MSMEs have been integrated into defence production supply chain: Nirmala Sitharaman

The Union Government has given a big boost to micro, small, and medium enterprises (MSMEs) in the country by not only bringing them into the defence manufacturing supply chain but also enabling them to tap export opportunities over the past several years, said Nirmala Sitharaman, Minister of Finance and Corporate Affairs.

She fielded a range of questions during an interaction with AM Jain College students here on Friday. She discussed topics such as the economy, defence, MSMEs, employment and women empowerment.

Local manufacturing

While discussing defence production and exports, she said a lot of emphasis was being given to local manufacturing to meet the armed forces requirement and MSMEs were being engaged as part of the self-reliance programme. MSMEs are empowered to meet the quality requirements of defence through certifications.

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“Due to several policy reforms for the integration of MSMEs and start-ups into the supply chain, there has been almost a 200 per cent increase in the number of defence licences issued to the industries in the last 7-8 years by the government,” according to official information.

Now, defence production units sign long-term contracts (for 10 years) with MSMEs for procurements. “Such long-term contracts were not signed in the past,” she pointed out.

Biz opportunities

Defence exports from India are on the rise and there are greater opportunities for MSMEs in this space. After raising the bar in meeting the Indian Defence’s quality standards, MSMEs and start-ups are also supported to export their products. Prospective MSME exporters get their products certified by the government and the certificate can be used by the companies for marketing their products suitably in the global market.

In this fiscal, defence exports have already crossed ₹20,000 crore. “The total exports are expected to reach about ₹24,000 crore by the end of this fiscal (₹16,000 crore in FY23),” she added.

On fuel prices

Answering about fuel prices and procurement of oil from Russia, Sitharaman said the global oil prices were coming down and India was continuing its oil purchase from Russia.

She also sought to allay the concerns over the possible job losses with the advent of artificial intelligence. Every segment will witness a different set of AI tools. So, there will be a demand for people who develop skills to deliver with AI tools. “Such job loss concerns were raised when computerisation programme in the Indian banking sector was taken up during the eighties,” she added.

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