Govt Bets More on MSMEs for Defence Production; Number of MSMEs Increases to 21%

Number of MSMEs in the domestic defence production sector till the second quarter of the financial year 2020 increased 21 per cent from the entire FY19, according to the data shared by the MSME Minister Nitin Gadkari in Rajya Sabha recently. The total number of MSME vendors of Defence Public Sector Enterprises/Ordnance Factory Board stood at 15,089 in FY17, which declined to 7,591 MSME vendors during FY18 followed by a marginal increase to 8,643 vendors during FY19. However, it increased further to 10,506 till Q2 FY20. The increase in MSMEs share in India’s defence manufacturing space gains significance amid the government’s focus on leveraging small businesses and startups in the defence sector.

Subhash Chandra, Secretary, Department of Defence Production (DDP), Ministry of Defence speaking at a FICCI event last year stressed for the integration of MSMEs and startups into the defence manufacturing ecosystem. “Industry concerns have also been taken into consideration and demystifying of work processes will come only through interactions. The three-armed forces also need to open their doors for discussions with the industry,” he said. Last month, the government had announced a challenge for startups seeking their solutions to help counter-terrorism unit National Security Guard (NSG). The number of startups, till December 4, 2019, in the aeronautics, aerospace, and defence sector stood at 194 registered with Startup India, Defence MoS Shripad Naik had informed in Lok Sabha.

Moreover, In November last year, Defence Minister Rajnath Singh, in order to help India achieve its goal of indigenization and self-reliance in the defence sector with the contribution of startups and MSMEs, had announced the third phase of Defence India Startup Challenge (DISC) under its Innovations for Defence Excellence (iDEX) — programme to boost innovation in the defence sector. “Looking at the talent India possesses, I am pretty confident that we can become $10-trillion economy in the next 10-15 years,” Rajnath Singh had said at an event. Through iDEX and startup challenge, the government is looking to invest in 250 startups and “achieve 50 tangible innovations in the next five years” Chandra had said.

Source: FE

Image Courtesy: SME Venture