Unfazed by the disruptions caused by the Covid-19 pandemic, Micro, small and medium enterprises (MSMEs) in the country

have lined up in a big way to support the indigenisation programme of the Indian Defence forces.

Of the total 81 MoUs (memorandum of understandings) signed by both the Tamil Nadu and Uttar Pradesh governments for their Defence Industrial Corridors, 30 agreements have been signed up with MSMEs.

“Micro, Small & Medium Enterprises are an integral part for the successful implementation of both the corridors attracting investments in Aerospace and Defence sector. In both the defence corridors, investments have been attracted from MSMEs and start-ups, besides anchor industries and foreign players,” Ajay Bhatt, Union Minister of State for Defence told Lok Sabha recently.

Tech development fund

There is a well-intended preference for MSMEs to be part of the ‘Make in India’ programme of Indian defence.

The Central government has also simplified The ‘Make’ Procedure of capital procurement. There are specific reservations for MSMEs under the ‘Make’ procedure. The government has also set up a Technology Development Fund (TDF) to encourage the participation of private players, especially MSMEs, through the provision of grants, to create an eco-system for enhancing cutting-edge technology capability for defence applications. Also, there are many such reservations for MSMEs to supply to the Defence.

TN units upbeat

Since the latest Budget announcements will also result in further opportunities, MSMEs in Tamil Nadu have been gearing up to participate in the ‘Make in India’ programme of Defence forces.

V Ramesh Babu, President, CODISSIA (Coimbatore District Small Industries Association), says that MSMEs in the Coimbatore region are at the forefront of supporting local manufacturing of defence equipment.

A non-profit organisation, CODISSIA Defence Innovation and Atal Incubation Centre (CDIIC), established under the Companies Act, 2013 by its founding association CODISSIA, has been acting as a catalyst and to bridge the gap between the Defence forces and the skilled vendors of the Coimbatore region through the Defence Innovation Centre (DIC) and providing the required support to the start-ups/entrepreneurs through the Atal Incubation Centre (AIC).

CDIIC has identified 124 products from various defence PSUs that will come up for indigenisation. CDIIC will be getting into an MoU with various DPSUs like BHEL, BEML, HAL, BDL, AVNL and OLF.

Total value of products that will be indigenised at CDIIC-DIH is ₹143 crore in the next 2-3 years. “These MoUs will benefit our Coimbatore MSMEs and regional industries and help them transform into defence vendors,” said Babu.

The Central Government has issued 556 licenses till December 2021 to the companies for the manufacturing of defence items.

Import substitution

Also, 18,023 defence items — which were earlier imported — have been displayed on the SRIJAN portal launched in August 2020 for defence PSUs/services with an industry interface to provide development support to MSMEs/start-ups/industry for import substitution. Nearly 266 vendors have evinced interest to take up the indigenisation of items uploaded on the portal.

Already more than 350 items have been indigenised through the manufacturing of local players supported by MSMEs.

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