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Relaxation in defence procurement norms give hope to start-ups, MSEs: B K Goenka

Anil Urs | | Updated on: Feb 27, 2019

Relaxation of norms in public and defence procurement has given hope for start-ups and micro and small enterprises (MSEs), according to BK Goenka, President of Assocham and Chairman of the Welspun Group.

“This relaxation has made many start-ups medium and small enterprises eligible for Rs 2,79,950 crore worth orders being tendered out in various defence projects,” B K Goenka, President Assocham and Chairman of Welspun Group told Business Line.

“Also ‘Make in India’,‘Buy (Indian-IDDM)’, ‘Buy (Indian)’, ‘Buy and Make (Indian)’ or ‘Make’ categories of capital procurement as per Defence Procurement Procedure (DPP) and defence offset clauses has forced many multinational defence corporations and companies to look at domestic start-ups which have proeucts and solutions and MSEs,” he added.

The government through Department for Promotion of Industry and Internal Trade has issued guidelines for encouraging Start-ups and the Department of Defence Production has taken it forward by inviting all defence PSUs, to implement policy of Ministry of MSME.

“What is encouraging is the Ministry has also earmarked the projects under the new “Make” procedure for the MSMEs and start-ups. This will encourage lot of small and Start-ups companies to come up with innovative and new technologies for the defence and security industry,” explained Goenka.

Talking about the status of vendor development, he said “Defence and aerospace sector is expanding globally and India is emerging as one of the big defence markets. Here the defence public sector units (DPSUs)/OFB and the Indian private sector are working in tandem. Chamber like us (Assocham) is showcasing that vendors are capable and cost effective in supply chain. Now vendors are moving to more focused activities and are building long term partnership and strategic alliances.”

On import substitution, Goenka said Assocham perhaps is the only Chamber which supported the Ministry of Commerce for taking up the cause of Indian defence companies to international expositions. “Now we are raising the issue of the Indian companies capabilities and the export potential in the defence sector by highlighting the same to the Department of Defence Production. This has helped many indigenous product and services getting global resignation.”

Skill development is another issue, Goenka said has to be undertaken at various levels to be in sync with the government policies where the DPSUs and OFB have been asked to adopt ITIs and support by upgrading their infrastructure and making their training programmes globally compliant. The DPSUs are also encouraged to spend 20 per cent of the CSR Funds on skill development activities and the Industry is also ready to match their contribution in terms of upgrading the skills and skill development.

Published on February 27, 2019

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