“MSMEs have a Strong Foot Hold in Defence Manufacturing Supply Chain”, says Shri Sanjay Jaju, IAS, Additional Secretary (Defence Production), Government of India

No. PR- 160

December 15, 2020

New Delhi

“MSMEs have a Strong Foot Hold in Defence Manufacturing Supply Chain”, says Shri Sanjay Jaju, IAS, Additional Secretary (Defence Production), Government of India

“MSME are the rising stars of the manufacturing eco-system and they have a strong foot hold in Defence Manufacturing Supply Chain” said Shri Sanjay Jaju, IAS, Additional Secretary (Defence Production), Government of India in PHD Chamber of Commerce and Industry and M-TIPB’s Webinar on “Opportunities for MSMEs in Defence & Aerospace Manufacturing”.

Mr. Jaju shared that out of the total defence production of Rs. 35000 cr. through outsourcing, 25,000 cr comes from MSMEs. Talking about the steps undertaken in the defence sector, Shri Sanjay Jaju discussed about the Aatmanirbhar financial package; Government coming out with the negative list of items to leverage domestic manufacturing; increased foreign investment and reformulation the Defence Acquisition Procedure. He also mentioned that there is a need to create a strong supply chain eco-system. He also mentioned about the Defence Production and Export Promotion Policy which the Government will soon be announcing which will ensure larger participation of MSMEs in defence manufacturing. There are greater opportunities in defence corridors, innovation centers and incubation centers for strengthening the MSMEs in the defence manufacturing eco-system.

We need to get into the defence design with the perspective of dual use technology and material in defence, said Shri Jaju.

Thiru Mangat Ram Sharma, IAS, Principal Secretary-MSME Department, Government of Tamil Nadu deliberated about the importance of Tamil Nadu for the MSMEs and in setting up of big industries. He mentioned the introduction of Single Clear Window created for approvals in the MSME Department for lessening the gap between big and small industries in Tamil Nadu that will help in facilitation, trade promotion, and handholding of MSMEs.

Thiru Mangat Ram Sharma appreciated the establishment of the Tamil Nadu Defence Industrial Corridor that has encouraged international collaborations in Coimbatore, paving way for supporting state and international promotional activities to MSME and assured availability of land for MSME establishments. He encouraged people from North India to invest in setting up their production in the South and believes that they are very efficient in handling varied natural calamities and any hindrances.

Thiru Vishu Mahajan, IAS, Managing Director, M-TIPB, Government of Tamil Nadu in his presentation, discussed the presence of the MSME sector in Tamil Nadu which accounts for 155 of the MSMEs in India. He also discussed the mission and initiatives undertaken by M-TIPB for the promotion of foreign collaborations, investment and internationalizing MSMEs from Tamil Nadu. He talked about the defence and aerospace events organized to support the participation of MSMEs in the national and international exhibitions and buyer-seller meets and various incentives for MSME in terms of capital subsidy; power subsidy; generator subsidy; backend interest subsidy; energy audit and conservation; skill training; purchase preference and quality certification. He also deliberated about the opportunities in the defence industrial corridor in Chennai and Coimbatore.

Dr. S K Jha, CMD, MIDHANI discussed the role of DPSU’s and lauded the initiatives of the Government of India for paying timely dues to DPSU’s during the current pandemic situation. Talking about Tamil Nadu Defence Industrial Corridor, Mr. Jha suggested the need to focus on technological advancements by creating clusters for the ease of MSMEs and to introduce Technological Support along with Monetary Support to MSME for Defence manufacturing.

Dr. Mayank Dwivedi, Scientist ‘G’ and Director, DIITM, DRDO discussed the contributions of MSMEs in being a part of the Global Supply Chain and enlightened about various policies, mechanisms, and schemes available by the Govt of India in Defence manufacturing for the MSMEs. He also discussed the growth of India’s ranking in the Global Indexes in ease of doing business. He suggested that Research and Development Culture should be promoted that will help in the ecosystem of the country. He also suggested that improvisation needs to be on upgraded quality checks, design control and protection should be key areas along with systematic documentation. MSMEs need to collaborate to learn and work cohesively.

Mr. Krishna, GM (Marketing), Hindustan Aeronautics Ltd in his presentation on Opportunities for MSMEs in Defence & Aerospace manufacturing discussed mission and projects undertaken by Hindustan Aeronautics Ltd in the defence industry.

Cmde (Retd.) Mukesh Bhargava, VP & Board Member, L&T Defence discussed projects undertaken by L&T. He mentioned that there is a need to focus on indigenization and primarily for the MSMEs at the same time strengthen the supply chain for making India self-reliant and making it competitive for the global markets. There is a need to increase the capital budget to meet industry demands, he added.

Mr. M K Gupta, Chair, PHD Chamber of Commerce and Industry’s Defence & HLS Committee deliberated about the importance of the aerospace and defence industry for the development of the nation. He mentioned that SMEs need to integrate themselves into the supply chains of national and international defence majors to reduce dependence on foreign supplies and also to gain a foothold in the international aerospace and defence market. India’s offset policy will also go a long way in ensuring this objective in the long run.

He suggested that Global OEMs be encouraged/incentivized to procure their material requirements from the indigenous manufacturers from India. There should be discouraged/ disincentivize and ban the use of Chinese materials used in defence manufacturing. To develop the Indian defence industry, the domestic manufacturers should be encouraged rather than the defence traders. In the interest of the defence ecosystem in India, more and more ToTs, FDI, and MoUs between the Global OEMs and the Indian companies need to encourage and confirmed.

Mr. Gupta discussed that Foreign vendors need to be encouraged to form JVs with Indian counterparts to establish manufacturing facilities in India and there may be a regular interface between the foreign OEMs and the Indian defence manufacturers on the MoD platform for discussing the opportunities and the issues in Offsets. The Indian defence industry, especially the MSMEs should be pursued to participate in the DTIS (Defence Testing Infrastructure Scheme) of the Government. The approval process for the Offsets obligation projects is slow and needs to be expedited at the MoD end to speed up the process of discharging the offset obligations timely.

The strength of MSMEs lies in the spare parts and components and, they should be encouraged in the offset obligations, mentioned Mr. M K Gupta.

Mr. Vikram Sahgal, Co-Chair, PHD Chamber of Commerce and Industry’s Defence & HLS Committee shared industry perspective, its challenges, and way forward. He also discussed the importance of MSMEs for the development of the nation and various reforms in the defence sector for encouraging the MSMEs to be a part of the global supply chain.

Mr. Rudra Shriram, Co-Chair, PHD Chamber of Commerce and Industry’s Defence & HLS Committee delivered a formal vote of thanks to all the delegates and participants.

The session was moderated by Mr. Vivek Seigell, Principal Director, PHD Chamber of Commerce and Industry, and was attended by more than 150 industry stalwarts including MSMEs pan-India.


Media Division

PHD Chamber of Commerce and Industry