MSMEs to be key beneficiaries in govt’s defence procurement under PM Modi’s Atmanirbhar vision

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Updated: Jul 02, 2020 8:32 PM

Trade, imports and exports for MSMEs: The total number of MSME vendors of Defence Public Sector Enterprises/Ordnance Factory Board was 15,089 in FY17. This declined to 7,591 in FY18 but increased marginally to 8,643 in FY19 and then to 10,506 vendors in Q2 FY20.

Indian Defence Sector, armed forces, Minister of Defence, COVID 19, Ordnance Factory Board, FDI limits, Indian defence production, FDI in defenceThe approvals come amid the government’s call for economic self-reliance along with promoting local products under PM Modi’s ‘vocal for local’ campaign.

Trade, imports and exports for MSMEs: MSMEs will be prime-tier vendors in the procurement of defence equipment by the government from the industry for Rs 31,130 crore approved by Defence Acquisition Council (DAC) on Thursday. “The equipment are going to be manufactured in India involving Indian defence industry with the participation of several MSMEs as prime-tier vendors,” the Defence Ministry said on Thursday. DAC in its meeting headed by Defence Minister Rajnath Singh approved proposals worth around Rs 38,900 crore for “capital acquisition of various platforms and equipment required by the Indian Armed Forced.” The approvals come amid the government’s call for economic self-reliance along with promoting local products under PM Modi’s ‘vocal for local’ campaign.

In May this year, Singh had exhorted MSMEs to make India self-reliant in defence technology and products. “I would like to say that we have to have our indigenous products, ie ‘vocal for local’, but before that in our own life, ‘local’ has to be focal. That is, we have to adopt ‘swadeshi’ products in our life. There is no doubt that MSMEs have a very important role in the goal of indigenous manufacturing, and in the goal of self-reliant India,” he said at an e-event.

Also read: MSMEs key to economic revival; India needs Rs 50-60 lakh cr in FDI to reverse coronavirus blow: Gadkari

Number of MSMEs in the domestic defence production sector till Q2 FY20 2020 had increased 21 per cent from the entire FY19, according to the data shared by the MSME Minister Nitin Gadkari in Rajya Sabha in March this year. The total number of MSME vendors of Defence Public Sector Enterprises/Ordnance Factory Board was 15,089 in FY17. This declined to 7,591 MSME vendors in FY18 but increased marginally to 8,643 vendors in FY19 and then to 10,506 till Q2 FY20.

The ministry added that a large number of projects (acquiring equipment from industry) have been made possible because of the Transfer of Technology (ToT) by Defence Research and Development Organisation (DRDO) to the industry. These include Pinaka ammunitions, BMP armament upgrades and software-defined radios for the Indian Army, long-range land-attack cruise missile systems and Astra Missiles for the Indian Navy and Indian Air Force (IAF). The cost of these design and development proposals is around Rs 20,400 crore, the ministry added.

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