The government has announced the value of indigenous defence production for Financial Years 2020-2021 and 2021-2022 which is Rs 84,643 crore and Rs 94,846 crore respectively.
Government has disclosed the value of indigenous production in a written reply in Lok Sabha today.
The Ministry of Defence has notified that realise the goal of ‘Make in India’, Government of India has established two Defence Industrial Corridors (DICs) in the country, one in Uttar Pradesh and the other in Tamil Nadu. Besides, government has identified six nodes — Agra, Aligarh, Chitrakoot, Jhansi, Kanpur and Lucknow for developing Uttar Pradesh Defence Industrial Corridor (UPDIC).
In Tamil Nadu, Government has also identified five nodes — Chennai, Coimbatore, Hosur, Salem and Tiruchirappalli for developing Tamil Nadu Defence Industrial Corridor (TNDIC).
The Minister of State for Defence, Ajay Bhatt announced that government intends to develop defence manufacturing ecosystem having conducive conditions including a supply chain for giving push to production and testing & certification to create economies of scale and facilitate development of internationally competitive enterprises in the country.
According to the statement, as per the information received the from Government of Uttar Pradesh for UPDIC, 105 Memoranda of Understanding (MoUs) have been signed with industries worth potential investments of Rs 12,139 crore.
Government has released data on the investment in UPDIC. A total of Rs 2,422 has been invested in UPDIC. UPDIC has also acquired 1,608 hectares of land for development of UPDIC.
Government has also released investment data for TNDIC. So far, it has received proposals worth Rs 11,794 crore from 53 industries which is through MoUs. Ajay Bhatt declared that government has received Rs 3,847 crore as investment in TNDIC. TNDIC has also acquired 910 hectares of land been acquired for development.
Indigenous production (DPSUs)
The seven new DPSUs carved out of erstwhile Ordnance Factory Board have been incorporated as Government companies (wholly owned by the Government of India) under the Companies Act 2013 in October 2021.
According to the statement, Government has taken steps to initially handhold and support these new defence companies in starting their business as corporate entities. In this regard, outstanding indents with erstwhile OFB were grandfathered and converted into deemed contracts valuing about Rs 70,776 crore for the next five years. These deemed contracts provide annual targets for delivery of products.
Every year, 60% of amount pertaining to that year’s target would be paid by the Services to the new DPSUs as advance as per the terms and conditions stipulated in the deemed contract. The advances provide the working capital to the newly constituted DPSUs.
Bhatt also remarked that with more functional and financial autonomy, these new DPSUs are focusing on widening their customer base, including exports to augment the volume of defence production. He said the DPSUs are pursuing export opportunity through interaction with Defence Attaches at various Indian Embassies and Missions abroad.