SIDBI signs MoU with aerospace body SIATI to benefit MSMEs in aerospace, defence

Ease of doing business for MSMEs: “This would serve as a knowledge depository about defence sector or defence public sector units and large OEMs and would provide an opportunity to MSMEs to showcase its capabilities and products to the interested DPSUs/OEMs etc.," said SIDBI.

Written by MSME Desk

February 21, 2023 20:23 IST

defence, aerospace, msmes in defence, sidbi, indian air force, iaf, indian navy, defence procurement, siati

The aerospace and defence composite market in India is expected to grow at a CAGR of 13.1 per cent from $31.8 million in 2021 to $71.2 million in 2027, according to the data portal Statista.

Ease of doing business for MSMEs: The principal financial institution in the country to promote and finance MSMEs SIDBI on Tuesday signed a memorandum of understanding (MoU) with the Society of Indian Aerospace Technologies and Industries to “facilitate mutual co-operation between the institutions for the overall benefit of MSMEs in aerospace and defence and other sectors.” SIATI is the industry body for enterprises including MSMEs in the aerospace sector.

“This would serve as a knowledge depository about defence sector or defence public sector units and large OEMs and would provide an opportunity to MSMEs to showcase its capabilities and products to the interested DPSUs/OEMs etc.,” SIDBI announced on Twitter.

Also read: Defence ministry top buyer of MSME goods in 2022: GeM

Importantly, the defence ministry was the top procuring ministry of goods and services from MSME sellers in 2022 via the government’s public procurement e-commerce marketplace Government eMarketplace (GeM). The ministry has purchased products and services worth Rs 16,747 crore in 2022 from the portal. In terms of the financial year, the defence ministry had procured Rs 15,047.98 crore worth of goods and services from MSMEs in FY22, up 250 per cent from the previous year.

Moreover, last year, over 125 MSME suppliers were identified by a consortium of Tata companies including Tata Advanced Systems Limited (TASL) and Tata Consultancy Services (TCS) to make 40 C-295 transport aircraft for the Indian Air Force along with the European defence major Airbus.

Also read: Around 500 MSMEs helped in building India’s first indigenous aircraft carrier INS Vikrant: Economic Survey 2022-23

Importantly, the total MSME vendors supplying to the defence PSUs had jumped to 10,506 till Q2 FY20 from 8,643 in FY19, and 7,591 in FY18, according to the data shared by the former MSME Minister Nitin Gadkari in Rajya Sabha in March 2020. By December 2021, the total count had jumped to 12,000. As a result, the procurement value by DPSUs from MSMEs jumped from Rs 4842.92 crore in FY19 to Rs 5463.82 crore in FY21 before leapfrogging in FY22.

Meanwhile, the aerospace and defence composite market in India is expected to grow at a CAGR of 13.1 per cent from $31.8 million in 2021 to $71.2 million in 2027, according to the data portal Statista.