.

03Who can bid, and who is turned away?

The bidder has to be an Indian vendor in DRDO's sense. That covers a public or private limited company, a one person company, an LLP, a partnership firm or a sole proprietorship registered in India. Resident Indian citizens must own and control it with at least 51%.

• Foreign money is capped. A company with more than 49% foreign investment cannot bid, and any foreign collaboration goes into the DPR.
• MSMEs and startups come first. A large company gets a look only when no suitable MSME or startup makes the shortlist. On projects opened to all industries, every bidder is evaluated at par.
• You prove your category. An MSME shows its Udyam certificate and a startup its DPIIT certificate to compete in that category.
• Research bodies only partner. Academic and non-profit research institutions take part alongside an Indian company that leads the bid.
• You can lead two projects at most. No company can be the lead on more than two TDF projects at the same time.
• A Ministry of Defence ban rules you out. A firm the ministry has debarred, banned, blacklisted or suspended cannot bid.

Startups carry extra conditions. The company must be DPIIT recognised, and it must not already have had a government grant for a similar technology. A startup under three years old counts as nascent and must be incubated at a Central or State government-assisted incubator. Up to 20% of the funding can then go to that incubator for prototype development and trials. What DPIIT recognition gets you covers the certificate itself.

05What a TDF grant costs you after the sanction

Besides your own share, watch the cash timing. Under DRDO's agreement template the first instalment is a reimbursement paid after the first milestone, so you fund milestone one yourself.

Later instalments come as reimbursements or as advances. An advance needs a bank guarantee of the same amount. In our reading that ties up bank limits a young company may need for working capital, so price it before you choose the advance route.

A TDF project needs its own books of account and its own bank account, and DRDO can inspect the books. Unspent money and interest earned on advances go back to DRDO. Another government grant for the same or a similar technology has to be reported to DRDO within 30 days. You also cannot run the same project with another party in India.

The exits are expensive. If DRDO terminates the agreement, you repay the grant with interest at 10% a year within 30 days. Grounds include breach, insolvency and a failure left unremedied. The guidelines also let DRDO foreclose a project for non-performance, undue overruns of time or cost, or a failed prototype. What a government grant costs you sets obligations like these across the other schemes.

07Is a TDF call open in October 2026?

TDF is active, but it has no scheme-wide window. DRDO posts requirements one at a time on the TDF portal, each with its own opening and closing dates. On 15 October 2026 several were open, and the nearest closing dates were only days away.

So watch the portal's project list and get your papers ready before the right requirement appears. That means entity documents, the Udyam or DPIIT certificate, and a shareholding record that shows the 51% test. A DPR started from nothing inside a short window is rarely a strong one.

In July 2025 the government told the Lok Sabha that the Raksha Mantri had approved an additional ₹500 crore corpus for deep-tech projects as separate verticals under TDF. The first high-value agreement from it was signed on 24 September 2026 with Zero mK India, an Alwar startup, for a dilution refrigerator for quantum applications.

In the first week of December 2025, DRDO handed seven TDF-developed technologies to the Services and its Empowered Committee cleared 12 new projects. DRDO's delegation of financial powers released on 29 June 2026 gives TDF grants their own schedule.

09Frequently asked questions

Do we have to repay a TDF grant?

Not if the project runs to its agreement. It becomes repayable with interest at 10% a year if DRDO terminates the agreement, whether for breach, insolvency or another ground the agreement lists. The same applies if an audit finds the grant became a source of profit.

How much would DRDO pay on a ₹20 crore project?

In general up to 70%, so up to ₹14 crore, with your company funding at least ₹6 crore. The guidelines allow up to 100% case by case. The project document and the agreement fix the actual split, milestone by milestone.

Can we propose our own technology instead of a listed one?

Not through the standard route, which runs on listed requirements. TDF's guidelines do name Dare to Dream winners and other national innovation contests among the sources DRDO draws projects from. A contest win is one way your own idea can reach the list.

Can a company with foreign investors apply?

Yes, if foreign investment is 49% or less and resident Indian citizens own and control at least 51%. Disclose any foreign collaboration in the DPR. Remember the IP clause as well, because a later foreign takeover without DRDO's consent forfeits your rights in the jointly owned IP.

General guidance, current as at 15 October 2026. TDF's funding bands, ceilings and terms change by DRDO decision, and each project document governs its own call, so check the TDF portal before you bid. If you would like the project document read with you, our capital grants practice is CS Manavi Arora's desk.