Defence Tech Startup Tonbo Imaging Claims Govt Has Defaulted On Payments, Cancelled Contracts

PM Modi in his last address to the nation emphasised on the importance of a self-reliant economy and repeatedly urged the country to support locally-made and locally-sourced products in a bid to strengthen the post-pandemic economy.The message was well-received and within minutes the internet was flooded with citizens trying to do their bit by seeking made-in-India alternatives for foreign brands.

However, on ground, things ain’t as simple or easy to implement. Tonbo Imaging, a Bangalore-based company that produces defence technology such as advanced sensors, and software used by defence forces, has claimed that the government is not living up to their “Make-in-India” mantra themselves. Arvind Lakshmikumar, the CEO of the company has released a strongly worded open-letter to the government that claims that the government has defaulted on the payments for defence equipment supplied by the company.

Tonbo Imaging Defence Equipment Startup India
image: Twitter

In the almost Omerta-breaking letter, Lakshmikumar claims that the defence departments in charge of dealing with the company have defaulted on the payments due to the company for equipment delivered by them last year. Besides, nonpayment of dues, the government’s decision to cut back on acquisition of defence equipment from indigenous sources has put the immediate survival of the company at stake. “The situation is not only unsettling, but in key contrast of our geographical neighbours equipping street soldiers and extremists with cutting edge military technology”, the letter says.

The CEO pleads for the government to release all the payments owed to the company. “These payments should have been cleared by March end. These are for products delivered in October. Looks like supporting the local companies is only relegated to PM’s speeches” an employee from the company exclusively told OfficeChai.

The letter goes on to urge the government to put its strong endorsement of Indian makers into practice and support the local industry beginning with its own departments.  He also requests that the cancelled contracts for procurements from his firm be reconsidered. 

Tonbo Imaging was founded by BITS-Pilani alum Lakshmikumar in 2008, and has raised over $29mn across 3 rounds of funding over the last 4 years. It employs over 170 employees located in Bengaluru, Palo Alto, Greece, Poland, and Singapore. Tonbo makes advanced imaging and night-vision systems that are used for military and commercial applications. “In defence, the sights are mounted on tanks, drones, guns and other artillery to allow soldiers to see better at night over long ranges ­ the sophistication they need in modern battlefields. 

It’s not hard to understand Lakshmikumar’s plight.  The company makes admittedly expensive equipments – 90% of which are supplied to the Indian Defence –  and employs highly-specialised engineers spread across four continents. Any delay in payments and an uncertainty in its deliverables can disrupt its cash flows, and cast a shadow of doubt over its imminent future.

To be sure, these are not normal times, and payments and regular rules of business stand disrupted  across the board. Moreover, the govt ministries are notorious for their complex and non-transparent inner workings.  The government’s well-intentioned appeal to  be “vocal for local” may have resonated with millions of people, but it has also prompted those very local industry players to be vocal about their rights, and imploring the powers-that-be to turn the slogans of self-reliance and vocal-for-local into actual practice.