MSMEs to Invest More in R&D, New Technologies: Defence Minister

By Editor 06-Dec-2021

  • We can create a world-renowned industrial base in India which caters to the domestic as well as global defence needs
  • MSMEs support large entities by manufacturing quality products at component level & at the same time generate employment
  • India will soon become state-of-the-art technology provider not only for the Indian Armed Forces but for the world as well

Defence Minister Rajnath Singh has called upon Micro, Small and Medium Enterprises (MSMEs) to invest more in research & development and manufacture new products & technologies and thereby contribute to the security and progress of the country. He was delivering the inaugural address at the MSME Conclave, organised by Department of Defence Production, Ministry of Defence in partnership with Society of Indian Defence Manufacturers (SIDM) in hybrid mode, in New Delhi.

The minister urged MSMEs and SIDM to create an industrial base in India, on the lines of 'Mittelstand' (Mittel-Stunt) of Germany, which has been recognised by the whole world for manufacturing metal equipment. Rajnath Singh stated that the Government is according top priority to self-reliance in defence, in view of the ever-changing security scenario, adding that there is a need to move forward to unleash the full potential of MSMEs in the sector. He exuded confidence that Indian manufacturers and their associated MSMEs will play a major role in catering to the defence needs of the country and meet the global requirement.

On the important role being played by MSMEs to realise Prime Minister Narendra Modi’s vision of ‘Aatmanirbhar Bharat’, the minister said, major industries play a big role in national security and economic development by manufacturing tanks, submarines, aircraft & helicopters, however, hidden behind these big platforms are small industries. In this era of outsourcing, huge platforms are assembled by thousands of components provided by these hidden MSMEs, he stated. Shri Rajnath Singh added that the MSMEs are not only supporting large entities by manufacturing quality products at sub-systems & component level, but are also generating direct and indirect employment for the people. Saying that large industries & MSMEs complement each other and together can bolster the security & economy of the country, he extended the full support of the Government in achieving this objective.

“Today, there is a sizeable number of MSMEs in our country, which contribute 29 per cent to our GDP through their national and international trade. After the agriculture sector, it is the biggest source of providing employment to about 100 million people. MSMEs also work to involve innovators and mediators in large enterprises. They help to fulfill the objectives of large industrial entities by becoming an important part of the value chain and supply chain,” the minister said.

“We brought policies related to banking and capital market so that our MSMEs can get maximum capital easily and at cheap rates. We came out with the policy of value chain integration and establishment of common facilities, industrial parks and two defence industrial corridors to reduce the fixed cost of MSMEs,” Rajnath Singh said while voicing the Government’s commitment to tap the full potential of MSMEs. He listed out some of the initiatives which aim to promote indigenous design, development and manufacturing of defence and aerospace equipment in the country under 'Make in India' by harnessing the capabilities of public and private sector especially MSMEs. “We have an estimated Rs 85,000 crore industry of aerospace and defence. The contribution of the private sector in this has increased to Rs 18,000 crore. Our vision to make India a global defence manufacturing hub,” he said.

The steps taken to encourage MSMEs include issuance of Request for Proposal (RFP) to MSMEs without any financial condition in cases of procurement where the estimated cost does not exceed Rs 100 crore/year or the total value is less than Rs 150 crore, whichever is higher; earmarking of projects under Make categories, procurement of which does not exceed Rs 100 crore/year based on the delivery schedule at the time of Acceptance of Necessity (AoN) demand and revised Offset Policy 2020 where the Indian offset partner is an MSME.

Reiterating the Government’s focus on encouraging exports, Rajnath Singh hoped that India will soon become a net exporter from a net importer. “The government aims to achieve the export target of Rs 35,000 crore by 2024-25. Presently, India is exporting defence equipment to around 70 countries. According to Stockholm International Peace Research Institute 2020 report, India is in the list of top 25 countries in defence exports,” he said.

Shedding light on other steps like Srijan Portal, notification of positive indigenisation lists of 209 items and 'Strategic Partnership Model', the minister reiterated the Government’s resolve of 'Make in India and Make for the World'. He stated that all these measures have resulted in an increase in the number of contracts being awarded to the indigenous defence industry. “From prioritising procurement of Indian/IDMM (Indigenously Designed, Developed and Manufactured) categories to supporting R&D, we are striving to harness technology through active collaboration with the industry, academia and technology providers, equipment manufacturers, quality controllers and users,” he said.

SIDM President Jayant Patil, Senior officials of Ministry of Defence & SIDM and Industry representatives were present during the Conclave.