To promote ‘atmanirbharta’ in the Defence sector, Finance Minister Nirmala Sitharaman on Tuesday said that 68 per cent of the capital procurement will be earmarked for domestic industry.

The capital is up from 58 per cent last fiscal. She said this will reduce dependence on import of defence equipment.

The FM added that Defence research and development will also be opened up to start-ups and academia.

The government has been active in promoting local manufacturing in the Defence sector over the last two years. In October, seven new defence companies were carved out of the Ordnance Factory Board (OFB), as part of a major reform to boost India’s defence production.

Munitions India Limited (MIL), Armoured Vehicles Nigam Limited (AVANI), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL), Yantra India Limited (YIL) and India Optel Limited (IOL) are among the new companies, which commenced business from October 1. 

The Cabinet, on June 16 last year, had approved a long-pending proposal to restructure the over 200-year-old OFB, which operated 41 ammunition and military equipment production facilities, into seven State-owned corporate entities for improved accountability, efficiency and competitiveness. 

In June last year, the Defence Ministry had approved budgetary support of ₹498.8 crore to Innovations for Defence Excellence (iDEX) — Defence Innovation Organisation (DIO) for the next five years.

The scheme is aimed at providing financial support to nearly 300 start-ups or MSMEs or individual innovators and 20 partner incubators under the DIO framework.

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