To make India self reliant in the defence sector, the Ordnance Factory Board (OFB) has been split into seven different companies. These seven companies have been dedicated to the nation on the auspicious occasion of Vijayadashmi by Prime Minister Narendra Modi. The new Defence PSUs are 100 per government owned corporate entities and will help in improving the country’s self-reliance in defence preparedness.
Business in the seven new entities started from October 1, 2021. These new companies are: Troop Comforts Limited (TCL); Yantra India Limited (YIL); Gliders India Limited (GIL); India Optel Limited (IOL); Advanced Weapons and Equipment India Limited (AWE India); and Armoured Vehicles Nigam Limited (AVANI).
In his virtual address Prime Minister Narendra Modi said that the decision to create new companies and expressed the belief these 7 new companies would form a strong base for the military capability of the country in the future. While noting the splendid past of Indian ordnance factories, he stated that post-independence period the up-gradation of the companies was ignored and this led to the dependence on the foreign vendors for the country’s military needs.
Paying tributes to Dr APJ Abdul Kalam, Prime Minister Modi said that Dr Kalam had dedicated his life to the cause of a strong nation. “Restructuring of Ordnance Factories and creation of seven companies will give strength to his dream of a strong India,” the PM added.
According to him the new companies are a part of the various resolutions which the country has been pursuing to build a new future for them and these would play an important role in import substitution, in line with the vision of ‘Atmanirbhar Bharat’.
The new companies now have an order book of Rs 65,000 crore. These orders were in the pipeline and have been shifted to the new entities. The PM in his address cited Defence Corridors in Tamil Nadu and Uttar Pradesh as examples of the new approach. In the last five years the defence exports, according to the Prime Minister, have touched 325 percent and due to policy changes new opportunities have emerged for the youth in the MSMEs.
He urged the new companies to not only establish their expertise in the products but to also become global brands and reliability and quality should be the identity.
In the 21st century, since the growth and brand value of any company or nation is based on its R&D and innovation, through his address he appealed to the new companies to take the lead in future technologies. These new companies have complete functional autonomy and the interests of the employees are fully protected.
What did Defence Minister Rajnath Singh say?
According to him, the move to create new companies is a reflection of the government’s commitment to Atmanirbhar Bharat. And stating the objective of the restructuring of the OFB, he said, “It is to transform the Ordnance Factories to improve expertise in product range; profitable and productive assets; ensure self reliance; enhance cost effectiveness and improve quality and increase competitiveness.”
These new companies are expected to play an important role in the defence manufacturing eco-system and would be engines of growth for the Indian economy. While the companies have the potential for full growth, if need be, according to the minister, full support through financial and non-financial interventions will be provided by the government.
He also voiced the government’s resolve of creating India as a defence manufacturing hub and net exporter. This can be achieved through the active participation of the private sector, setting up of defence manufacturing units as well as creating joint ventures.
According to the defence minister Rajnath Singh, “To enhance preparedness of the armed forces, the public and private sectors are working hand-in-hand.”
By 2024, the Ministry of Defence has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defence goods and services, including exports of Rs 35,000 crore.
Who all were present?
The dedication programme was held in a hybrid format. And in New Delhi, MOS Defence Mr Bhat, National Security Advisor Shri Ajit Doval, Chief of Air Staff Air Chief Marshal V R Chaudhari, Secretary (Defence Production) Raj Kumar, Defence Secretary Dr Ajay Kumar, Secretary (Ex-Servicemen Welfare) B Anand, Financial Advisor (Defence Services) Sanjiv Mittal and representatives from the Defence Industry Associations as well as senior officers from the Ministry of Defence were present.
Reaction from Society of Indian Defence Manufacturers (SIDM)
The members of SIDM welcomed the creation of seven new companies and expressed that the industry is looking forward to doing business with them. These new companies will adopt corporate standards for their commercial activities. This includes tendering, contracting to payment systems etc, and vendor development .
According to Jayant Patil, President, SIDM said “As envisioned by the Prime Minister, the industry can leverage mutual strengths to enhance India’s competitiveness with global quality, reliability backed by R&D and innovation to be a force to reckon with in the global stage.”